When a customer clicks the “buy” button, as a business, your work begins. Once you receive the order, you must pull the product, prepare it for shipping, and get it mailed out to your customer. While this may seem like a simple task at first, as your business grows, inventory expands, and sales dramatically increase, this process can become overwhelming.
How do you manage inventory?
How do you keep track of all the orders as they come in?
An order management system helps you maintain structure within your order process. When integrated with a quality customer relationship management (CRM) platform, it allows you to bring together your front and back offices, helping to enhance the customer experience and boost revenue.
What is order management?
Order management refers to the steps necessary to take a product from purchase to delivery. This includes order availability, order receiving, the picking of the products, packaging of products, shipment, and delivery. As your business grows, it is necessary to closely manage this order process in order to help ensure everything is accurate and your customer has a satisfying experience.
What is an order management system?
An order management system allows you to streamline and automate your ordering process and allows a business to manage all your customer orders in one central location. An order management system allows a business to manage orders, customer information, order fulfillment, inventory management, payment processing, invoicing, and shipment tracking. For the customer, an order management system offers complete transparency when it comes to their order status, allowing them to track and see where their order is in the fulfillment process.
What is order processing?
Order processing begins once the customer places an order and ends once the ordered products are shipped. Everything from inventory management, products picking, packaging, and shipping fall under this process. For small businesses, order processing happens in-house. However, as your business grows, your order processing is likely to move into one of three main processing options: warehouse fulfillment, dropshipping, and third-party fulfillment.
Warehouse fulfillment center
With a warehouse fulfillment center, a business manages its inventory and fulfillment center with in-house employees that process orders and maintain inventory. They are responsible for the picking, packaging, and shipping of the products once an order is received.
Dropshipping
Dropshipping fulfillment allows your business to maintain little to no inventory. When your business makes a sale, your business purchases the item from a third-party supplier, and they ship it directly to the customer. This means you do not handle the product directly and are not responsible for the supply chain management.
Third-party fulfillment
A third-party fulfillment is an outsourced fulfillment company that stores merchandise and maintains inventory control for another business. When orders are received, they pick, package, and ship the orders for your business.
Importance of an order management system (OMS)
As a new business, order management may seem unnecessary. You can keep track of your inventory and packing up products and shipping is easy. But as your business grows and thousands of orders are coming in every day, simple management will be impossible, and you are likely to miss orders or not have the inventory necessary to fulfill orders. An order management system helps to ensure that your order process is accurate, and your customers receive their items as ordered. Here are some ways that an order management system can really make a difference.
Properly maintain stock
Inventory management within your OMS allows you to track your inventory. This allows you to see which products are not selling and help eliminate overstock. In addition, you can also see which products are running low and allow you to restock before you lose an order to under-stocking.
Avoid fulfillment mistakes
An order management system helps to streamline your entire order process from order placement to shipment. This automated process helps reduce the occurrence of order fulfillment mistakes with wrong products, wrong addresses, and delayed shipments that can affect the reputation of your business.
Reliable information
OMS reporting allows you to see every part of the order process in one place, at one time. This allows you to easily analyze your business and identify potential problems and possible solutions. For example, if all your orders seem to come from the West coast and your fulfillment center is on the East coast, it may be beneficial and cost-effective to consider a west coast fulfillment location.
Save time
Order fulfillment is a complex process that takes time, especially when the orders really start coming in. Using an OMS allows you to streamline and automate that process, leaving more time to focus on customers, marketing, and continuing to grow your business.
The order management cycle
The order management cycle is all the steps involved in the order process from the time a customer places an order to evaluate your performance. Here we look closer at each stage of the order management cycle.
1) Order placed
When an order is placed by the customer through your e-commerce site, the OMS receives all the relevant order information, such as customer name, payment information, products ordered, shipping details, and delivery address.
2) Order received
When the OMS receives the order, the relevant information is passed on to your fulfillment center. This can include your business warehouse, a dropshipping company, or a third-party fulfillment center. This can be different based on products ordered and the OMS is able to determine which facility to send the information to. For example, if you manage certain products in-house and others through a dropshipping facility, the OMS will send the relevant information to each location.
3) Order is picked
At this point, a packing list of products is generated, and the purchased products are taken out of your available inventory, helping to manage available inventory. The pickers take the packing list and pull the products for shipment.
4) Order is packaged
Once all the products are selected, they are packaged. A shipping label is generated, and they are ready for shipment.
5) Order is shipped
Once packaging is complete, the package is picked up by the shipping carrier and sent for shipment. Tracking information is added to the OMS so you can manage the shipping process.
6) Items delivered
The carrier takes the package and delivers it to the customer. With an OMS, you can feel confident that they are receiving the right items and the delivery is on time.
7) Assessment
While problems can happen, such as a picker pulling the wrong product or shipping problems occurring with the carrier, it is essential that you follow up with your customers to see how you are doing. This follow-up allows you to monitor for recurring problems and make changes as necessary. An integrated CRM can help you maintain this quality correspondence with your customers.
Features of an effective OMS
What makes an effective OMS and what features are important? What your system offers can make the difference in whether your customer completes a transaction and becomes a loyal customer or chooses your competition. Here we take a closer look at some of the aspects of a good OMS for your business.
- Visibility: A good OMS gives you the ability to view the entire supply chain from order placement to delivery, all in one location.
- Real-time inventory: Management of your available inventory is essential when it comes to e-commerce. The last thing you want is for a customer to place an order only to receive an email hours later that the product they ordered is no longer in stock. A good OMS will maintain accurate inventory information.
- Delivery and service scheduling: This option allows for different shipping options, such as overnight, two-day, ground, or even the option to combine products that come from multiple locations into one main order. This also provides them with a delivery date so they can immediately see when they can expect their order.
- Customer engagement technologies: These options allow the customer to view the status of their order, as well as receive automatic email or text updates on the fulfillment of their order. This can also include automated return processing options that allow for them to print out return labels and provide shipping information.
How can a CRM help?
You see the benefits of a good OMS, but what about your direct connection and relationship building with your customers? While the OMS tracks orders and inventory, a customer relationship management (CRM) system keeps track of your customers and all your connections to them. It makes sense to integrate the two together. Here you can see all a customer’s information, as well as track products they like, allowing you to target marketing directly to their needs. Some additional benefits of an integrated CRM can include the following:
Build better relationships
The purpose of a CRM is to help you sell more effectively and work to build an informed relationship with your existing clients. They allow you to maintain regular customer contact and, when integrated with an OMS, you can gain better insight into your customers’ needs.
Up-sell and cross-sell
When your OMS and CRM work together, you can use their purchase history to recommend additional products to complement what they have already purchased or suggest a better product with more features than one they have purchased in the past.
Targeted campaigns
When you know what your customers are purchasing and where their interests are, you can better target your marketing campaigns to meet your customer’s needs.
Watch your insurance agency grow with OMS and CRM
By adding a quality OMS and integrated CRM, you can easily manage orders and work to better meet the needs of your customers. To learn more about how CRM automation can truly make a difference for your insurance business, schedule a call with Better Agency today.