Technology

What is Order Management & Should My Business Care

Order management starts when a customer places an order. It ends once they receive the product . Above all, it allows businesses to coordinate the entire order to fulfillment process. That is, from order taking, to order fulfillment to order delivery.

The order cycle workflow differs depending on a company’s needs. However, the typical order management cycle includes these three steps   Wikipedia.

Each Stage of the Order Management Cycle

1. Placing the order

The customer places the order remotely through a business sales channel.

2. Receiving the order

The order information passes through the customer facing side of the business to fulfillment center. Furthermore, this is when the processing of the order begins.

3. Picking the order

Picking refers to following a picking list to fulfill the order. That is, retrieving product(s) from the available warehouse inventory. Thereafter, delivering it to a packing station for shipping.

4. Packing the order

Once the order arrives to the packaging area, it packs in a way that minimizes the dimensional weight for shipping.

5. Shipping the order

After the item is packs, it loads on a delivery truck and ships out to the customer site.

6. Delivering the product

Finally, the product arrives at the customer site.

Measuring Order Management using the Order to Cash Process

In wholesale, “Order to Cash” describes the process of placing an order to the time of delivery and payment. In other words, it measures the entire process from start to finish. Firstly, measuring the order side. Secondly, measuring order to cash side.

The order to cash process includes:

1.  Placing of order

In summary, the customer placing, receiving and paying for the order. Certainly, the customer is assisted by sales or customer service in processing the order through the business.

2.   Customer experience

Sales keeps a record of each customer and their order history. Importantly, this includes products, volume and payments. Above all, it determines if the customer receives the right product at the right time.

3.    Order fulfillment

As a result of placing the order, the order goes to the warehouse responsible to fulfillment.  Most noteworthy, in the warehouse, inventory is monitored .

4.     Invoicing of order

Above all, once the order fulfillment happens, the order converts to cash or accounts receivable. As a result, the order is now revenue. Furthermore, an invoice generates to the customer. Finally, the payment is made on the terms in place with the customer.

5.     Delivery of Order

In conclusion, the product arrives at the customer site

What is an Order Management System?

An order management system (OMS) is a digital of managing the life cycle of an order.  Above all, it tracks all the order information throughout the order management cycle. Hence, this includes order entry, inventory management, order fulfillment and order delivery.  

Consequently, OMS organizes and automates everything that needs to happen in the order management cycle to get customers what they ordered on time.

Above all, OMS speeds the order to cash cycle. Furthermore, it reduces errors. Moreover, it reduces costs in the order to management cycle.

Finally, it enhances the customer experience. Consequently, the customer places return orders with the business.

OrderJump is an example of an OMS.

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