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Published: May 6, 2024

Order Management System: Your A-Z Guide to Maximize Efficiency Across Your Business

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Rahul is a CSM-certified PM with deep experience in iOS, Flutter, Ionic, ROR & more.
Guide to Order Management System

Quick Summary: An order management system is a type of software that handles the process of placing, tracking, and managing orders, inventories, and customer information. In this blog, we discuss the features and functions of an OMS, and how it can help businesses improve their daily operations and increase customer satisfaction. We also provide tips on choosing a good OMS, so keep reading!

Effective order management is crucial for operational efficiency and customer satisfaction in modern commerce. Businesses face the challenge of keeping themselves updated, maintaining their stock visibility in real-time and order processing complexities. Order management systems (OMS) control these issues, working like the central hub that links to eCommerce platforms, stock levels, and shipping counterparts. It helps businesses to make holistic decisions and to carry out the required management improvements.

One key OMS feature is inventory management - it enables businesses to track inventory, forecast demand, and reduce the risk of overstocking or stockouts. As for the ordering management system, it can order routing and communication with clients, contributing to operation usability and enhancing the buying experience. Businesses investing in OMS solutions and automated inventory management systems are better positioned to navigate the challenges of modern commerce and drive growth.

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On This Page
  1. OMS: Meaning, Importance, Examples
  2. Process of Order Management Software
  3. Features of Order Management System
  4. How to Choose the Ideal OMS?
  5. The Final Lines

Order Management System: What It Is with Examples!

An order management system (OMS) is a software solution that manages the end-to-end lifecycle of orders received from customers. It tracks and manages all the information and processes, such as order entry, inventory management, order tracking, shipping, invoicing, and fulfillment. It helps businesses streamline their order workflows and improve efficiency in handling customer orders. This has collectively led the OMS software market size to spiral at a CAGR of 5.48% and reach a value of USD 3.17 billion by 2030.

Order management is an inevitable part of the supply chain that influences how customers perceive the business or the brand. In multi-channel operations, clients anticipate a smooth journey from ordering online, receiving notifications, and returning/exchanging goods. At each customer touchpoint, there lies a chance to gain customer satisfaction, retention and increased revenue, given you have robust OMS-backed supply chain solutions in place.

Furthermore, the omnichannel journey allows companies to make personalized recommendations, which can result in upsells and cross-sells, a strategy that will lead to increased revenue and higher success for the business. A few order management system examples could be the Magento cloud-based order management system, SAP OMS system, and Oracle order management.

How Does the Order Management Process of an OMS Look?

OMS process has a direct tandem with the daily tasks' achievement and customer satisfaction. The order management process generally consists of order placement, fulfillment, stock inventory, shipping, post-sales follow-up, integration, and reports. Though most order management solutions follow a common seven step process, these can be modified as per the particular business requirements.

Steps in Order Management Solutions

1. Order placement: Customers place orders across multiple channels, using either online stores or mobile apps. The OMS system runs on these orders and then saves them in a centralized database.

2. Order fulfillment: Once an order is accepted, the OMS processes the order for fulfillment. This is a process in which goods are chosen from a company’s inventory, packed, labeled, and pulled together for shipment.

3. Inventory management: The OMS stocks inventory in different ways: some products are pre-sold, such as for the fall-winter collections; consignment inventory, less common, but it exists; and replenishment orders based on seasonal predictions.

  • Single order: In case the order is for single items, the order system management will check if every item in the order is available. The inventory levels will be updated accordingly.
  • Batch picking: When order picking from different clients is combined in the same route for efficiency purposes.
  • Zone picking: Implementing the aspects of warehouse management software to segregate the warehouse into areas. The system assigns pickers to a particular zone to decrease the amount of time spent traveling from one area to another.
  • Wave picking: It involves consolidating orders that can be processed at one time and picking them simultaneously for increased efficiency.

4. Shipping: The online order management system ensures accurate shipping by:

  • Checking if the desired quantity is contained in the shipment.
  • Choosing the optimal box size in order to not have extra shipping costs.
  • Making sure that everything is well-packaged and safely placed in the delivery van to prevent items from getting damaged.
  • Meeting this objective involves tracking the orders and sharing this information with the customers so that they can monitor the status of their order.

5. Post-sales follow-up: The results of the shipment may be forwarded to the integrated order management system, which can initiate automatic follow-up emails in order to collect clients’ views or suggest more products or refunds and with the same inventory update.

6. Integration with other systems: The OMS displays different levels of integration with other retail management software solutions such as accounting software, CRM systems, and shipping carriers, eventually making the operations faster and more efficient.

7. Reporting and analytics: The OMS is equipped with reporting and analysis capabilities. These support businesses in monitoring certain crucial indices, including order processing times, levels of inventory turnover, and customer satisfaction.

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Features to Look Out for in an Order Management System

It is essential to implement an OMS with features that complement your existing infrastructure to reap its optimum benefits. Check the salient features you must include while developing custom software or investing in a ready-made one.

Key Features for Choosing Order Management Software

1. Visibility: The software must give the whole order management process visibility to businesses so they can track orders, follow the inventory level, and analyze the performance metrics with live data.

2. Intelligence: It must employ data analytics and machine learning algorithms to provide companies with valuable insights and recommendations. Thereby, simplifying decision-making and helping businesses align with their operational objectives and goals.

3. Flexibility: A modular web-based order management system must have configurable workflows that can be tailored to the specific necessities of the business in a changing business environment. This would guarantee that the system will be able to grow and become more advanced along the way.

4. Real-time stock: It must enable companies to remain at the forefront of managing stock levels, stock positioning, and removes inventory level uncertainty. It can be a cloud-based inventory management system providing real-time updates about inventory levels, locations, and logistics.

5. Delivery and service scheduling: It must facilitate businesses to schedule deliveries and services as per customer demand, availability, and delivery channels, resulting in the deliveries being made in a timely and efficient way.

6. Customer engagement technologies: It must consist of personalized marketing, customer self-service portals, and multi-channel support channels for more effective customer engagement and retention.

7. Fulfillment optimization: It should be capable of reducing order fulfillment time, mitigating manual use of tasks, eliminating errors, and improving the average time and cost for the delivery by using automation technology.

8. Accounting integration: Accounting software should be integrated to simplify financial processes, including invoicing, billing, and payment reconciliation, which facilitates less paperwork and thereby minimizes errors.

9. Sales channel and support: It should have multi-sales channel capabilities like online stores, mobile apps, and physical stores, and it should give sales executives the necessary sales info and tools to aid in their operation.

10. Compliance management: The automated order management system must ensure that compliance with relevant standards and regulations is made to protect customer data. This comes with data security, privacy management, and audit tracking tools to guard against any violations of rules and regulations.

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How to Choose the Best-Fit Order Management Software System?

Whether you’re looking for order management software for a small business or a large-scale one, it is vital to map out your business needs, identify bottlenecks, consider integration requirements, and much more. Here, we’ve brought you the quick checklist to choose an ideal OMS.

Steps for Choosing Order Management Software

1. Evaluate your business requirements: Identify the current and forthcoming needs of your business, such as the demand for orders, sales channels, inventory complexity, and customer expectations.

2. Functionality and features: Search for a system composed of vital functions like order processing, mobile inventory management, shipping integration, and reporting restricted by your business scenario.

3.Integration capabilities: Evaluate the engagement of the enterprise order management system with your current systems like ERP, CRM, and eCommerce platforms. For instance, evaluate if the OMS facilitates you with data integrity and compatibility.

4. Deployment options: Select an on-premises store or cloud-based custom order management software that fits your business needs based on management, scalability, and maintenance requirements.

5. Scalability and flexibility: Pick an OMS that can scale along as your business grows and holds intact amidst market fluctuations, enabling market channel shifts and new features.

6. Cost-effectiveness: Analyze the overall value of ownership, which includes initial capital costs, recurring expenses, and potential gains from enhanced working and error reduction.

7. Vendor support and reputation: Consider a vendor's reputation, customer service, and proof of ability to provide successful OMS solutions.

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The Final LinesIntegrating a multi-channel order management system into your business operations can be the key to further development and retaining your customer base. You may partner with a leading company offering next-gen tailored enterprise software to help you build high-performing and sustainable OMS solutions. An efficient and reliable order management system software that can handle multi-channel selling and automate sales orders should be an essential part of your sales and marketing campaign.Whether you want to enable precise inventory tracking, optimize third-party logistics, or combine your sales channels into a single platform, our experts are ready to assist you. Contact us now!

FAQs

What are the advantages of using OMS software?

What is Distributed Order Management?

What is the role of OMS in retail?

What trends contribute to the complexity of order management?

What are the four stages of order management?

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Rahul Shrimali

Rahul Shrimali

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About the Author

Rahul is a Project Domineer who comes with 13 years of professional experience. He holds a certification in CSM and has lead successful projects across several geo-locations. His specialization lies in popular technologies like iOS, Flutter, Xamarin, Ionic, Ruby on Rails.