The entire journey of an order – from the time a customer places it through delivery and post-delivery feedback collection – is referred to as the order management process. A typical order management process flow looks like this:
From the above flow, it is evident that there are too many processes and systems at play to ensure that the order management process remains efficient. Add in the everyday struggle to procure inventory and keep the supply chain moving in tandem with customer expectations and it’s easy to see that order management can be a complicated affair. Supply chain bottlenecks, customs and trade tariffs, natural calamities, etc., can all disrupt an otherwise smoothly moving order management process at any time.
In the wake of these difficult situations, how does an eCommerce player keep the order management machinery running smoothly? What are the must-have factors that can help mitigate threats and help magnify efficiency?
Let’s delve into the finer details.
In the age of Artificial Intelligence and Machine Learning, the trillion dollar eCommerce industry cannot afford to live with manual order management. Automating the order fulfillment process is essential for creating efficiencies and reducing costs. Order management systems must be used to collect orders from multiple sales channels, including the online store, physical store, social store and so on. Further, automation should also applied to the parcel sorting and picking process as is done by global 3PL players.
UPS, the global logistics player, has adopted new-age technologies to automate parcel sorting and delivery systems. On the other hand, a study by Warehousing Education and Research Council (WERC) has found that 35% of warehouses do not use a Warehouse Management System (WMS), a drawback which impedes the order management process.
Inventory management and order management go hand in hand. You cannot process orders for stock that is not physically available. Of course, backorder processing does give some solace during peak seasons, but there is an inevitable need to keep tabs on real-time stock levels.
Poor inventory management can put severe stress on the order management process. It is embarrassing and bad for the market standing of a brand that takes an order that it cannot deliver.
Further, if you are using old-age spreadsheets to manage the process, you are more susceptible to data catastrophes. A single misplaced row or column is all it takes to unravel your order management process. Investing in an inventory management system that can integrate with the POS or order management system can help avert such problems.
Tackling the travel time in picking, handling and shipping the product is the most crucial phase of the order fulfillment process. Even the tiniest mistake like picking the wrong product or putting it in the wrong bin for dispatch can lead to a series of unfortunate events. The negative spiral will include a product return, lost shipping and delivery costs and, ultimately, an unhappy customer.
Creating hot zones for each SKU or each picker can help sort out that issue. Each hot zone will have only specific SKUs or group of SKUs making it easy to pick and parcel them. This is a perfect strategy to follow if there are frequent orders flowing in for similar sized products.
These metrics are a reflection of how well your order management process is performing and can help you identify where it needs tweaking for improvement.
Amazon is launching a new last-mile delivery program where 20,000 Mercedes-Benz Sprinter vans will be used to deliver packages to customer the same day.
3PL players are leveraging high-end technology to streamline their pickup and parceling processes. Order management is no longer stuck in spreadsheet hell. It is fast becoming automated, streamlined and simplified.
Every eCommerce player, big and small, should streamline order management. Some ways to make it effective are discussed above.
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