Order Management Systems
Order management systems (OMS) are incredible solutions for many businesses. In this blog post, we’ll explore what an order management system is, as well as the services it provides, who can benefit from using one, when it’s relevant, why it’s useful, and how an OMS is integrated into a business. Lastly, we’ll share a bit about our recent experience with an OMS integration.
We recently finished the very first Orderbot integration with a Miva site, and we are very pleased with the results. However, the client: Motonation.com/Cyclista-america.com (same client with 2 separate Ecommerce sites) is even more happy.
What is an Order Management System (OMS)?
An order management system is a single platform that communicates with your other systems to simplify the purchasing, fulfillment (and, if necessary, the return) process for your customers, maintain records, and track inventories (even across numerous warehouses). They work exceptionally well for merchants with multiple sales channels (i.e., any combination of Ecommerce site (or sites), online marketplaces, call centers, and brick-and-mortar stores). An OMS also provides data with which to examine the customer journey and company processes, so that inefficiencies can be identified and amended.
An OMS is designed to manage and automate the sales/fulfillment process. Not every Ecommerce merchant needs an order management system. As sales numbers grow, order tracking and fulfillment often move from errand to task to chore to challenge. At the same time, keeping accurate real-time inventory numbers and monitoring the status of order fulfillment becomes cumbersome. An OMS reduces those burdens.
What Services Can an Order Management System Provide?
- Tracking orders across multiple sales channels.
- Monitoring inventory levels across multiple locations.
- Automating fulfillments including shipment confirmations and customer communications.
- Designating specific areas for products in a warehouse, reducing fulfillment time.
- Coordinating returns & reverse logistics.
- Connecting different systems to keep orders, shipping, and inventory accurate in real-time.
- Backorder/Pre-Book Order management.
- Connecting to accounting software to easily create reports.
Can I Use an Enterprise Resource Planning System?
Maybe. Enterprise resource planning (ERP) systems generally have the ability to integrate the services of an OMS, but an ERP integrates many more areas of organizational operations than an OMS. Whereas an OMS is focused on the order/fulfillment process, an ERP should incorporate most or all important parts of a business, including HR, Project Management, and Marketing, among others. Implementing an ERP is a major endeavor, and requires a larger commitment of time and capital than OMS. While an ERP should increase efficiency, most small or medium-sized businesses are unable to justify the costs of implementing such a comprehensive business solution.
Who Can Benefit from an Order Management System?
Ecommerce businesses, especially those with multiple sales channels, and retailers with multiple locations. An OMS is especially useful for businesses processing a high volume of orders, or which have complex fulfillment conditions.
When Should a Business Consider an Order Management Systems?
- When expanding to multiple locations, using multiple warehouses, or selling through multiple channels.
- If you are spending a lot of time tracking shipped orders.
- When maintaining inventory levels, or tracking inventory is getting harder, and taking time away from other tasks.
- If you use a 3PL (Third Party Logistics) already.
- When fulfillment processes are growing in complexity.
- If using a dropshipper, an OMS can facilitate order fulfillment without the need to manually enter orders.
Why Use an Order Management System?
- Menial order-related chores consume a lot of labor. An OMS automates tasks and increases efficiency by improving accuracy, speeding fulfillment, and reducing the chance of human error.
- When multiple systems are used for fulfillment, the OMS should eliminate the need to export and import data between them, lowering the cost of order processing and fulfillment.
- You aren’t quite ready for an ERP (Enterprise Resource Planning) system, and managing/fulfilling orders is taking up a lot of time.
- There are multiple warehouses (or stores) to keep stocked, or from which you ship.
- You want to improve forecasting for future inventory needs. An OMS tracks sales over time, helping you eliminate under and over stocking by creating purchase orders automatically.
- Scalability: as you grow and expand, the OMS will integrate with the enlarged systems you use.
How Does an Order Management System Integration Work?
Generally, through API integration. The process is rarely simple due to the goal of integrating multiple systems (for example: 3PL, Quickbooks, eCommerce Website, Warehouse Inventory, Amazon, etc.). However, once it is properly set up, an OMS will simplify a broad range of daily practices. The time and cost of OMS integration depends upon the number of sites and systems that must share information.
Integrating an OMS into a business involves several steps:
- Evaluation of Business Needs: The first step is to evaluate the company’s needs and determine what features and functionality are required.
- Selecting an OMS: Once the needs are identified, research and select an OMS that meets those requirements.
- Data Migration: Migrate existing order and inventory data to the OMS.
- Integration with Other Systems: The OMS is then integrated with other systems, such as e-commerce platforms, shipping carriers, and accounting software.
- Employee Training: Employees should be trained on how to use the OMS effectively to ensure that it is maximally effective.
By using an OMS, businesses can improve order accuracy, reduce errors, speed up order processing, improve inventory management, and provide better customer service.
There are numerous options for OMS providers: Orderbot, Flexpoint, Salesforce, Handy Fox, Fluent Commerce, and more. Each of them provides a different array of services. It’s crucial to select the order management system that fulfills your needs.
Our OMS Experience
Our recent OMS integration was the first that incorporated Orderbot with a Miva website (Motonation/Ciclista-America). We worked with our partners at Miva to help unite the various systems. Tayloe/Gray integrated both the Miva and Orderbot APIs so communication could flow smoothly both ways. Orderbot was involved throughout the process. As needed, Orderbot incorporates custom features for new clients into their system. Then they make those new tools available for all their clients.
The key pain point for our clients at Motonation/Ciclista-America involved manual data entry. There were a number of small chores to complete whenever they received an order. This introduced the possibility of human error. It also required manpower. The time spent simply moving information between systems kept growing as sales increased. Inventory levels could fluctuate leaving a product out of stock for long periods. There were also serious gaps in their ability to process backorders and pre-book orders.
Our client’s inventory is heavily dependent on overseas suppliers which led to stocking issues. Along with automatically generating fulfillment orders for their 3PL partner, the new system automatically creates sales forecasts and purchase orders so inventory levels will fluctuate less wildly. We also made sure the new system has real-time inventory so they can see exactly how much they have of each item they sell, and even drill down to see the number that are on-hand, available, to be shipped, and backordered. And as they grow, that system will scale. They now have the ability to include an unlimited number of sales channels and warehouses.
It was critical for Motonation/Ciclista-America to have backorder and pre-book order capabilities. Their backorder system can now handle partial order fulfillments, will automatically alert customers when there is not enough inventory to complete their order, and will handle client communication to find a solution. Pre-book orders also can be easily managed and fulfilled as new inventory is received.
The final results for Motonation/Ciclista-America: fewer data-entry chores, less time spent fulfilling orders, client communications automated, inventory management made easier, pre-book order and backorder problems eliminated, and much more time to spend growing the business.
Order management systems can reduce the labor you spend on individual sales and free your time to grow your business. If you want to discuss how an OMS can reduce your burdens and increase efficiency for your business, send us a message or give us a call.