Table of contents
What is an order management system?
An order management system (OMS) automates order processing for online stores. It’s a crucial tool for you to efficiently handle and track sales orders from order creation to fulfilment. It centralises processes like order processing, managing inventory and coordinating communication between various departments.
By streamlining the entire order lifecycle, from customer purchase to delivery, an OMS enhances your ability to meet customer demands, optimise inventory levels and, ultimately, improve the overall efficiency of your business operations.
How does an order management system work?
In your business, an order management system (OMS) starts by operating as a comprehensive tool to streamline and enhance the efficiency of order processing. When a customer places an order, the OMS captures and consolidates the information, including product details, quantity and customer data.
Next, the OMS verifies inventory levels in real-time, ensuring that the ordered items are in stock. If items are available, the system updates inventory records and triggers the fulfilment process. If items are out of stock, the OMS can automatically alert relevant teams, preventing potential issues like backorders.
Throughout the order lifecycle, the OMS acts as a central hub, facilitating communication between departments such as sales, inventory management and shipping. It orchestrates tasks like order packing, shipping label generation and tracking information updates. This integration minimises errors and delays, providing a seamless shopping experience for your customers.
Additionally, the OMS monitors order status, from processing to shipping and delivery, providing real-time insights into your business operations. This data empowers you to make informed decisions, optimise inventory levels and improve overall customer satisfaction.
Features of an order management system
Other than the obvious feature of order processing, an order management system has other key features that help your business in more ways than one 👇
1 - Inventory management
You need a robust inventory management process for a successful business. An OMS tracks real-time inventory levels, updates stock records and prevents overselling by synchronising with the order processing system. It also helps you maintain optimal stock levels and avoid stockouts or overstock situations.
2 - Multi-channel integration
Your OMS integrates with various sales digital channels, such as online stores and marketplaces, and physical channels like brick-and-mortar stores. A good OMS enables centralised order management, providing a unified view of all orders regardless of the channel. It streamlines operations and provides complete visibility.
3 - Order fulfilment automation
Automation is key to an efficient business. An OMS automates tasks like order picking, packing and shipping label generation. It reduces manual errors, accelerates the fulfilment process, and ensures timely dispatch of orders.
4 - Customer relationship management (CRM) Integration
Integration with CRM is essential if you want personalised customer interactions. An OMS consolidates the entire customer base data, their order history and communication logs and empowers your customer service team to provide a more tailored customer experience.
5 - Returns management
Efficient handling of returns is critical to any business. An OMS manages the entire return process, from initiation to resolution, and keeps return rates low. It provides clear guidelines for return authorisations, tracks returned items and updates inventory accordingly, enhancing customer satisfaction.
6 - Real-time analytics and reporting
Comprehensive analytics offer insights for strategic decision-making. This feature of an OMS provides real-time reports on order status, inventory visibility and sales performance. By tracking these analytics, you can identify trends, forecast demand and optimise your overall business operations.