Essential Best Practices for Effective Order Management in Supply Chain Management (SCM)

Companies are increasingly becoming customer-centric. From placing an order to finally delivering the order, the whole supply chain management (SCM) is built to enhance customer experiences. An essential part of this endeavor is order management. An effective order management orchestrated process ensures customer expectations are met in the current disruption-prone environment. Yet, only a handful of companies are well-equipped for efficient order management. How can organizations ensure a streamlined order management process for potent supply chain management?

Order management comprises precisely recording customer orders from diverse channels, managing the order processing including inventory verification, ascertaining supplier capabilities, and invoice management. Order processing and fulfillment also involves picking, packing, and shipping processes in addition to tracking the orders and providing visibility to customers on order status, including providing updates on delivery.

Challenges Associated with Order Management

The landscape of order management is very unpredictable. Since the process involves diverse channels and functions, managing everything at once can be overwhelming. Some of the challenges associated with order management include:

• High cost of sales order and fulfillment operations
• Lack of visibility across the end-to-end process
• Inadequate inventory planning
• Inconsistent data management
• Duplication of data and efforts
• Lack of customer support to manage internal and external stakeholder queries

Emerging Trends in Order Management

Some of the emerging trends in order management are:

• E-commerce Integration: Companies are trying to enhance customer experience by seamlessly integrating their orders with e-commerce platforms for efficient transactions.
• Flexible Delivery: To prioritize customer satisfaction, customers are also being offered flexible delivery options and real-time tracking of their consignment tracking.
• AI and Machine Learning: Another trend gaining traction is the use of AI and machine learning for demand forecasting, inventory optimization, and thus enabling customers to offer dynamic pricing.
• Blockchain: Blockchain is also being explored for enhanced transparency and traceability in the supply chain.
• Real-time tracking: While managing orders, it is essential to update the customers by enabling quicker response to changes, real-time tracking, and visibility.

Best Practices for Effective Order Management in SCM

A hurdle in order management directly implies an inefficient SCM. Not only does it impact the business functions,but also it directly affects customer experience. Here are a few best practices that businesses can adopt for optimized order management:

A Single View of Inventory

One of the ways to improve order management is offering customers the right product they need at the right place and their convenience by enabling a single view of inventory across all locations and providing efficient routing logic focused on proximity to the customer’s preferred location. This would help accomplish low serving costs by minimizing delivery and inventory holding costs and increasing labor productivity. Offering omni-channel features to enable the fusion of in-store and online commerce and providing multiple fulfillment options can facilitate customer needs conveniently. These options could also span across warehouse-fulfilled home delivery, store-fulfilled home delivery, boutique pick up, and click-and-collect from the store.

Sticking by Stock Distribution Rules

Defining rules for stock distribution among e-retailers based on the sales history, stock on hand (low availability/high availability), and setting up logical locations based on business requirements can be beneficial while tracking demand and managing inventory accordingly. In addition, implementing safety stock and delta inventory updates across channels can also help manage demand fluctuations.

Building Better Communication Channels

Managing the entire process, including inventory verification, supplier capabilities, payment processing, credit check management, invoicing seamlessly, and coordinating picking, packing, and shipping processes is needed to meet delivery commitments and exceed customer expectations. Providing customers with visibility into order status, including shipping updates and estimated delivery times, helps  improve the overall customer experience.

Final Thoughts

Order management is essentially one of the most important functions as it connects the business directly to the customer and determines how well the business performs and delivers. Effective order management equips organizations with an opportunity to exceed customer expectations, delight them, and enables the business to manage orders efficiently and cater to changing customer demands.