Distributed order management for retailers and E-tailers [Part one]

by | Aug 20, 2019 | Omnichannel, Retailers

By Shravan Talupula, Product Management, Director at Deposco
& Carina Wingel, Marketing Director at Deposco

Part 1: Distributed Order Management for Retailers and E-tailers

In this first installment of a three-part series, we dive into three of the five key distributed order management (DOM) components for retailers. Subsequent installments will focus on DOM components for brands and logistics.

Consumers are shopping with various sales channels and expect a consistent quality experience across those sales channels. Almost 70% of US consumers have used omnichannel services such as “buy online, pick up in-store” (BOPIS).

These complexities create challenges for retailers and direct-to-consumer companies on the order fulfillment side, driving investment in Distributed Order Management (DOM) software to automate and maximize the efficiency and reliability of the order fulfillment process. To meet consumer expectations, DOM provides an omnichannel customer experience and on-time delivery at the lowest possible cost of order fulfillment.

The following figure illustrates the key components of an omnichannel Distributed Order Management system.

Distributed Order Management for Retailers and E-tailers

Omnichannel customer order fulfillment is comprised of all customer journeys, including buy online ship direct, buy online pick up in-store (BOPIS), exchanges, and returns. Offering the convenience of multiple fulfillment options enables businesses to meet consumer expectations.

This also helps to increase basket size with (BOPIS). When a consumer picks up an item in-store, the likelihood of impulse purchases of additional items increases. As many as 85% of consumers admit to making an additional purchase in-store while picking up an online item. BOPIS is only possible when a DOM system (such as the Deposco Bright Suite) is in place.

Event-based order orchestration manages the entire life cycle of a customer order, from order placement to shipment. In addition, it provides a single view of the entire order. For example, a customer orders multiple items, but not all of the items are in stock in the warehouse. Intelligent order routing divides the order so the items in stock can ship directly from the warehouse, while others ship from a retail store, where they are in stock. Once the order is split, event-based order orchestration is initiated to provide visibility and tracking for both of these shipments, which are managed as a single customer order.

Event-based order orchestration also enables management of order exceptions such as a price mismatch or inventory discrepancy. DOM escalates the fulfillment hierarchy to fulfill orders by the planned shipped date.

Enterprise-wide inventory visibility empowers businesses to view, and allocate inventory from multiple sources in their supply chain through one system. This includes distribution centers, brick and mortar stores, and third-party logistics (3PL) providers.

However, a WMS system also offers visibility. The difference with distributed order management is the visibility that appears across all warehouses instead of just one. It also shows all partner drop shippers or 3PL providers. Meaning, you know how much inventory you have everywhere, even the inventory your business allocates to third party providers.

Drop shipping is an actionable fulfillment process because of enterprise-wide visibility. It enables retailers to offer an endless aisle of products without having to maintain inventory directly. Drop shipping sends products straight to the consumer from the manufacturer, distributor, or supplier. Connecting drop shipping providers with an order management system (OMS) through an EDI connection provides inventory visibility into additional fulfillment options.

DOM allows you to compare drop shipping options with each other to determine the best way to fulfill an order. For example, you have an item that can be fulfilled by three different drop ship partners. You can then fulfill the order with the partner who charges the lowest price or the fastest fulfillment time. If an item is in stock at a retail store it may be faster or cheaper to fulfill the order from store.

As a growing business, marketplaces, DCs, and stores can get complicated to connect. An order management system, such as Bright Order, brings strategic decision making, efficient allocations, and cost savings to your operations.

 

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