What is Order Processing Management?

Manufacturers and organizations are hustling to achieve greater share of pie in the market. They can do it by nurturing more customers and converting the pool of customers into happy customers.

But this transition is not easy. This needs an effective order processing system. At a beginner level, any organization can do it effectively in traditional way, i.e., with the help of pen and paper or by using spreadsheets.

But for a bigger organization, the heavy lifts are done by Order Processing Software.

Don’t fear these heavy jargons of business! This blog will break down all the heavy biz-words and present order processing and management in the easiest possible way.

Let us first know the major halts of the blog:

• What is Order Processing?
• What is Order Management?
• Why is Order Management Important?
• Challenges Faced While Managing Orders
• Impact of Effective Order Management on Businesses
• How ERP can Help in Effective Order Management?
• Concluding Note

What is Order Processing?

Order Processing is series of stages critical for meeting customer orders. Order Processing lays foundation of order fulfilment which, if done effectively, can lead to customer satisfaction and eventually repeat business.

Order processing is an order flow which kicks in right after order generation and lasts up to order fulfilment and sometimes extends up to return handling and either refund settlement or substitute delivery.

In other words, order processing is flow of events that takes place in following chronological order once the order is placed:

1. Order register – When a business receives an order, the order detail like customer name, item ordered, quantity, shipping, and billing address etc are registered in an order management software.
2. Warehouse check and picking – The integrated inventory management software checks the availability of inventory. Once the system confirms availability, the item is picked at warehouse. This is done in an effective way so that the items are picked as fast and as meticulously as possible to push it to the next step of order processing.
3. Sorting – Picked items are sorted as per the destination. Sorting helps to optimize shipping cost.
4. Packing – Items are packed based on order number. Packing is done in a way that the order stays safe during transit and yet minimize the packing cost. During packing, the appropriate labelling is done, like recipient’s address, other important instructions etc.
5. Shipping – This is the process of transferring the product or item to the destination. They can either be sent directly to the customer or they can be clubbed with items of other nearby locations. While shipping, there must be a reliable tracking system to update consumer about their order status. Once orders are delivered, feedback of customers are noted, and registered.
6. Invoicing – Once the goods are shipped, invoice against the sent items are generated and sent to the customer. Customer makes payment against this invoice.
7. Return handle (On situation basis) – Due to any unlikely event, customer may return the product. Return involves registration of return, parcel collection, its packaging and sending it back to the manufacturer.
8. Refund or substitute delivery (on situation basis) – Once a customer returns a product, this return should be compensated either with refund or with a substitute delivery. ?According to the wish of the consumer, necessary action is taken to fill the gap.

What is Order Management?

Order Management is the process of managing orders effectively. The aim of order management is to smoothen the order processing and create a base of happy customers.

Why is Order Management Important?

Order Management is necessary for three reasons:

1. It helps to avoid stock issues.? An effective order management helps avoid both understock and overstock situations. Both situations can result loss of opportunity or wastage, which an effective order management save. ??
2. By having effective order management, organizations can make sure that the right item is delivered to the right address at right time. Avoiding this correctness can trigger dissatisfaction of consumers which can be detrimental of the business.?
3. It saves time and money. Due to loss of opportunity or wastage, businesses can envisage loss of money. Besides, wrong delivery can trigger refund and recalls. This ineffectiveness will eventually waste time, exhaust money, and create highly dissatisfied consumers which will create bad publicity of your business.

Challenges Faced While Order Management:

Order management is a very tricky process. There are many challenges manufacturers face while managing orders. Some of these are:

Product type – Order management depends a lot on type of product to be processed.

Processing orders like cosmetics or clothing is less complicated than processing items like food or flowers as the latter need shipment in controlled temperature and humidity. Also, the shelf life of such products is very low, hence, such orders need to be processed faster.

Order type – Management of bulk order differ from that of retail orders due to various reasons.

While in picking, bulk order is generally batch picked, whereas the retail order can be zone or item picked.

(Batch Pick- Picking products of the same batch. ?Zone Pick- Picking items from the same zone of warehouse)

Generally, the shipping of retail order is generally sent to the customer, while that in case of bulk order is done at distribution centre. ?

Workforce interference - The intellect of workforce involved in processing an order impacts its effectiveness. The efficiency of workforce can speedup or prolong the processing duration, impacting customer satisfaction at last. ?

Seasonal demands – Seasonal demands can impact the speed of order processing. Season puts extra pressure on the system. With more orders to register, more items to pick, more orders to pack and ship, sometimes orders get delayed. A delayed shipment frowns customer.

Impact of Effective Order Management on Business: It is not a hidden fact that a happy customer brings repeat business. Not only repeat business, but he becomes a brand custodian and therefore helps organizations to widen its consumer envelope. With the help of these consumers, organizations take a larger share of pie in the market and becomes more profitable.

The story of this abundance for organizations starts with an effective order management. When businesses have effective order management, they capture the requirement effectively. Then they pick, sort, package and ship the orders as fast and as aptly as they can and eventually complete the order cycle effectively.? Infact, the popularity of various brands of the same category majorly depends upon the effectiveness of their order management. Hence, they must deploy an effective order processing management system.

How ERP can Help in Effective Order Management?

ERP software is an enabler of growth. It performs a key role in order processing as well. An ERP has the capability to register an order, checking availability in warehouse. It automates the data entry and along with speeding up the process, reduces errors caused by human interference.

An ERP works as both- order management software and inventory management software. ?Thus, when an order is triggered, it shows if the product or item is available in stock. If the product is not available in stock, it can directly generate production or procurement requirement, as per the need.

With integrated inventory module, it helps make commitment of the delivery considering the on-hand inventory, availability at other warehouses, in production or expected to be received from the vendor.

ERP software fosters picking and packing, and it facilitates shipping. It helps organizations with required labelling and shipment tracking.

Moreover, with an integrated financial module, an ERP software can automatically trigger financial entries, averting the possibility of manual errors and time lag.

Customers can send their feedback to the organization and the CRM associated with the ERP software can manage and align them properly. With a robust CRM, organizations can handle complaints, assign personnel for complaint resolution, resolve complaints, and intimate customers about actions taken, and create a pool of happy customers.

These and many other capabilities are provided by an ERP. It not only takes care of Order Processing but ensures its seamless integration with other business functions that results in timely delivery and satisfied customers.

One such effective ERP software is BatchMaster ERP. ?Let us discuss how BatchMaster ERP meticulously manages orders and speeds up the process. ?

• Handles complete Sales cycles- from Quote to order to Picking, packing, shipment, and invoicing
• Easily generates Sales Quotation and Orders. Single clicks transfer of Quotes to Order and Order to shipment
• Manages Customer, Prospect, And Salesperson Information.
• Volume-based scaled pricing, discounts and mark-ups based on customers or customer groups, and products or product groups.
• Maintains Contracts, Sales Templates, and terms of payment
• Prints pick list, packing slips, bill of ladings and Certificate of Analysis
• Confirms and processes shipments, supports partial shipments and back order
• Checks inventory for parts availability during shipment; instantly updates the inventory after shipment.
• Supports generation of single as well as multiple invoices for a single order
• Bundles together different items through Sales Kit
• In depth Insight through multiple sales reports
• Handles returns with ease- updates inventory, GLs, and account accordingly

With such and many more features of BatchMaster, the process is seamless and easy.

For more details on order management capabilities of BatchMaster ERP click here.?????????

Concluding Note:

No matter how hard you work for organization, until you have an effective order management software, your hard work will not yield required result.?

BatchMaster ERP offers innumerable benefits, capabilities, and features to aptly manage your orders, while also integrating it with inventory, production, finance, and CRM software.

With all components of your business management doing their best, you come closer to nurture satisfied customers. BatchMaster ERP can help you in this endeavour.