Today’s customers expect a seamless shopping experience: Orders should be placed without major hurdles and returns must be processed easily. It’s the task of logistics to move the required goods from one place to another as safely, efficiently and sustainably as possible. For this to succeed, orders need to be optimally planned and coordinated, and the individual sections of the supply chain must be precisely matched. We explain the key role of an active Order Management in this context and discuss how companies benefit from intelligent Order Management.
Order Management – a central process in the supply chain
An order begins when it is placed and ends only when the product reaches the end customer – regardless of whether a company operates in the B2B or B2C sector. However, ordering processes are quite complex: even a small error in order processing can result in goods being undeliverable, arriving late or even the wrong products being shipped. Such experiences have a negative impact on customer satisfaction and can lead to lost sales. But how can the workflows and processes be designed better and more efficiently? A well thought-out Order Management system can help. As a fundamental part of supply chain management, it covers the acceptance, processing and handling of orders and helps to ensure that the goods arrive at the right place on time.
The individual elements of data-based Order Management include:
- Order entry and validation: Via email, app, online stores, EDI or other channels, the order is placed, containing information about the desired products, quantities and delivery dates. The order is then checked for completeness and accuracy – this includes the validation of product availability, payment information and customer data.
- Inventory check: Are there sufficient quantities of the desired goods in stock to fulfill the order? If this is not the case, Order Management can initiate alternative processes such as reordering or backorder management.
- Order assignment and processing: In the next step, the order is forwarded to the appropriate suppliers or location. The orders are prioritized according to criteria such as urgency, individual customer requirements or booked delivery dates. The final order processing in the warehouse or production facility involves picking, packing and labeling the goods for shipment.
- Transport and delivery: With the selection of the ideal means of transport and the optimal route, taking into account the agreed delivery date, the planning and execution of the transport takes place up to the delivery to the customer. Order Management ensures that the status of orders can be tracked and traced in real time at all stages.
- Reporting and inventory management: Throughout the order process, Order Management provides visibility of data in order to ensure traceability of all steps. The information is used for reporting, performance analysis and process optimization at the same time. Based on the captured data, inventory can be updated and reorders can be activated automatically.
How companies benefit from Advanced Order Management
The DNA for efficient inventory control is digital data: With smart order management, companies gain insight into all automated processes from order acceptance to delivery. This increased supply chain visibility allows managers to react flexibly and agilely to changing conditions and implement necessary adjustments quickly: Insight into and access to all phases of the order processes make it possible to prioritize orders if necessary or to change delivery routes spontaneously.
In this context, the automation of individual processing steps, such as picking or packaging of the products, ensures acceleration and thus shorter throughput times and faster deliveries. At the same time, errors that can quickly occur with manual data entry and processing are significantly reduced. The resulting accuracy in terms of inventory, product availability and order status enables companies to reduce operational costs and increase profitability through optimal resource utilization. After all, Order Management systems are scalable and can be adapted to the growth of a company, so that even an increasing order volume can be processed quickly.
Access to and comprehensive analysis of relevant order processing data supports managers in making strategic decisions, identifying trends, and improving supply chain performance. Last but not least, efficient Order Management also manages aspects of the customer journey and improves communication with customers, as information on shipping status or expected delivery dates is passed on in real time.
The future of Order Management is digital
Active Order Management is at the heart of efficient, customer-focused logistics and covers the entire lifecycle of an order. With the help of advanced digital solutions, companies not only keep track of their inventory, but can also monitor the performance of their supply chain and quickly adjust and optimize processes as needed. While ERP systems provide integrated platforms for managing orders, finances or inventory, cloud computing enables access to data and applications regardless of location.
Transport management systems (TMS) in turn enable the planning and control of the physical movement of goods. Barcode and RFID technologies are also widely used to identify and digitally track products as they move to their destination. They also improve the accuracy of inventory management and picking. This process is supported by sensors and Internet of Things. Which digital solution is ideal for a company’s Order Management depends on its individual requirements. In most cases, an integrative approach with combined technologies works best to take full advantage of the opportunities and possibilities.