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Answering 10 Omnichannel Order Management FAQs


September 2, 2021
7 MIN READ
Vinculum
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The order management system is the foundational component of an omnichannel strategy. Omnichannel order management allows for the shipment of orders across multiple retail distribution channels, including online, mobile, and physical stores. The most successful omnichannel customers are able to offer their customers a consistent sale, purchase, and delivery experience. Omnichannel order management enables speed, accuracy, consistency, and authority. These attributes encourage cross-channel transactions while reducing errors and manual processes associated with complex orders.

Order management is an essential component of today’s omnichannel retail execution. While businesses can build comprehensive order management into their eCommerce or ERP system, the nuts and bolts of order flow, communication, and compliance are better served by separating order and fulfillment operations from product management systems.

A typical eCommerce store’s approach to order management is heavily based on operational efficiency. No enterprise eCommerce solution can deliver omnichannel service at the speed or level of detail required without the help of an advanced Omnichannel Order Management System. Order management systems are designed to help businesses manage the flow of orders into an organization and ultimately get shipped to customers. OWO, a best-of-breed order management system.

Here are 10 Solved Frequently Asked Questions you would need to go through before you decide to deploy an Omnichannel Order Management System:

1. How to determine if my ERP system can manage omnichannel orders?

An ERP system can manage your omnichannel order in a whole new way. We use channels (retail store, web, catalog) as separate subsystems under the main ERP umbrella. Retail stores can get orders from their website, the warehouse can fulfill customer orders and ship them anywhere. It’s an effective model that works for most medium to large-sized retail businesses.

The best ERP systems let you extend their functionality through purpose-built ERP extensions. While these exist to improve performance, they can also help drive business agility. That’s especially true when a solution like a Kanban enables you to optimize performance based on order volumes and types, while also providing the flexibility to quickly adjust as your business model evolves in response to rapidly changing market conditions or customer expectations.

2. What is a DOM System or Distributed Order Management System?

The Distributed Order Management System (DOM) is an end-to-end supply chain management solution that helps you manage and optimize product availability, inventory allocation, and fulfillment across your entire brick-and-mortar and online channels. It integrates with existing systems to provide comprehensive visibility of a customer’s entire purchase cycle across all channels.

The DOM platform enables the ordering system to see, for each customer and product, the optimal combination of partner locations where inventory has been aggregated. By aggregating inventory in larger quantities at fewer locations, the system can optimize the shipping price per unit to match the customer’s shipping needs and your business goals.

Once the customer has given their order to the DOM, it uses advanced technology to determine the best fulfillment location based on the availability of products and the processing capacities of each location. It then sends the order to this location, maximizing inventory optimization and sales.

3. What is ATS or Available to Sell?

Available to Sell (ATS) in eCommerce is a metric that indicates SKU performance on the site. It is calculated by adding backorders and reserved stock to stock on hand.

ATS = Stock On Hand – Buffer Stock + Reserved or Allocated

From an eCommerce perspective, Available to Sell (ATS) is the value of the physical inventory which is available for sale through Click & Collect and Home Delivery. ATS includes Stock on Hand, minus Reservations and Allocation – buffer stock. Available to Sell (ATS) is designed for marketers to have a 360-degree view of the available inventory for a product line.

4. What is ATP or Available to Promise?

Available to Promise (ATP) is defined as the inventory quantity that can be promised to a customer and still meet their delivery Window. Available to Promise (ATP) in eCommerce is when an order is able to be shipped within a specified lead time, or the maximum time that should pass before the order is fulfilled. It can include multiple scenarios such as:

For in-stocks,

ATP = Stock-on-Hand + Buffer Stock – Reserved and Allocated

For backorders, ATP typically includes reserved inventory and any allocated inventory for a product. Available to Promise (ATP) information is reported in tons but can also be reported in quantity available.

5. What’s the difference between ATP & ATS?

The real difference between Available-to-Promise (ATP) and Available-to-Sell (ATS) inventory levels is in what they are used for. Available-to-Promise inventory is used for quotes, bids, and sales orders, while Available-to-Sell inventory is only used as a baseline for Operations during the fulfillment process. An example of this difference is that if there’s a backorder on an item or it hasn’t hit your warehouse yet, you can still quote it to a customer even if it’s not ATS.

In a nutshell, Available to Promise is the status of inventory you can put on backorder. Available to Sell doesn’t mean you own it, but means that it is available for sale and will be shipped to you as soon as it becomes available (in stock and released).

6. What is Buffer Stock / Safety Stock in an OMS?

Buffer stock or Safety Stock is a quantity of inventory reserved for unexpected demand. When an item is in short supply or scarce, the buffer stock or safety stock option in OMS can manage the order fulfillment process so as to not crash the whole order fulfillment system.

7. What is a Split Shipment?

A split shipment is when a single order is shipped from multiple distribution centers (DCs). Typically, this occurs when inventory for a single order is located in multiple places.

For example, a split shipment may occur when inventory for an order is located in different facilities or in different stores. This will allow for incremental shipments to arrive closer together than if a consolidated shipment were created.

8. What are the benefits of Split Shipments?

  • Eliminates the requirement of a transfer order
  • Eliminate the labor requirement for consolidating items into a single package prior to the order is shipped to the customer
  • Using a dedicated OMS, your items get shipped directly to the customer from each in-stock location, and hence, Split Shipments ensures faster delivery of an order.

9. What is Order Consolidation?

Order consolidation is the process of shipping multiple orders together. Shipments going to the same destination are grouped into one large shipment and shipped together in order to save costs.

10. What are the benefits of Order Consolidation?

Order consolidation lets you combine multiple, separate orders from a retailer into a single one. It is particularly convenient for customers who have to be home to receive their order, such as those with only one person at home all day and do not want to keep running to the door, or those who must go to a post office to pick up packages.

Order consolidation services consolidate an order’s shipping and handling charges into a single shipment to the customer, often saving both the customer and the retailer money. This is convenient for a customer who has to be home, or visits a post office, to take delivery. However, in some cases, not offering consolidation may be more convenient or cost-effective for the customer.

Final Statement:

A best-of-breed omnichannel order management system can be found in a system that supports an array of various transfer processes. It can consolidate orders from multiple locations into a single order. It can create and track the status of transfer orders needed to consolidate items from different locations. It can assign a unique tracking number to each unprocessed transfer order, and it can produce reports for executive management on the orders that have been broken out for each outgoing order.

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