In our last post, we reviewed how implementing an order management system (OMS) can help you manage customer orders from any channel and how automation enables optimal customer support by providing visibility to your entire supply channel.
An OMS integrates your data and operations with your customers, global suppliers and regional warehouses, plus streamlines inventory tracking with your accounting system. But just how does this work across different channels and how does it help your business run smoother?
Let’s take a closer look at how orders are processed by an OMS for all four channels: traditional EDI, E-commerce marketplaces (like Zappos, Macy's and Amazon), eCommerce platforms (like Shopify, Magento and Big Commerce) and manual orders from small business retailers.
Integrating Order Management with Traditional EDI
Working with traditional retailers has most likely accounted for the bulk of your incoming orders. When you receive an EDI purchase order from a large retailer like Target, the process for handling that order should be outlined in your OMS, including: store pre-packs, ship-to locations and special handling.
First, a sales order is created from the EDI order, followed by the creation of one of many shipment types like a direct-to-distribution center or direct-to-store.
Then, GS1-128 labels should be created for your team to apply to the cartons or pallets. Next, the data and an invoice can be sent to the retailer. As with all EDI transactions, you will receive an electronic response as to whether your invoice and advanced shipping notice (ASN) were successfully received.
Integrating Order Management with E-commerce Marketplaces
This includes businesses like Zappos, Macy's, Amazon and eBay. There are key differences in how an OMS processes an eCommerce order as opposed to a standard fulfillment order. For instance, typically there is no need for an invoice to receive payment, but you may be asked to send an invoice to record the sale with some eCommerce retailers.
Here’s how it works: An order comes in from a retailer, such as Amazon, and the OMS transforms it into a sales order and generates shipment information. The order will then be closed out once a notification that the goods have shipped is submitted. Upon the shipment confirmation, you will receive payment for the shipment from the E-commerce marketplace. In a few cases, invoices are used, so when choosing an OMS, make sure it can handle this job as well.
Integrating Order Management with E-commerce Platform Orders
The OMS process for dealing with eCommerce platform orders for direct-to-consumer works much like a regular EDI order. However, in this instance, there are no invoices to process. The orders are turned into true sales orders to be processed, shipped and tracked. Payment remittance is derived from the shipment confirmation instead of an invoice. Inventory can be updated on your website on a scheduled basis.
Manual Small Businesses Orders
Many brands and distributors still accept orders from small businesses manually, by phone, fax or email. In this case, a customer service professional takes an order manually and enters it into your OMS. Once the information is in the system, you can process it for shipping and receive notifications on shipping and delivery. Shipments can be tracked using FedEx or other tracking numbers. PDF invoices are typically sent via email to close out the sale.
Integrating Order Management with Your Supply Chain Process
The critical thing to remember for each channel is that an OMS can bring order, ease and economy to a process that was once disjointed. OMS can harmonize all parts of your business: the third-party suppliers, back office and warehouses. Perhaps the most critical reason to adopt an OMS is that your information will be stored in a central location that gives a holistic view of your inventory, demand and fulfillment processes.
Working with a third-party logistics (3PL) provider while using your own OMS can be a challenge, since you must be able to forward orders to your 3PL so they can process them immediately.
Once you import the EDI purchase order into your OMS and have created a sales order, you can track if your 3PL has the ability to fill the order. Once verified, you’ll be able to send the correct quantities and order information to the 3PL. You may also create a backorder for shortages, if the retailer allows, or simply discard/record the amount.
Once your 3PL sends an ASN, you can import the shipped quantities into your OMS. Use this to create invoices that coincide with the correct shipping amounts for complete accuracy. Some of the more robust OMS solutions can automate the entire process for a complete hands-off approach.
Next: What’s Next? Innovation in OMS Management