What Is an Order Management System?

6 min read
January 27, 2023

In the modern e-commerce world, businesses must learn to continuously adapt to new technologies to improve their order fulfillment process and enhance their customer service capabilities. From the moment a customer places an order to the moment they receive it, it's important for your company to be able to track and monitor every step of the process. Without this visibility, orders can get lost and delayed without any communication across your supply chain or to the customer.

With an order management system (OMS), e-commerce businesses can spend more time keeping customers engaged and reducing manual tasks associated with picking, packing, shipping, and tracking orders and inventory. Below, we'll discuss some FAQs about order management systems and how your company could benefit from this solution.

6 Common Problems in Order Management

As an e-commerce business, there are dozens of tasks you must complete to maintain your inventory, ensure every order is completed properly, and uphold customer satisfaction ratings. Here are the six most common problems you likely deal with in the order management process:

  1. Improperly filled orders: Inaccurately filled orders can happen during the recording, picking, or packing phase and lead to unhappy vendors and customers.
  2. Stockouts: Meeting consumer demand is key in any business. Frequent stockouts, particularly on high-turnover items, can cause you to lose customers.
  3. Time-consuming packaging: Once customers place an order, you must pick the items from your warehouse or shelves and package them promptly to avoid late shipment.
  4. Communication: Clear communication with suppliers, customers, and your own personnel is central to efficient order fulfillment and allows you to minimize delays and lost sales.
  5. Tracking and visibility: If you aren't sure whether your item has been dispatched at the right time or you're unable to locate the order at any stage of the order fulfillment cycle, it can result in confusion, delays, and lost customers.
  6. International orders: Shipping overseas can be more complex because it takes longer and often requires extra costs, fees, and customs standards to meet to avoid your item being sent back.


What Does an Order Management System Do?

Many companies may receive orders from more than one outlet, such as having an in-person store and an online sales outlet. Managing all of these purchases and monitoring inventory levels can be a challenge.

An OMS is a digital way to manage the order lifecycle for your customers. It helps you track orders, sales, inventory, and fulfillment in your eCommerce business. An order management system will also track all the processes and information regarding these ordering steps, including after-sales service.

With an integrated, unified system to track and control all elements of the order fulfillment process, companies can organize orders into clear and manageable tasks.

What Are the Benefits of an Order Management System? 

There are many advantages to choosing the right OMS for your brand. Let's look at some of the fundamental advantages of this software:

  • Automation and analysis: Businesses can improve their tedious back-office processes and tasks with automation. Companies can also use data to highlight sales patterns, track KPIs, and forecast inventory levels for improved decision-making.
  • Reduction of human error: Even the most skilled employee can make a mistake that creates significant order issues. An OMS can handle these tasks to minimize the opportunity for human error that can lead to an unhappy customer.
  • Accurate, real-time reporting: The right OMS will give businesses up-to-date information regarding orders, customers, and inventory. Real-time reporting also allows companies to track customer trends and product performance.
  • Improved customer experience: An OMS empowers customer service agents to provide more accurate order details, faster response times, and correct inventory and stock quantities.
  • Enhanced inventory management: A consolidated view of your inventory empowers you to optimize your inventory levels, minimize excess stock, and meet customer demand, even if your inventory is in multiple locations.
  • Increased visibility: With an OMS, everyone on your team can view and track each order status. Your customers can track their own orders, too.


How Do Order Management Systems Work?

An OMS enables you to access and fulfill all sales from a single login and coordinate the entire fulfillment process. The workflow involved can differ based on a business’s needs, but a typical order management process includes:

  • Bringing in sales from all channels into one platform
  • Syncing inventory in real time
  • Streamlining picking, packing, and warehouse activity
  • Providing one place for your customer service team to complete returns and update returned stock back into warehouse inventory

What Are Common Features in an Order Management System?

Though every OMS may have some unique elements for certain industries, many of them contain the same essential features and solutions to support the order management process. Here are some tasks your OMS should do for you:

  • Sales channels: Consolidate information from all points of sales.
  • Sales support: Allow customers to receive updated availability and product information and support for returns and exchanges.
  • Inventory management: Provide a consolidated view of inventory and algorithms that route orders and identify the best shipping options.
  • Customer database: Get access to customer information, activity, and previous orders to provide tailored service.
  • Visibility: View the entire supply chain, anticipate problems, and develop more efficient processes.
  • Accounting integration: Combine data from OMS into your accounting system to eliminate the need for transferring or reentering information.
  • Real-time inventory: See what's in stock or in transit and view current demand levels.
  • Delivery and service scheduling: Match delivery commitments to skills, inventory, and resources.
  • Fulfillment optimization: Analyze data and recommend options for how and where customers want orders shipped, cost and time-to-delivery.

Do You Need an Order Management System?

If you're wondering whether an OMS is for you, consider where your e-commerce business falls under the following types of companies:

  • Omnichannel businesses
  • Businesses with multiple locations or warehouses
  • Businesses looking to upgrade their current systems

An OMS is ideal for these businesses and others that receive a high volume of orders frequently, especially if they're coming in through different channels. Using traditional processing methods can make it difficult to manage these orders and keep customers happy.

Fortunately, an OMS provides task automation to reduce errors and data security loss. With a simple internet connection, your entire team can access your OMS from any location and enhance your customer service capabilities.


How to Choose the Right Order Management System

Because an OMS helps you manage the entire order lifecycle, it's critical to know how to choose the right OMS to meet your company's needs. Follow these steps to help determine which OMS is right for you:

  • Assess your current business needs: What are your company's current and future requirements, expectations, and plans for growth?
  • Define goals and objectives: Involve everyone in your supply chain, including team members, distributors, and suppliers to determine your most important goals.
  • Consider functionality: Decide which features your OMS needs to help you provide better service to customers.
  • Plan to integrate your systems and data: Consider connectivity to other systems and how an OMS would integrate with your existing processes to reduce manual input and errors.
  • Choose on-premises or cloud-based: While an on-premises OMS is ideal for companies that want to host and manage their own systems, a cloud-based OMS allows companies to focus on other business tasks without having to install software or hardware.
  • Evaluate and compare your options: Once you determine the needs above, research various vendors and compare their offerings to find the best possible OMS option.

Why You Should Choose Osa as Your Order Management System

With so many options, features, and integrations, choosing the right order management system can be tricky. At Osa, we make the choice easy for you by offering a cloud-based AI solution to ensure efficient warehouse operations, customer satisfaction, and faster growth. By optimizing your supply chain management processes from end to end with our Unified Commerce Platform, you can enhance your production to meet consumer demand and access the visibility you need to make better decisions.

We can integrate with any of your existing systems to connect your supply chain. To learn more about how Osa can help you prioritize the customer journey, contact us today to book a demo.







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