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Order Management System: What exactly is an OMS?

In modern order fulfillment, the demand for an order management system is unparalleled. Prior to the rise of e-commerce, orders were handled through faxes and direct mail. However, the growth of e-commerce and Big Box retailers required systems that could streamline the entire process, getting more orders processed with fewer delays.
As customers grew to demand greater seamlessness between online, brick-and-mortar sales and every channel in between, the modern order management system (OMS) was born. However, many companies, especially small to medium-sized businesses may not understand what an OMS does, how it benefits the company and why it is essential to success in today’s world. So, let’s take a stroll through the broad and specific definitions of an OMS.

  1. What Does an Order Management System Really Do?

An OMS helps companies organize and streamline the order fulfillment process across the omnichannel supply chain. This means order processing, call center management, customer service, inventory and warehouse management, marketing and accounting processes are combined into one resource. This level of integration brings all disparate systems together, creating a flexible, continuing system that helps companies compete with the Big Box giants of the industry.

  1. How Does an OMS Function?

This system is much more than just an emailed order form. When a customer shops, information gathered from that customer during checkout and while shopping, especially when using online or in-store apps, is gathered and analyzed.

For example, customers using apps or online sites for shopping may trigger notifications in the OMS when the customer places an item in the online shopping cart. This is start of the entire process. It shows retailers that customers are interested in products A, B and C. When the order is placed, a corresponding set of actions occurs within the system, triggering a pick ticket, carrier selection and more. Now, think about what it means for the omnichannel sales experience.

  1. Why Is an OMS Essential to Omnichannel Sales?

Consider the possible ways information in the aforementioned example plays into the omnichannel supply chain. Information is gathered for marketing purposes. Items may be reordered from suppliers, and shipments begin. Even the notifications for order status are part of this process. Now, think about how omnichannel sales are more complicated than traditional sales.

Omnichannel sales strategies must think about having every product, every time and available across all channels. Customers may shop online, pick up in store or ship to home, as well as every imagination combination in between. As a result, retailers and warehouse managers need a system that can track all this information and keep the most important details, like price points, inventory demand and abandoned carts, relevant to consumers and the business.

For example, an abandoned cart might indicate customers’ dislike of available shipping options.

Fortunately, an OMS gives companies several benefits that are essential to omnichannel sales, which include the following:

  • The ability to manage, allocate and execute orders across all assets.
  • Complete all necessary compliance paperwork and retain documentation.
  • Monitor real-time order status, inventory and demand on your company.
  • Track and report product cycles and changes in demand.
  • Utilize real-time reporting of order-impacting factors, like bad weather, to ensure customers get the products they want on-time.
  • Complete logistics processes, like freight auditing, freight classification, carrier selection, billing and payment completion.
  • Finalize internal accounting processes, like ACH transfers, completed transactions and utilization of coupon codes.

The Big Picture.

The OMS is the one-stop tool for reducing errors, delays and overhead costs associated with managing product flows in an increasingly omnichannel-driven world. By understanding what an OMS is and why it promotes seamless omnichannel supply chains, you can empower your company to compete in the digital and brick-and-mortar commerce environments.