What Order Management Software Can Do for You
With a looming recession, sky-high inflation, supply chain problems and global geopolitical challenges, times are tough for distributors, but there are opportunities to outperform. Customer orders, the lifeblood of any distribution business, are slowing down. Now more than ever, you need the features, automation, and control that the best order management software systems offer. Good order management software will help ensure that customer orders are received, processed and fulfilled quickly, accurately and efficiently. All order management systems are not the same, and the best order management software will give you advanced features, improve management visibility, improve fulfillment efficiency and increase customer satisfaction.
Customer orders can come in through multiple channels. They could be from over-the-counter-sales, placed with your salespersons, placed by customers through your self-service portal, placed on your online eCommerce stores, or delivered through EDI (electronic data interchange). The best order management software will let you see all of these orders on one screen regardless of where they originate. For eCommerce orders, the best order management software systems will let you manage fulfillment across multiple warehouses. You should be able to route orders to warehouses based on inventory availability, and proximity to customer.
Processing orders entails moving orders that have been received through the fulfillment steps of (1) picking, (2) packing, (3) shipping and (4) delivery to customers. The best order management software systems will let you track the progress of orders through each of these fulfillment steps. Each fulfillment step should allow the flexibility to process orders one-at-a-time or more typically in batches. To be able to fulfill orders effectively, the best order management systems will work seamlessly with inventory systems to track the available quantity of each product by location by multiple units of measure across multiple warehouses.
Order Processing Flow
The complete order processing flow always includes these sub-processes:
Picking orders entails getting the ordered products from warehouse bins and organizing them by order. To make this work effectively order management systems work with inventory systems that keep track of available quantities of products by location. The best order management systems will then let you optimize picking and minimize passes through the warehouse by directing pickers to the exact location.
Packing orders requires boxing up the items in the most efficient way for shipping and generating packing slips to record which items were put in which box.
Shipping entails preparing orders for delivery. The best order management software will allow you to deliver orders to multiple customers by delivery route, or ship orders individually through carriers or LTL shippers. If you use carriers your software should allow you to rate-shop between carriers to achieve the lowest rate and best delivery terms. Once an order is shipped the best order management software will be able to send the customer an email with shipping information including carrier, tracking number and delivery date.
Delivery to Customers
Delivery to customers may be handled by the carrier or by your delivery trucks. Your software should allow you to track delivery status and capture proof-of-delivery.
Integration with Other Processes
The best order management systems will be fully integrated with other modules to accommodate the full Order-To-Cash workflow. To complete the whole Order-To-Cash process, order management should work seamlessly with processes for (1) billing, (2) collecting payment, (3) reconciling Accounts Receivable and (4) reporting.
Once shipped the best order management software systems will send the invoice by email to the customer and update the accounts receivable tracking.
The best systems will allow for payment remotely by ACH, credit card or wire transfer on a secure payment portal. Payments should also be allowed by check or in person in cash.
Reconciling Accounts Receivable
The software should be able to automatically record payments in the system and update customers’ accounts receivable balances.
You need to be able to analyze performance of all aspects of order management and processing. The best order management software will allow extensive tracking and reporting of orders, order fulfillment statistics and performance, customer accounts receivable statements and balances.
What are the Benefits of Order Management Software
The best order management software systems will deliver a number of key benefits, including:
Optimize Inventory Levels
Understanding demand by analyzing incoming orders and fulfillment gives you the ability to optimize inventory levels. Reducing the levels of investment in inventory, while maintaining customer service and avoiding stockouts is the critical balancing act for distributors. To accomplish this, the best order management software systems will let you slice and dice your sales and evaluate seasonal effects to help determine where you can cut back on inventory levels safely. If you are successful, you will be able to reduce investment in inventory and turn inventory more frequently, and this will have a dramatic effect on your business’ ROI.
The best order management systems will let you analyze all the order processing steps and give you the tools to improve your processes to cut down on manual steps. By batch processing orders and directing pickers through the warehouse, you can reduce fulfillment time, cut down on unnecessary steps, increase efficiency and cut costs.
Maintain Customer Service
Avoiding errors in fulfillment, the wrong goods delivered or running out of stock can have a meaningful impact on customer satisfaction. Also returns and refunds can become very costly very quickly. Having the right information always available to respond to customer questions will also go a long way to improving customer satisfaction. The best order management software systems will help you better manage order processing to cut down on mistakes, increase efficiency, improve cost and increase customer satisfaction.
Avoid Supply Chain Problems
With visibility into and access to the overall flow of orders at all times, the order management software will help you better manage purchasing and warehouse transfers to anticipate and minimize supply chain problems.
The best order management software is a foundational requirement for distributors managing and processing orders at scale. The effect of improving your order management will be to reduce order processing errors, improve efficiency, lower the costs of your operations and increase customer satisfaction. If your order management software doesn’t stack-up, contact us today to see what Accolent ERP’s order management and processing can do for your business.