In a Supply Chain Crisis, Here’s Why Order Management is the Hero

Written by Jason Rieckewald-Schmidt , Advisory Solutions Director, RafterOne | An IPG Company

The Covid-19 pandemic will be remembered for many things, but one of the more striking and memorable images from a commerce standpoint was the sight of empty store shelves, particularly the absence of toilet paper. Those rows upon rows of empty shelves, stripped bare by overzealous consumers, were a stark visual representation of a supply chain crisis that exposed deep vulnerabilities in our systems.?

This sudden and overwhelming demand highlighted the limitations of traditional Enterprise Resource Planning (ERP) systems, which, until then, had been considered sufficient for managing order fulfillment . However, the pandemic revealed a glaring issue: what happens when demand far exceeds supply, as in the case where there are 500 orders but only 125 items in stock? This scenario created complexities that ERPs were simply not designed to handle.

The limitations of traditional ERPs

Pre-Covid, ERPs were adequate for most companies. These systems were built to streamline operations, manage inventory, and fulfill orders efficiently. Their primary focus was on shipping from inventory—ensuring that when an order was placed, the product was available and ready to be shipped. But the pandemic shifted the landscape drastically.

The sudden spike in demand for certain products, coupled with disruptions in supply chains, created a scenario where fulfilling orders became a daunting task. ERPs, with their rigid structure, were not equipped to handle the post-sale/pre-shipment complexities that arose. Their design did not account for the need to manage multiple orders with limited inventory or provide the visibility and flexibility required in such uncertain times. This is where the concept of Order Management Systems (OMS) began to take center stage. Unlike traditional ERPs, OMSs are designed to handle the intricacies of the post-sale process, offering businesses a more dynamic and responsive way to manage their orders, inventory, and customer interactions.

The emergence of Order Management Systems

Order Management Systems are not just an upgrade to ERPs; they are a transformation in how businesses manage the order lifecycle. An OMS provides visibility into the order status, shipping groups, and returns in a way that was not possible before. This visibility is not just limited to internal teams; it extends to customers, offering them real-time updates from the moment they click the ‘buy’ button until the order arrives at their doorstep.?

The impact of this is profound. Gone are the days when customer service representatives had to place customers on hold to “check the other system” for an update. With an OMS, customer agents and customers alike have access to real-time information about order status, reducing wait times and improving overall customer satisfaction. This shift has been especially beneficial for companies that conduct the majority of their transactions online, where the speed and accuracy of information are paramount.

“Order Management Systems are not just an upgrade to ERPs; they are a transformation in how businesses manage the order lifecycle.” – Jason Rieckewald-Schmidt, Advisory Solutions Director, RafterOne

Managing post-order complexities

Order Management Systems do more than just provide visibility; they help manage the complexities that arise after an order is placed. Consider a biotech firm that needs to coordinate closely with its customers to ensure that the right products are shipped at the right time. This process often involves a series of back-and-forth communications that traditional ERPs are not designed to handle. In contrast, an OMS streamlines these interactions, allowing the biotech firm to manage complex shipping schedules and customer requests without the need for numerous phone calls and manual updates in the ERP system.? For PacBio , implementing an OMS meant that what once required several phone calls and manual data entry could now be handled seamlessly. The system ensured that order accuracy was maintained, customer satisfaction improved, and the overall efficiency of the shipping process was enhanced—all without the need for human intervention. This “touchless” operation is one of the key advantages of an OMS, enabling businesses to scale their operations while maintaining high levels of customer satisfaction.

Addressing the Covid-era challenges in a post-Covid world

Returning to the Covid example, imagine being a customer searching online for a rare semiconductor part and placing an order, only to receive a call the next day informing you that the part is out of stock. This scenario was all too common during the pandemic. Inventory synchronization in traditional ERPs often occurred only once a day, meaning that inventory data on websites could be as much as 23.5 hours out of date. This led to situations where customers would purchase items that were no longer in stock, resulting in frustrating phone calls and lost trust. For customer support representatives, these calls were unfair. They were tasked with informing customers—who had already paid for their orders—that the inventory listed on the website was incorrect, and their orders could not be fulfilled. This not only led to frustrated customers but also placed a significant strain on the support teams, who were forced to handle the fallout from a system that could not keep pace with the realities of the pandemic-driven market.

“This digital transformation empowered companies to scale their operations, build stronger relationships with their customers, and ultimately navigate the challenges of the pandemic with greater ease.” – Jason Rieckewald-Schmidt, Advisory Solutions Director, RafterOne

However, for companies that implemented an OMS, the story was different. By integrating real-time inventory management into the front office, these companies could provide accurate stock levels on their websites, drastically reducing the risk of overselling. Orders were automatically synchronized with the ERP, ensuring that inventory data was always up-to-date, and fulfillment processes were seamless. The results were immediate and significant. Customer satisfaction soared as orders were fulfilled on time without unexpected delays. Support teams could shift their focus from damage control to providing excellent service, and the overall efficiency of the business improved. This digital transformation empowered companies to scale their operations, build stronger relationships with their customers, and ultimately navigate the challenges of the pandemic with greater ease.

Unlocking potential through acquisitions

Order Management Systems also play a crucial role in streamlining the integration process during acquisitions. When companies undergo acquisitions, one of the most significant challenges they face is integrating the acquired company’s technology into their existing tech stack. This process is rarely straightforward, as the newly acquired company may operate in a different market or region, bringing entirely new complexities to the table. An OMS simplifies this integration by linking together multiple ERP systems on the backend for inventory and fulfillment, creating a unified ecommerce experience on the front end. This “acquisition unlock” is a game-changer for companies looking to expand their operations through acquisitions. By bringing together order complexity from multiple ERPs, different distribution centers, and various fulfillment requirements into a cohesive front-office experience, an OMS provides IT teams with a defined data model and pre-built workflows. This not only simplifies the integration process but also enhances operational efficiency, allowing companies to focus on growth rather than getting bogged down in technical challenges. The importance of an OMS in today’s business landscape cannot be overstated. It addresses the shortcomings of traditional ERPs, provides the visibility and flexibility needed to manage complex orders, and streamlines the integration process during acquisitions. As businesses continue to navigate the post-Covid world, those that invest in robust Order Management Systems will be better positioned to meet customer demands, scale their operations, and drive long-term success.

Takeaways

The Covid-19 pandemic was a wake-up call for many businesses, revealing the limitations of traditional systems like ERPs. In response, Order Management Systems have emerged as a vital tool for managing the complexities of modern ecommerce and supply chain operations. By providing real-time visibility, streamlining post-order processes, and simplifying the integration of acquired companies, OMSs are helping businesses not only survive but thrive in an increasingly complex and interconnected world. As we move forward, the role of Order Management will continue to grow, offering businesses the agility and efficiency needed to meet the challenges of the future head-on.

Jason Rieckewald-Schmidt (JRS) has been in the Salesforce ecosystem for 15+ years. He started in implementations, worked at Salesforce as a Solution Engineer and Manager (where he was SE of the year 2x) and now works for RafterOne selling implementation services for Salesforce. He lives in Southern California with his wife and 3 kids. When he's not working, he's on his Peloton or hiking with his family.

RafterOne is a Salesforce Summit consulting partner, which focuses solely on implementing all of Salesforce's Clouds for customers.