Order Management System

An order management system (OMS) is a software platform that enables order orchestration and collaboration with fulfillment parties while optimizing every process in the order life cycle. It serves as a central hub that connects various stakeholders, including suppliers, warehouses, carriers, and customers, to streamline and automate the entire order fulfillment process. It helps businesses of all sizes improve order processing efficiency, enhance customer satisfaction, and optimize their operations.

A distributed order management system (DOMS) is software that allows brand owners to manage and process their customer orders from multiple channels, such as e-commerce websites, physical stores, and call centers. It provides a centralized platform that integrates with existing systems, such as inventory, payment processing, and customer relationship management, to streamline the order-taking process. Distributed order management also enables real-time order fulfillment and tracking, ensuring that customers receive the right products at the right time.

Enterprises operating in complex supply chains should prioritize a flexible and configurable system to empower businesses to quickly respond to or anticipate market shifts and convert them into opportunities for sustained differentiation and competitive advantage.

Traditional distributer order management systems offer integration to a commerce server, some logic for allocating orders to a fulfillment location, and then integration with carriers to execute the fulfillment process – which is good on a basic level, but insufficient to adequately handle an enterprise’s growth nor the pressing need to adapt quickly, continuously, and effectively to change. For greater business value, solutions should converge orders, inventory, and logistics management to better tie multiple suppliers, customers, and enterprises together.

The "distributed" aspect refers to its ability to coordinate and synchronize order processes, data, and resources across various locations, partners, and channels. This differs from an OMS, which primarily focuses on managing the order fulfillment process within a single organization. An OMS handles tasks such as order placement, inventory management, shipment tracking, and customer service, and OMS solutions are often integrated with various internal systems, such as inventory management, accounting, and customer relationship management (CRM), to provide a holistic view of the order lifecycle.

On the other hand, a DOMS takes order management to a broader level by extending its capabilities beyond a single organization. It provides a centralized platform that connects multiple parties, including brand owners, suppliers, fulfillment centers, carriers, and customers. DOMS facilitates collaboration, communication, and synchronization of order-related data and processes across these distributed entities.

An OMS can perform a variety of tasks such as receiving and processing orders, managing inventory levels, tracking shipments, generating invoices and receipts, and providing real-time updates to customers. The system can also integrate with other software and services such as e-commerce platforms, shipping carriers, and accounting software to streamline and automate the order management process. Through order planning and orchestration, the OMS optimizes order fulfillment by efficiently allocating resources, coordinating activities, and ensuring timely and accurate order execution.

Order management systems can perform a variety of tasks such as receiving and processing orders, inventory management, tracking shipments, generating invoices and receipts, and providing real-time updates to customers. The system can also integrate with other software and services such as e-commerce platforms, shipping carriers, payment gateways, and accounting software.

Today’s challenge is not only managing high customer demands across multiple channels but doing so amid disruption and ensuring a smooth supply of product from global suppliers.

To streamline demanding inbound and outbound flows, an OMS would help with:

1. Centralizing order management: An OMS consolidates order information from multiple sales channels and marketplaces into a single platform. This helps businesses to efficiently manage orders and eliminates the need for manual data entry, which can lead to errors and delays.
2. Inventory management: An OMS helps businesses to keep track of their inventory levels in real-time. This enables businesses to avoid stockouts, overstocking, and mismanagement of stock. By using an OMS, businesses can optimize their inventory levels and improve their order fulfillment rates.
3. Order processing: An OMS streamlines the order processing workflow by automating order routing, order verification, and payment processing. This reduces the time and effort required to process orders manually, which helps to improve the speed and accuracy of order processing.
4. Shipping and fulfillment: An OMS provides businesses with tools to manage their shipping and fulfillment processes, including order tracking, shipping label generation, and shipment tracking. This helps to ensure that orders are delivered on time and with the right shipping methods, whether it be purchase orders or sales orders.
5. Customer service: An OMS provides businesses with a 360-degree view of customer orders, which enables them to quickly respond to customer inquiries, track order status, and provide order updates. This helps to improve the overall customer experience and increase customer satisfaction.
6. Analytics and reporting: An OMS provides businesses with real-time data and analytics on their order management performance. This enables businesses to identify areas of improvement and optimize their order management processes to reduce costs and increase profitability.

An OMS provides many benefits to businesses, including increased efficiency, improved accuracy, reduced processing times, and greater visibility into the order fulfillment process. It can also help businesses to reduce errors and costs associated with manual processing and improve customer satisfaction by providing real-time updates on the status of their orders.

As tools and best practices evolve, they often propagate silos, redundancies, and failure points in the supply chain. Modern order management systems connect the fragmented landscape to ensure and order’s fulfillment from the optimal point to the required destination, on-time and in-full delivery, while minimizing costs. As such, order management systems can play a significant role in driving revenue growth, operational efficiency, and customer satisfaction.

With increasing customer demands and shrinking cycle times, businesses need flexibility to choose the best parties to partner with for each and every order to balance service levels and cost. That can’t be done through static modeling and fixed business rules. Order management systems built for multi party orchestration leverage data across orders, inventory, logistics, and transport and use smart business rules to allocate orders from the best possible warehouse or distribution center and always choose the best carriers and routes to deliver the best possible service at the best possible cost.

Dynamic order and inventory management is also beneficial to companies that are considering moving their inventory closer to their customers. Rather than increase inventory through expansion, companies can leverage supplier and partner locations, coupled with real-time order allocation to reduce inventory carrying costs.

Here’s a simple example of a dynamic order process with network:

• A sales order is received with two line items for 25 Widget A’s and 5 Widget B’s.
• Widget A is produced at a higher volume and available for delivery from a local distribution center to the customer; Widget B is slower moving inventory which the local distribution center keeps minimally stocked.
• With a dynamic order process, the order can be fulfilled either using inventory from the local distribution center, a remote location, or a supplier.
• In some cases, the supplier may actually be closer to the customer, in which case, they would directly fulfill all of this customer’s orders for Widget B.

Issues of resiliency are affecting all areas of the supply chain – including inventory. Some order management systems provide holistic visibility across multi-tier suppliers and warehouses, so teams can better understand how to balance demand with supply. Additionally, multi-tier inventory management capabilities offer critical functionalities for inventory balancing and in-depth inventory updates across multiple tiers to reduce duplicate orders and inventory liability, as well as improve order fulfillment and demand matching.

Advanced OMS solutions also use machine learning to draw from wide-ranging data (e.g., data related to inventory, orders, transportation, network partners, grids), as well as external factors, such as the weather forecast, traffic, and currency rates, to help businesses better forecast supply and demand relationships and maintain minimum and maximum inventory levels.

Core inventory management capabilities include:

1. Real-time inventory visibility across multi-tier suppliers and warehouses
2. Inventory tracking and updates, including in-transit inventory
3. Order allocation and reservation
4. Backorder management
5. Returns and exchanges

Multi-flow order management systems can optimize fulfillment across all types of orders – whether sales orders, purchase orders, returns, or transfers. A well-architected order management system should work across inbound and outbound orders, across B2C and B2B orders, across product types, geographies, and different modes of transport.

Inbound purchase order management is supported with real-time data and API integration that can be centralized across partners, eliminating the need to toggle between multiple carrier/forwarder portals and communication channels. An OMS can offer granular views of the order details, drilling down into the shipment order and service orders. Cross-supplier visibility allows businesses to focus on end-to-end flow optimization and ensure continuity of supply.

Core PO management capabilities include:

• PO transmission and acknowledgement with Supplier
• PO modifications and updates; exceptions management
• Supplier collaboration
• Transport planning and execution of supplier shipments
• Receipt and confirmation
• Supplier performance management

Businesses requiring support across import and export will need to seek a solution that can see across and support all geographic areas and regions. Not all OMS solutions are global, but some of those that are can support all aspects of international flows, including multiple languages, currencies, and types of documentation.

Omnichannel fulfillment can be difficult to optimize because of the sheer magnitude and complexity of all the factors at play including service levels, sourcing, sales channels, and so on. Companies, as part of multi-party networks, operate in a fragmented systems landscape where traditional data flows are disconnected. Moreover, omnichannel fulfillment processes are not linear, they are dynamic.

An OMS that supports omnichannel fulfillment will:

• Manage the full order lifecycle
• Integrate and connect with marketplace systems, such as Shopify
• Enable flexible, a configurable order flows to optimize e-fulfillment
• Continuously optimize, re-planning fulfillment routings or process flows as needed
• Capture every cost at every touchpoint around every entity
• Help simplify operations through automated and optimized flows

Today’s challenge is not only managing high customer demands across multiple channels but doing so amid disruption and ensuring a smooth supply of product from global suppliers. Kinaxis provides intelligent order planning and execution using smart business rules that factor constraints, requirements, and service levels for all types of orders including purchase, sales, eCommerce, and returns.

The Kinaxis OMS supports omni-channel orders and optimizes all customer and purchase orders for agile global operations using key capabilities:

1. Intelligent order planning
2. Integrated data lakehouse and BI solution
3. Order orchestration
4. Global Available to Promise (GATP)
5. Multi-tier inventory visibility, order-inventory tracking - Lot/Serial # Tracking
6. Replenishment inventory planning
7. Optimal inventory allocation/sourcing
8. Purchase order management
9. End to End order lifecycle management