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Every company that sells goods operates a complex order management system. This is necessary to ensure that the goods reach the buyer as ordered.
In times of digitalization, companies are faced with the challenge of simplifying and automating the ordering process. Without a digital order management system, numerous problems can arise: Manual processes are not only error-prone and time-consuming, but also costly. There are delays in order processing and delivery, which reduces customer satisfaction and has a negative impact on sales growth.
In this article, we explain the key principles of order management. Based on use cases, we show how you can make business processes more efficient with the help of automation tools.
What is order management?
When a buyer orders a product, a series of chain reactions are triggered upon check-out to ensure that the order reaches the buyer quickly and undamaged. These steps in the chain reaction are referred to as order management. It involves the process from the acceptance of customer orders to logistics and delivery to the customer.
Effective order management optimizes these processes by using automation to minimize errors, shorten processing times and improve customer satisfaction.
What is an order management system?
An order management system (OMS) is a software solution that is used to control and monitor the entire order processing flow in a company. From order entry, inventory management and order fulfillment to delivery and payment processing, order management software integrates all relevant steps into one central system.
EAn OMS enables companies to process orders efficiently, monitor inventory levels in real time, coordinate communication between sales, warehouse and delivery, and improve customer satisfaction through fast and accurate deliveries.
This also makes it easier for companies to grow, as they can respond better to changes in customer demand. In addition, an integrated OMS improves transparency across different departments, which leads to faster decisions and a stronger competitive advantage.
Who are order management systems and software suitable for?
Order management systems are suitable for a wide range of industries, especially where efficient ordering and delivery processes are critical to business success. From retail and e-commerce to wholesale, manufacturing and even healthcare, an effective OMS improves order fulfillment efficiency, inventory management accuracy and customer satisfaction.
Retailers, for example, use order management software to control the flow of goods or synchronize orders across multiple channels. Order management systems are also relevant in the banking and financial services sector, as they manage customer transactions more efficiently and therefore improve customer service.
Order management processes: The procedure
What happens after the buyer has placed an order? In the following, we take a closer look at the five most important components for an effective order management process.
Step 1: Order entry
The process begins when a customer places an order. This can be placed via various channels such as the online store, by email, by phone or in person. The order is then entered and created in the ERP system with all relevant order information.
Step 2: Stock check and order confirmation
Immediately after the order is entered, the stock level is checked to ensure that the desired products are available. If this is the case, the order is confirmed and the confirmation is sent to the customer.
Step 3: Order fulfillment
Confirmed orders are sent internally to the accounting department for processing, booked and logged. Depending on the process, the customer may already be invoiced at this point. The products are also prepared and packaged in this step.
Step 4: Shipping and tracking
The appropriate shipping service provider is then selected. The shipment can be viewed via tracking systems to monitor the delivery status at all times.
Step 5: Delivery
Delivery is punctual and the ordered goods reach the customer undamaged.
Step 6: Invoicing
After receipt of the goods and if not already covered in the third step, the invoice is issued and the payment collection process begins.
Step 7: Customer service
In the final step of the order management process, the customer can contact customer service if necessary, whether for questions about the order or to return defective or unwanted products.
Challenges in the order management process
The more steps and contact points there are within order management, the more error-prone individual processes can become.
Manual order administration
Inaccuracies can occur, especially during manual order administration, for example when entering customer data or product information. Such manual interventions lead to errors such as incorrectly selected products or incorrectly typed customer data, which delays the entire delivery process and causes additional costs.
Lack of automation
Another problem is the inconsistency and inefficiency caused by the lack of integrated automation solutions. An automated system can check and validate inputs immediately, detect errors quickly and correct them. Without this integration, errors propagate throughout the process. This causes internal delays, unnecessarily ties up many of the already scarce human resources and affects customer satisfaction due to incorrect deliveries.
Transparency in inventory management
Added to this is the need for transparency: employees need an overview of current stock levels at all times. This becomes difficult when there are several physical locations. As a result, stock shortages can occur and lead to incorrect orders if products are displayed as available that are not actually in stock. After all, customers should not only be informed about a lack of availability when they complete their order.
Multiple physical locations
Those who store goods at multiple locations or run physical stores also need to consider different delivery and shipping options in order to get the goods to the buyer as quickly as possible. Inefficient order management processes, for example due to incorrect system configurations, result in delayed shipping processes, which can ultimately have a negative impact on customer satisfaction and loyalty.
Lack of integration options
System integration also plays an important role: insufficient integration of ERP (Enterprise Resource Planning) systems and other applications can significantly impair efficiency. A lack of integration often leads to loss of information and data inconsistencies, which can disrupt order processing and customer communication.
Challenges such as manual errors, lack of transparency and integration as well as delayed delivery times require constant monitoring and optimization of processes. Investing in software products for smooth order management is an important step in overcoming complexities and bringing efficiency to business processes.
Important components of an effective order management process
WWhich components are therefore relevant for companies to master the above-mentioned challenges? Your order management system should include the following five aspects:
1. Real-time inventory
Are products still in stock and actually available? Real-time inventory ensures that all orders are effectively fulfilled. It also enables an immediate response to stock changes and fluctuations in demand.
2. Delivery planning
Reliable delivery schedules and partnerships with logistics service providers are necessary to guarantee fast and reliable deliveries - so that all customers are happy in the end.
3. Optimized fulfillment process
Inefficiencies in order processing are identified through the continuous analysis of data and processes. This not only helps to reduce costs, but also to increase overall efficiency.
4. Integration of different systems
The interaction of all sales and communication channels ensures a consistent and error-free order management process, from incoming orders to digital invoice verification and delivery.
5. Making customer service more efficient
Automated processes in digital order entry allow customer service to spend more time on face-to-face conversations and less on manual data entry. After all, responsive customer service is critical to handling inquiries effectively. A good OMS should offer features that allow customer concerns to be addressed quickly.
6. Automated document processing
Automated document processing ensures fast and error-free capture, validation and transfer of data from various documents such as orders, order confirmations and invoices directly into the ERP system. Workist, for example, offers advanced AI software that can be easily integrated into existing system landscapes to speed up this process.
Efficient order management with Workist - best practices
Efficient order management requires the use of various software solutions to optimize the entire ordering and delivery process. Important systems include CRM (Customer Relationship Management) for customer management, ERP (Enterprise Resource Planning) for integrating various business processes and inventory management software for monitoring stock levels. Each of these systems plays an important role in controlling and monitoring order management.
Workist's AI-powered software complements these systems, providing automated order entry, order confirmation and invoice processing solutions that improve your order management process.
Automated data entry and validation
Workist processes orders automatically with little effort. The software uses AI to intuitively recognize a variety of documents (e.g. PDF files, Excel, free text emails) and automatically extracts all relevant data - regardless of language or layout. All information from the documents is also validated before it is forwarded to the ERP system. To do this, our AI performs a master data comparison for each document. This intelligent document processing gives your team additional time to focus on customer meetings as well as service and consulting activities. This helps to strengthen and sustain customer relationships.
Effortless integration with ERP systems
As a central interface for all documents, Workist supports the integration of various sales and communication channels. This ensures that all order data is consistent and synchronized across platforms.
Significant time and cost reduction
By automating routine tasks, Workist significantly reduces the time, errors and costs associated with manual data entry. Fast data processing and transfer also ensures that all information is updated promptly and processes are optimized, resulting in faster delivery times.
Overall, you can use Workist to optimize your order processing, increase efficiency and accuracy in data processing and scale your order management processes. If you need support in automating your order entry with AI software, we will be happy to advise you comprehensively on the possibilities offered by Workist.
