Many companies present e-commerce customers with an attractive Web design and then assume that what goes on behind the scenes to fulfill their orders will go largely unnoticed.
And it will, if everything behind the scenes works as it should. But what if it doesn't? That's when customers notice. Glitches in back-end fulfillment and supply chain management systems can mean that customers wind up with the wrong product, an incomplete or late order, or experience some other problem that alienates them from you and tarnishes your company's reputation.
The growing use of e-commerce has made the gap between customer-facing processes and supply chain processes painfully evident.
Order management systems can help close this gap. While they were originally designed for manufacturing companies that employ a linear process for taking and fulfilling customer orders, order management systems today must be much more flexible to meet the demands of e-business.
Complete order management systems--from the likes of i2, Manugistics, Oracle, SAP, SPS Commerce, Yantra, and others--handle orders through four key phases: capture, management, fulfillment, and reverse logistics.
Order capture gives customers all the information they need to make a purchase, then lets them enter the information needed to fulfill and settle the order. At this stage, customers need information about products, quantities, prices, configurations, availability, warranties, return policies, and shipping. The capture process for B2B transactions is particularly complex because it can involve proposals, quotes, detailed product specifications, contracts, negotiations, and specialized billing and payment requirements.
In the management phase, the order management system routes and processes orders according to pre-established rules to ensure that orders are handled efficiently.
During the fulfillment phase, products are pulled from inventory (or, in the case of build-to-order products, manufactured) packed, shipped, tracked, and, if necessary, scheduled for installation.
In the reverse-logistics phase, problems that crop up after the ordinary fulfillment process are handled. These could include delivery mistakes, product mismatches, defects, returns, replacements, repairs, refurbishments, and billing adjustments.
You can judge the readiness of your company's order management system by making sure it meets four criteria:
1. Accept multiple order formats. Make sure your order management system can handle orders in a variety of formats. It's not uncommon for a single enterprise to receive orders via phone, fax, e-mail, EDI, XML, and applications from vendors such as Oracle, SAP, and others. The order management system must be able to interpret these orders and then standardize the information for the enterprise's inventory and shipping systems.
2. Provide customers with complete fulfillment information. You lose sales when customers can't figure out if you have enough inventory to fill their order or when they'll receive it. Once they've placed an order, customers should also be able to find out where the order is in the pipeline and how long it will be before delivery.
3. Handle orders across multiple channels. If your enterprise sells through multiple channels, make sure it can handle orders from all the channels your company uses while providing cross-channel visibility and functionality. Maintaining different order management systems to handle orders coming in via phone, Web, mail, or in physical stores is inefficient and expensive. It not only means buying and maintaining multiple IT systems, but it can also require maintaining separate inventories to ensure adequate stock for each channel. Furthermore, a growing number of customers use multiple channels to buy products from the same merchant. A customer who orders a product from your Web site may want to pick it up from one of your local retail stores or return it to the store or by mail.
4. Manage outsourced operations. Enterprises are increasingly turning to outsourcers to reduce costs and to focus on their core competencies. Your system should be able to track and process orders across all phases of operations--including outsourced sales centers, warehouses, logistics providers, and customer service call centers.
It's unlikely that any order management system can provide all the capabilities you'll need out of the box. For companies that work with several order formats, channels, and outsourcing partners, Chris Shaw, vice president of IT at third-party fulfillment provider Innotrac, recommends looking for an order management system that meets 85 percent of their requirements and using J2EE and other Web services standards to custom-develop applications that handle the remaining 15 percent.
When all is said and done, a good order management system can be fulfilling for both you and your customers. They won't know it, but you will--and that's how it should be.
What capabilities do you think order management systems should have to meet the needs of e-commerce? E-mail Adrian or TalkBack below.
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