Transforming Retail Enterprise: An In-Depth Look at OMS (Part 2)
Exploring the Functional Capabilities of an Order Management System (OMS)
This blog is in contunuation of my 3 part series on OMS.
Here are the links to the other parts of the series.
An Order Management System (OMS) in a retail enterprise is more than just a mechanism for capturing and processing orders. It serves as a multifunctional hub that touches nearly every aspect of the retail operation, boasting a broad set of functional capabilities. Let’s explore these capabilities in detail.
Order Capture Integration
The ability to capture orders from multiple channels — online, mobile apps, physical stores — is crucial for omni-channel retailing. The OMS should be able to integrate seamlessly with various customer touchpoints to provide a unified shopping experience. This includes real-time inventory checks and immediate order validation.
Store Fulfillment
The OMS often includes functionality for Multi channel fulfillments including store-based fulfillment options such as ‘Buy Online, Pick Up In-Store’ (BOPIS) or ‘Ship from Store.’ These features provide flexibility in how orders are fulfilled, enabling better inventory utilization and improved customer satisfaction.
Operational UI
An intuitive and user-friendly Operational User Interface (UI) is crucial for managing complex order workflows. This includes dashboards for real-time monitoring, tools for manual order adjustments, and capabilities for customer service representatives to assist with issues like order modifications or cancellations.
Order Orchestration
One of the core functions of an OMS is order orchestration, which involves routing each order to the optimal fulfillment center based on factors like proximity, inventory availability, and shipping costs. The system needs to coordinate between various entities such as warehouses, suppliers, and logistics providers to ensure efficient order completion. OMS system would be able to split and merge the orders and track their shipments or WorkOrders. It also takes care of reservations for orders , transfers and order consolidations.
Advanced Order management systems also have subscriptions and digital products.
Order Routing
Order routing is the process by which a retail enterprise determines how to fulfill customer orders in the most efficient, cost-effective, and timely manner. This process becomes especially complex for enterprises that have multiple distribution centers, warehouses, or stores. Here are some of the commen routing options offered by OMS system grouped by the type of strategy.
Monitoring
Continuous monitoring allows for real-time visibility into the status of orders, inventory levels, and fulfillment processes. This is key for identifying bottlenecks, ensuring SLA compliance, and providing customers with accurate information on order statuses. Reports and Matrics can bebuilt on top of the OMS system’s data to drive furtehr efficiencies in the fulfilment process and drive better customer expericnce.
Fulfillment
Fulfillment capabilities ensure that the products are picked, packed, and shipped efficiently. The OMS must integrate with Warehouse Management Systems (WMS) for real-time updates on inventory and order statuses, thus enabling dynamic adjustments to fulfillment strategies. OMS systems supports multi channel fulfillment capabilities to fulfil an order either in whole or part through various fulfilment channels like Warehouses ( DTC), Dropship ,3PL , Ship from Stores,BOPIS etc.
Returns Processing
An advanced OMS will have a streamlined returns management process that handles all aspects, from receiving the returned item to updating the inventory and processing refunds. The system should make this process as frictionless as possible for the customer, while still allowing for quality checks and fraud prevention. It should also take care of exchanges and appeasements.
Payment Integration
Seamless payment gateway integrations are necessary for capturing payments, processing refunds, and managing other financial transactions. The system must comply with security standards like PCI DSS and offer a variety of payment options to cater to different customer preferences. With the explosion of the payment options these OMS system should be flexible enough to extent their payment processing pipeline to handle options like syncronous payments , asyncronous payments , delayed capture , scheduled capture etc.
Marketing & Promotions
The OMS often integrates with marketing systems to offer real-time promotions, discounts, and personalized recommendations based on customer behavior and purchase history. This is critical for boosting sales and enhancing customer loyalty.
Subscriptions
For businesses that offer subscription-based products or services, the OMS should be capable of managing recurring orders, payments, and renewals. This includes features like automated billing, subscription level adjustments, and retention strategies.
Visibility of Available to Sell Inventory
One of the most critical functional capabilities of an OMS is to provide real-time visibility into the ‘Available to Sell’ inventory across all channels and locations. This helps in making informed decisions about stock allocation, reorders, and fulfillment routing, thus optimizing inventory levels and reducing carrying costs.
Conclusion
The functional capabilities of an Order Management System go well beyond simple order capture and fulfillment. From providing a unified shopping experience across multiple channels to offering real-time inventory visibility and efficient returns processing, a modern OMS is a multifaceted tool that enhances both operational efficiency and customer satisfaction. Understanding these functional capabilities is essential for any retail enterprise aiming to stay competitive in today’s complex and fast-paced market.
