Order management

Order management

An order management system, or OMS, is a computer software system used in a number of industries for order entry and processing. Basic steps in OMS is

1-Ordering

2-Scheduling

3-Shipping

4-Bill Presentation Architecture

5-Auto Invoice to Receivables

6-Invoicing

7-Recipts

8-Cash Management

9- Transfer to Accounting General Ledger

Manager Job in order management is

  1. Implement and monitor effective deployment (which envisages a phased transition by site) of the target shared service model as it relates to Customer Service. After deployment, maintain accountability for service delivery, which would primarily include:
    1. Sales Order entry and management
    2. Coordination with production , planning , logistics Service provider to confirm dispatch dates
    3. Liaise with customer CHA’s / PEL CHAs for coordination between various legs of transport on CIF , Ex-Works and FCA basis
    4. Work with plant logistics , customer’s CHAs, transporters for on-time loading of material
    5. Ensure accurate and timely creation of pre-shipment and post shipment documents Ensure Zero detention and demurrage caused by PEL
    6. Liaise with banks and CHAs to ensure all shipment related documents are sent on time.
    7. Manual Invoicing (incl. CNs) to customer
    8. Customer communications (at various stages of order to cash cycle)
  1. Order confirmations
  2. Maintaining accurate records of discussions or correspondence with customers
  • Managing Customer helpdesk
  1. Customer Satisfaction survey (for order fulfilment)
    1. Establishing customer service work processes and standards in line with organizational customer service initiatives and objectives.
    2. Establish and effectively handle customer helpdesk to resolve and manage customer queries and complains
    3. Supervising customer service representatives and organizing work schedules and work activities. Providing daily guidance to customer service representatives to ensure service is delivered as per agreed SLA and KPIs
    4. Participate in Sales/ (Outbound) Logistics team meetings and support in identifying areas to improve cost and schedule, mitigate risks, manage claims avoidance and resolve issues.

Electronic commerce and catalogers

Orders can be received from businesses, consumers, or a mix of both, depending on the products. Offers and pricing may be done via catalogs, websites, or broadcast network advertisements.

An integrated order management system may encompass these modules:

  • Product information (descriptions, attributes, locations, quantities)
  • Inventory available to promise (ATP) and sourcing
  • Vendors, purchasing, and receiving
  • Marketing (catalogs, promotions, pricing)
  • Customers and prospects
  • Order entry and customer service (including returns and refunds)
  • Financial processing (credit cards, billing, payment on account)
  • Order processing (selection, printing, picking, packing, shipping)
  • Data analysis and reporting
  • Financials (accounts payable, accounts receivable, general ledger)

There are several business domains which use OMS for different purposes but the core reasons remain the same:

  1. Telecom - To keep track of customers, accounts, credit verification, product delivery, billing, etc.
  2. Retail - Large retail companies use OMS to keep track of orders from customers, stock level maintenance, packaging and shipping
  3. Pharmaceuticals and healthcare
  4. Automotive - to keep track of parts sourced through OEMs
  5. Financial services

Order Management requires multiple steps in a sequential process like Capture, Validation, Fraud Check, Payment Authorization, Sourcing, Backorder management, Pick, pack, ship and associated customer communications. Order management systems usually have workflow capabilities to manage this process.

Retailers and brands have eventually realized that ‘one size doesn’t fit all’. The big challenge for organizations remains to enhance Customer experience. Decision making involved in buying or selling process lacks focus on Customer lifecycle management. It’s evident that responsibility of customer experience no longer only lies with Marketing and can be driven through Operations.

Order Management Service helps drive revenue by focusing on your operations and customer requirements. solutions are tailored to enable end-to-end visibility and deeper insights to any order or query in B2B Order management environment.

Om can measure and manage best in Class metrics that impact cost reduction, customer experience and help drive revenue. We measure performance in real-time against defined metrics that provide insights needed to take timely corrective action.

standard design principles help identify the key levers that are critical for enhancing performance and customer buying process solution to place multiple orders in multiple ways and receive feed in the form customer demands:

Cost reduction: Cost-of-fulfilment and cost avoidance

  • Inventory Elements / Inventory Management
  • Order Cancellation Management
  • Reduce Returns
  • Reduce Deductions/ Chargeback’s
  • Reduce Cost/Order
  • Improve Order Accuracy

Business transformation: Enable Revenue / Cash Flow, Better Customer Experience, and Faster Go-to-Market

  • Increase consolidation / centralization
  • Reduction in Order Fallouts
  • Unclean Reduction
  • Cycle Time Reduction
  • Jeopardy Management

Process optimization: Bringing in Predictability, accuracy in billing and improving business metrics

  • Customer Satisfaction Improvement
  • Improving Right First Time
  • One Call Resolution
  • Improving Throughput / Yield by Straight
  • Re-engineer / standardize processes
  • Escalation Management - Increase collaboration with internal business users
  • Complaints Reduction
  • Monitor and focus on improving defined metrics and service levels.

 Order fulfillment

Order fulfillment is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer. Sometimes Order fulfillment is used to describe the narrower act of distribution or the logistics function, however, in the broader sense it refers to the way firms respond to customer orders.

Classification

The first research towards defining order fulfillment strategies was published by Hans Wortmann and was continued by Hal Mather in his discussion of the P:D ratio, whereby P is defined as the production lead-time, i.e. how long it takes to manufacture a product, and D is the demand lead-time. D can be viewed as:

  1. The lead time quoted by the firm to the customer
  2. The lead time the customer wishes it was
  3. The competitive lead time

Based on comparing P and D, a firm has several basic strategic order fulfillment options:

  • Engineer-to-Order (ETO)- (D>>P) Here, the product is designed and built to customer specifications; this approach is most common for large construction projects and one-off products, such as Formula 1 cars.
  • BUILD TO ORDER (BTO); syn: Make-to-Order (MTO) - (D>P) Here, the product is based on a standard design, but component production and manufacture of the final product is linked to the order placed by the final customer's specifications; this strategy is typical for high-end motor vehicles and aircraft.
  • Assemble-to-Order (ATO); syn: Assemble-to-request- (D<P) Here, the product is built to customer specifications from a stock of existing components. This assumes a modular architecture that allows for the final product to be configured in this way; a typical example for this approach is DELLs approach to customizing its computers.
  • Make-to-Stock (MTS); syn: Build-to-Forecast (BTF)- (D=0) Here, the product is built against a sales forecast, and sold to the customer from finished goods stock; this approach is common in the Grocery and retail.
  • Digital Copy (DC)- (D=0, P=0) Where products are digital assets and inventory is maintained with a single digital master. Copies are created on-demand, downloaded and saved on customers' storage devices, such as research papers.

Processes

In the broader sense, the possible processes in a logistic-production system are:

  • Product Inquiry- Initial inquiry about offerings, visit to the web-site, catalog request
  • Sales Quote- Budgetary or availability quote
  • Order Configuration- Where ordered items need selection of options or order lines need to be compatible with each other
  • Order Booking- The formal order placement or closing of the deal (issuing by the customer of a purchase order)
  • Order Acknowledgment / Confirmation- Confirmation that the order is booked and/or received
  • invoicing/ Billing - The presentment of the commercial invoice / bill to the customer
  • Order sourcing and planning
  • order change:- Changes to orders, if needed
  • Order processing- Process step where the DC or warehouse is responsible to fill order (receive and stock inventory, pick, pack and ship orders).
  • shipment:- The shipment and transportation of the goods
  • delivery- The delivery of the goods to the consignee / customer
  • Settlement- The payment of the charges for goods / services / delivery
  • returns- In case the goods are unacceptable / not required

Strategic Importance

The order fulfillment strategy also determines the de-coupling point in the supply chain, which describes the point in the system where the "push" (or forecast-driven) and "pull" ( demand-driven see ) elements of the supply chain meet. The decoupling point always is an inventory buffer that is needed to cater for the discrepancy between the sales forecast and the actual demand (i.e. the forecast error). Typically, the higher the P:D ratio, the more the firm relies on forecasts and inventories. Hal Mather suggests three ways to tackle this "planning dilemma":

  1. Improve forecasting accuracy
  2. Provide for flexiblity
  3. Build a process to recognize forecasting errors and quickly planning

It has become increasing necessary to move the de-coupling point in the supply chain to minimize the dependence on forecast and to maximize the reactionary or demand-driven supply chain elements. This initiative in the distribution elements of the supply chain corresponds to the JIT initiatives pioneered by TOYOTA.

The order fulfillment strategy has also strong implications on how firms customize their products and deal with product variety. Strategies that can be used to mitigate the impact of product variety include modularity, option bundling, late configuration, and  BTO strategies—all of which are generally referred as MASS CUSTOMIZATION strategies.

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