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What Is Order Management?

Order management is the process of order capturing, tracking, and fulfilling customer orders. The order management process begins when an order is placed and ends when the customer receives their package.

An order management system (OMS) is a computer software system used in several industries for order entry and processing. A perfect order means fulfilling a sales order to the customer’s specifications, delivering goods as promised at the time of sale.

What is order fulfillment?

Srixon/Cleveland Golf Increases On-Time Shipments with SCM (1:32)

Order fulfillment is how companies complete a sale order, and it’s at the heart of every business. Companies generate revenue by selling products and services to businesses or directly to consumers. Whether you’re B2B or B2C, the sale is not complete until the sold items are received by the customer. Here is an example, watch how Cleveland Golf sees 81.5% increase in on-time shipments with Order Management.

The order fulfillment process takes place in distribution centers, factories, or stores. It typically involves inventory management, supply chain management, order processing, quality control, and customer service systems that can report problems or make product exchanges or returns.

Why is omnichannel order management important?

In omnichannel commerce, customers have many options to buy. Whether it's online, physical stores, or direct sellers, customers want an effortless experience that allows them to place orders and process returns as quickly as possible. Customers are more informed and hold more power than ever. Omnichannel order management is key to customer satisfaction, your company's profits, and brand reputation. To serve customers in a way they desire to buy, you must deliver a seamless and convenient customer experience. Which is why it is a critical business priority for B2B and B2C companies to simplify the process of order capture, order configuration, inventory visibility, scheduled fulfillment, and shipping and return options. The goal is for your customers to receive orders—on time and in full—for the lowest possible cost.

Traditional order management systems (OMS)—which were designed long before omnichannel commerce existed—could not keep up to support multiple channels, fulfillment methods, locations, and return points. Instead, they operate in silos, connecting only a single channel to a single inventory source. Without inventory visibility throughout the supply chain, merchants don't know how much inventory is available and where it is located, making it difficult for them to keep delivery promises or route orders to optimal fulfillment locations.

How can companies optimize the order fulfillment process?

To overcome these challenges, companies can either integrate their disparate systems and data sources, which can be expensive and inefficient, or adopt a modern order management solution to:

1. Streamline order orchestration and fulfillment processes

Fusion Order Management is designed to improve order capture and fulfillment execution across the order-to-cash process. It serves as a central order hub for multichannel and omnichannel environments. The application streamlines the process of capturing, pricing, and configuring orders. Orders received from external sources can also be modified and processed for fulfillment. It provides prebuilt integrations with other cloud services, centrally managed orchestration policies, global availability, and fulfillment monitoring.

2. Integrate for a complete order-to-cash process

Fusion Cloud Order Management is preintegrated with other Cloud services including Product Hub, Logistics, Manufacturing, Procurement, Finance, and CPQ to enable a set of advanced fulfillment processes for configure-to-order, drop-ship fulfillment by suppliers and partners, back-to-back fulfillment orchestration, internal transfers, and quote-to-cash. It also provides a set of capabilities to integrate with other cloud and on-premises applications that are needed for a complete order-to-cash process.

3. Centralize price management and product configurations

Cloud Order Management lets you capture and revise orders with simple SKUs, configured items, and services. The application provides user-configurable business rules that default order values, such as customer bill/ship to information and pricing policies. It offers real-time product availability information and validates the order prior to fulfillment. Centralized pricing capability executes discounting rules, pricing segmentation, tiered pricing, tax calculation, recurrent pricing for services, and manual price adjustments. Configurator is integrated with pricing that provides capabilities to create, test, and deploy configuration models, including rules/constraint definitions and runtime UIs.

4. Optimize order promising

With Global Order Promising (PDF) capability enables users to make optimal product availability commitments, taking advantage of available supply sources to increase revenues while boosting customer satisfaction, and reducing fulfillment costs. Cloud Global Order Promising selects the best available inventory options for customers and merchants by collecting supply information and applying user-definable sourcing and promising rules. Users can set up promising rules that are lead-time based, available to promise, capable to promise, and profitable to promise. Users can also set up allocation rules by demand class to ensure scarce supply is prioritized for important accounts.

Another order promising capability is to help manage supply and demand jeopardy conditions during order processing. It allows users to view exceptions, order details, alternative sourcing options, and perform what-if simulations using embedded analytics. It helps users to make tradeoff decisions between service levels and costs, or between competing customer orders. Global Order Promising’s advanced, memory-resident architecture ensures the order promising capability is highly responsive, available 24/7—even as its transaction and reference data are being refreshed.

The benefits of a distributed order management system.

Distributed Order Management is an application that enables organizations to accurately and efficiently manage customer orders across multiple order capture and fulfillment systems. It is designed to orchestrate orders across a distributed omnichannel environment including many silo legacy systems. It enables you to accurately and efficiently manage customer orders across multiple channels and determine the best inventory stocking location or production facility where the order will be filled and shipped.

Cloud Order Management serves as a single repository of information. It consolidates customer information and acts as the central hub for order information across all touchpoints, including online, points of sales, and field sales staff. It also leverages real-time visibility into inventory availability, automatically aggregates items across locations, and sends them to the optimal shipping point to complete the order and deliver on time.

When demand surges, Cloud Order Management easily captures large volumes of orders from different channels (online, retail stores, call center, etc.), manages product configurations and pricing, fulfills orders from the best sources, and ensures on-time delivery.

Cloud Order Management's order capturing capability allows orders to be entered directly, imported from external systems, and then modified. It performs order information validation for data completeness and business rule compliance, including trade compliance checks. Order fulfillment capability then orchestrates the orders across multiple capture systems, receiving fulfillment status updates, and reports status updates back to the capture systems. Cloud Order Management orchestrates orders on top of a mixture of cloud or on-premises order capture and fulfillment systems/applications. It serves as an order hub across the order-to-cash processes to centralize managing ordering, fulfillment, policies, and exceptions.

Manage order exceptions effectively

Cloud Order Management allows users to search for orders, view statuses, see a summary of exceptions by customer, product, or supplier, and deep dive into additional details. Jeopardy alerts proactively identify orders at risk to meet promise dates, which helps merchants identify issues in time to take corrective actions. The embedded analytics and what-if analysis provide users with insights to make the best possible decision.

Execute against predictable order orchestration policies

The unique application architecture unifies the processes across multiple order sources and diverse fulfillment modes. Using a robust set of prebuilt application capabilities, business users can define, implement, and maintain their own fulfillment orchestration policies without relying on technical programming. The scalable and flexible cloud solution enables businesses to develop, implement, and adjust policies as needed, resulting in faster deployments and reduced costs. For example, when an order fulfillment process involves schedule/ship/bill steps, and the customer changes order during shipping, the order logic will cancel the original shipping request and go back to the scheduling process. Approval workflows ensure that order creation and changes meet policies. And when an order is processed, users can define the length each step would take. So when order promise dates to customers may be delayed, proactive alerts are created.

Channel revenue management

To expand market share and stay competitive, manufacturers and suppliers often offer pricing rebates to customers to promote specific products and drive revenue through distribution channels. These rebate programs managed by wholesale distributors are often complex. If distributors failed to effectively manage their supplier programs and process rebate claims, they could lose profit margins due to unclaimed rebate revenue and missed sales.

Channel Revenue Management, a component of Order Management in Supply Chain Management, enables wholesale distribution companies to define promotional programs and rebates, and effectively manage claims processing and accounting against supplier ship and debit agreements. Wholesale distributors secure better profit margins and spend less time on program management as Channel Revenue Management streamlines the process of managing supplier rebate programs. Distributors deploying channel revenue management also experience a greater level of trust from their supply chain partners due to the confidence in the trade program execution and fewer rebate claim disputes. Perhaps equally valuable: Time-saving automation is lifting the burden of manual trade program administration and giving managers more capacity to tackle higher-value tasks.

Where to start? Position for growth.

1. Place customers at the center. Unify customer buying channels for optimal customer experience. Invest in integrated order management into your end to end logistics.

2. Identify bottlenecks and manual processes in your order orchestration and fulfillment. Adopt digital technologies and tools to empower your employees.

3. Conduct an inventory survey of your existing systems and applications. Map your technology requirements to your business objectives. Consider a solution that allows you to replace one system at a time, instead of replacing all systems at once.