Order Management includes the procedures of order intake, order monitoring, and order fulfillment for clients. When an order is placed, the order management process starts, and it finishes when the consumer receives their package. In this article, We will understand the workings of order management, the stages of order management, and more.
What is Order Management?
Order Management pertains to the procedures that commence as soon as a customer puts an order and often conclude when the consumer receives their things, barring any issues that necessitate launching a customer care request. In order for order management to be effective, orders must be filled without going beyond the company’s capacity. This can occasionally be done manually for a very small business with little inventory, using spreadsheets or even old-fashioned pen-and-paper methods.
How Does Order Management Work?
- Order placement and payment are the first steps in the order management procedure.
- Workers in the warehouse manage the picking, packing, and also the delivery of the order after receiving the order details from the store’s inventory.
- As a consequence of the transaction, the consumer is asked to confirm that they were satisfied with their purchase by the store. These are typical process steps.
- The majority of order management procedures can be divided into three phases: taking orders from customers, processing those orders, and managing the post-purchase procedures.
Stages of Order Management
There are three stages of order management
- Receiving the customer’s order: When a customer puts an order with your company, the order management procedure starts.
- Fulfilling the customer’s order: You actually complete your customer’s order in the second step. Order fulfillment begins with the picking procedure, which involves taking the items out of the warehouse. The next step is to mail the correct order once you’ve chosen and packed it.
- Handling the post-sales processes: Taking care of the after-sales procedures is the final step in order management. This is the process by which companies get in touch with their clients again to ask about their purchases, get feedback, and handle returns and refunds if necessary.
Purposes of Order Management
- Practically every system and procedure in the supply chain is impacted by order management.
- Order management is no longer a part of the operations of the majority of businesses
- It is simple to lose sight of and control over an order when there are numerous partners involved, such as distributors, assembly and packaging services, suppliers of parts and components, and so on. This necessitates expensive manual procedures in order to finish and deliver the order accurately.
- If a customer places an online order but has any questions, they can contact a call center to finish the order.
- The consumer anticipates receiving email and other information as the order is being processed. They might want to return it via a real channel, like a store, if there is an issue.
Features of Order Management
Below are some features of order management
- Intelligence: Align order management procedures with the performance objectives and business policies of a company.
- Real-time inventory: Check what’s in stock, what’s in transit, and how much demand there was at any one time. This eradicates the need to conduct an extra safety stock on hand to expedite shipments.
- Fulfillment optimization: Examine data, make recommendations, and take into account the cost, time-to-delivery, and preferred method and location for consumers’ orders.
- Visibility: Keep an eye on the whole supply chain and pinpoint specific incidents to foresee issues and create more effective procedures.
- Delivery and service scheduling: Align delivery obligations with available inventory, resources, and expertise to facilitate quicker handling of service requests.
- Payment collection: Obtain payments with ease using any method, including bank transfer, PayPal, credit card, cash on delivery, and more.
- Automated sales procedures: Keep track of every detail of every transaction, such as the products ordered, the payments received, and the status of the delivery, to automate the entire sales process.
Importance of Order Management
- Accurate inventory management: Good order management procedures work in tandem with inventory management procedures. A business must be able to compute inventory turnover ratio precisely in order to avoid losing money on overstock, as it is necessary to constantly monitor inventory numbers in order to efficiently complete orders.
- Order accuracy: A customer’s perception of a brand may suffer from delayed shipments or wrong merchandise. An organization can get more control and insight into every stage of the process by using effective order management procedures.
- Cost management: As previously shown, by increasing productivity and averting overstock and stock-outs, properly designed order management procedures may result in financial savings.
- Order fulfilment efficiency: Wherever possible, good order management techniques take into account how all systems and processes within the supply chain management with one another to increase efficiency without compromising accuracy.
Risks of Order Management
- Inventory problems: Inadequate demand forecasting, overstocking, understocking, or theft can all lead to inventory problems, which are a significant risk associated with order management.
- Delays in delivery: This is the third risk associated with order management. They might be caused by internal issues like order backlogs, staff shortages, or equipment failures, or external ones like bad weather, traffic, or customs.
- Data errors: One of the most frequent dangers identical with order management is the possibility of data errors resulting from human error, malfunctioning systems or poor communication. Unreliable inventory counts, incorrect order details, postponed shipments, and lost orders are all consequences of data inaccuracies.
Conclusion
In this article we have learned about order management. Order management refers to the processes that start as soon as a client places an order and often end when the customer receives their items, assuming there are no problems that need the customer to submit a support request.
Frequently Asked Questions on Order Management – FAQs
How do you explain order management?
Order tracking, order capture, and order fulfilment include order management.
What is responsible for order management?
In order to fulfil shipping and receiving requirements, the Order Management Specialist is in charge of overseeing procedures that guarantee inventory accuracy, efficient incoming inventory control, and reporting audit-activated operations.
Why do we need order management system?
In your supply chain, the Order Management System (OMS) adds value. Through the Order Management System, you can synchronize your products, orders, and future inventories, giving your consumers access to accurate information.
Is order management part of logistics?
Order management is essential to logistics because it guarantees that client orders are filled accurately and on schedule.