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Order Management System- What, How and Why?

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Order management, as the word suggests, is nothing but the process of taking, organizing tracking and fulfilling purchase requests for a company’s products or services. It involves keeping track of the order itself and managing data around the customer like what’s their past order history? Do they pay on time? Are they a high-volume customer? etc.

An Order Management System (OMS) automates and streamlines the order processing for the business of a company.

A properly designed OMS encompasses the following modules:

  • Product information (descriptions, attitudes, locations and quantities)
  • Inventory available to promise (ATP) and sourcing
  • Vendors, purchasing and receiving
  • Marketing (products, catalogues and pricing)
  • Customers and prospects
  • Order entry and customer service (including returns and funds)
  • Financial processing (credit cards, billing, payment on account)
  • Order processing (selection, processing, picking, packing, shipping)

Magnifying glass and pen over graph as concept

How it works?

Usually, the order management process is considered to be complete once the entire order has been shipped out and delivered to the customer (either in multiple partial shipments or via Drop Shipments). The merchant usually follows up with the customer to ensure that he is happy and satisfied with the product or service being delivered. Therefore, the Order Management Process is also closely tied to the inventory management process that needs to perform.

What if there were no such systems!! What if it was manual?

The manual processes are a good starting point for any small ecommerce business. But once the order volume goes above 10 units a day, it becomes a bit more tedious. Copying and pasting information from email to web-forms become a chore. Keeping track of all the back and forth requests in an email system becomes confusing. The business owner starts spending more time worrying about the status of individual orders. At such point, there comes the sheer urge of well-designed Order Management System.

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So… should you be using OMS??

Well, depending on the needs & complexity of the company, order management system could be just one feature of business software or a mighty standalone solution that integrates with the additional solution. The type of products, price quotes and the type of audience will dictate the appropriate software solution for your business. Here are some of the features and benefits of OMS-

  • Having a central DB would significantly reduce the time spent for every day search.
  • Enhanced cash flow management.
  • Better interaction with customers by getting them notified with the latest updates.
  • Real-time order status for better customer service.
  • Creates a sense of ownership for customers.

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