Improve Your Multichannel Order Management Software and Processes

In this article we look at how you can improve your multichannel order management software and processes. There are really 3 processes: taking orders, managing orders and processing orders, but the software that manages this whole workflow is usually referred to as order management software.

What has Changed?

Why do you need to rethink your order management software and processes, and what has changed – you might ask? Well, the short answer is everything has changed. The Coronavirus pandemic created an explosion in eCommerce and now customers are placing orders in multiple ways. Your order management software has to accommodate this.

Also, there have been many advancements in technology. Your salespersons and many of your order entry personnel may now be remote. Your order management software has to accommodate these workplace changes. You also need to take advantage of processes that improve the efficiency of your order management processes.

Multichannel Order Management Software

We are seeing major changes in how customers place orders. It used to be that customers would call your salespersons and dictate their orders. That still happens, but it is happening less and less as more customers place orders in different ways. Accordingly, one of the first things you must do is to ensure that you have multichannel order management software. Multichannel order management software, just as its name implies, accommodates orders being placed through multiple sales channels. Your multichannel order management software should allow customers to be able to place orders in several different ways. Firstly, customers should be able to call your salespersons and place orders as they have historically. Secondly there are a cadre of walk-in customers, many of these are tradespersons (contractors, painters, plumbers, etc.,) that choose to purchase over-the-counter. So, your multichannel order management software has to offer POS or over-the-counter capability. Thirdly, customers have now become accustomed to searching online for what they need and want the ability to place orders through eCommerce. Your order management software should allow you to create online stores on one or more eCommerce platforms such as Magento, Shopify or Woo Commerce as well as one or more eCommerce marketplaces such as Amazon or Walmart. These online stores could have the same or different brand names and could offer the same or different product lines. However, all these online store orders will need to be pulled into your multichannel order management software and processed and fulfilled from the same backend ERP system. Fourthly, despite the widespread uptake of ecommerce, many customers demand the complex pricing and terms that they have previously negotiated with you, while still wanting the convenience of shopping online. To accommodate this, you have to offer customers access to a self-service online portal. Using the self-service portal, they will be able to place their own orders online and get the same pricing and terms they would if they had placed their orders with your salespersons.

Providing multichannel order management software that is responsive to these multiple different ways in which customers want to order will result in more orders and repeat customers.

Managing Your Orders

What is Order Management? Wikipedia defines order management software as a system used for order entry and processing. Simply put though, once orders come in, the multichannel order management software records these orders, records where they came from, then keeps track of them through the fulfillment process through delivery of the ordered items to customers.

Your multichannel order management software should organize orders by stage so you can quickly see where they stand in the fulfillment process. The software also needs to track which specific channel orders came from, such as which online store. When orders are received and when they are ready to be shipped the multichannel order management software should update the customers on the specific channel the orders were placed in.

Processing Orders

Order processing refers to the steps through which orders are moved sequentially through all the order stages. Wikipedia, defines order processing as the workflow associated with picking, packing and delivery of the ordered items. You need this flow to be simple and robust and automated through your software.

Your multichannel order management software must be able to process orders from one order management stage to another either one order at a time or together with other orders as a batch. Fulfillment processes of picking, packing and shipping are often managed as batch processes.

Steps to Improving Order Entry

To improve your order entry, you need to make it easy for orders to be placed on your system.

1. Allow Orders from Multiple Channels

You need multichannel order management software to allow for the ability to take orders in multiple ways. You need to accommodate orders placed through your salespersons, over-the-counter sales, orders placed through a self-service portal or orders made in online stores on one or more eCommerce platforms or eCommerce marketplaces. All these orders can be pulled into your ERP system with multichannel order management software and fulfilled through your ERP system.

2. Simplify Pricing for Salespersons

Automate pricing with advertised or special pricing, contracts, matrix pricing, quantity breaks, and more, to minimize errors. Make sure your multichannel order management software provides rules for minimum margins so salespersons know exactly how much they can discount.

3. Multiple Warehouses and Multiple UOMs

Allow salespersons to select from multiple warehouses to fulfill the order and default the customer’s regular shipping method. Automatically flag for salespersons which items are in stock and which need to be backordered. Prompt for alternates and upsell accessories.

Sell in multiple units of measure to make it easier for customers to get exactly what they want.

4. Payment Options

Your multichannel order management software should allow for orders to be placed on account for your established customers or paid immediately for orders placed on online stores. You need to facilitate payment through credit cards, ACH, wire transfers or checks.

Steps to Improving Order Management

To improve your order management, you need to ensure that orders move automatically from stage to stage through the order management cycle. Your multichannel order management software should make this as efficient as possible. Improving and automating all or any of the following order management steps will improve your overall process.

1. Order Placed

Orders can be placed by customers through your salespersons, or by customers directly using your self-service online portal or by customers directly on multiple eCommerce platforms.

Make sure your multichannel order management software automatically records these different types of orders and keeps track of them by channel. This is important since you will want to be able to update customers on each channel and you will be able to evaluate the performance of each selling channel independently.

2. Order Released to Fulfillment

When an order is completed, it can be moved to fulfillment. Your multichannel order management software should automatically flag all orders moved to shipping as Ready to Pick. Orders should be able to be picked individually or in batches using a master or consolidated pick ticket – this can cut down significantly on multiple passes through the warehouse and save time.

3. Order Being Picked

Your multichannel order management software should allow orders batched for picking to be assigned to a picker and a route through the warehouse specified for picking the batch. The inventory at each location should be immediately updated as an item is picked to ensure that the picker following will get directed to the right location to pick the quantity of an item that is needed.

4. Order Picked

Once an order is picked your multichannel order management software should allow it to be packed in multiple boxes with packing slips created automatically for each box. The order should be able to be assigned to a shipping carrier and freight rates and tracking numbers obtained and shipping labels printed.

5. Order Packed

When packed your multichannel order management software should allow orders to be shipped either by releasing orders to a shipping carrier or when the distributor’s trucks are dispatched by delivery route. Orders are then en route to customers.

6. Order Shipped

When an order is shipped and released from the warehouse, your multichannel order management software should mark the order as ready to be invoiced to the customer.

7. Order Invoiced

Once shipped, invoicing the customer is the completion of the revenue recognition process for GAAP purposes. The Invoice should be able to be either put on the customer’s account or the payment that was taken for an order placed in eCommerce, applied.

Steps to Improving Order Processing

There are several steps you can take to improve your order processing. You don’t need to become a fulfillment expert overnight, but you can implement some of the following steps incrementally to continually improve your fulfillment process and improve business returns.

1. Implement Warehouse Locations and Batch Processes

It is easy to see why it is inefficient for a picker to traverse the whole warehouse to fill one order than retrace his steps for the next order.

Start by setting up your warehouse locations properly to maximize efficiency. Set up packaged and bulk locations for products and track inventory by locations to move products from bulk locations to easily accessible picking locations.

Then consider batching orders that can be efficiently picked together and assign the whole batch to a picker.

Your software should allow you to assign a particular route through the warehouse to a specific batch.

2. Implement a Wireless WMS System

wireless WMS system can guide a picker through a warehouse following an assigned route or by location sequence.

Also, allowing pickers to pick multiple orders by scanning products cuts down on mistakes, and updates the inventory at each location in real time.

Packing an order that comprises multiple items and requires several boxes, is much easier to track if each item can be scanned and automatically linked to an order and a box.

Similarly, when shipping orders that contain multiple boxes scanning a box is much easier and cuts down on errors.

3. Automate Customer Updates

Your software should be able to automatically update an eCommerce site when you have a tracking number issued for a box and when the order is shipped.

Ideally you need your multichannel order management software to be linked directly to small parcel carriers, as well as LTL, FTL and intermodal carriers for freight.

4. Consider Whether Linkage to a 3PL Makes Sense

For most distributors, the costs of order fulfillment are the largest controllable costs on a per item basis. Fulfillment costs are highly dependent on automated efficient processes and most of all on scale. Larger operations get access to efficiencies of scale that are not available to smaller businesses.

If your business scale warrants it, it may make sense to consider out-sourcing your whole fulfillment process to a 3PL rather than owning and managing your own warehouse. Fulfillment by Amazon and other third-party logistics providers are worth considering.

You need to ensure that your multichannel order management software allows you to out-source your fulfillment operations if this makes economic sense for you. Also depending on the geographic footprint of your sales, you may be able to cut down on shipping costs and delivery times by keeping your inventory closer to customers.

Learn More

Accolent ERP is a state-of-the-art Cloud-based ERP and multichannel order management software system that facilitates Taking Orders in multiple different ways, automates Order Management and provides a robust, systematic Order Processing workflow. Accolent ERP allows for complex products with multiple units of measure, multiple locations, tracks inventory by location and provides comprehensive Inventory Management. Accolent ERP supports orders taken by salespersons, entered by customers on a self-service online portal and on multiple linked eCommerce platforms. Contact us to learn more about Accolent ERP.