(This article was last published on April 21, 2017. We’ve updated it for accuracy and completeness.)
Today’s consumers want to interact and buy from your brand across different offline and online channels. No matter where they buy, they want that experience to be friction-less and intuitive. Consumers will even pick a favorable experience over shopping for the lowest price or top-quality product.
This puts a lot of pressure on merchants to create a seamless experience. You have to be strategic and thoughtful to ensure your systems and processes support customer expectations.
When it comes to order management and delivery, many retailers are turning to distributed order management (DOM) to achieve just that. The challenge? Distributed order management is a dynamic change from traditional order management. It can be difficult for merchants to make the necessary changes to support.
But, those who do it right can gain a competitive advantage and better serve their customers.
What is Distributed Order Management (DOM)?
Simply put, distributed order management (DOM) is optimizing the systems and processes during the sales order lifecycle to efficiently deliver orders on time to customers. It includes processes like:
- Drop shipping orders to integrated suppliers
- Utilizing 3PL providers to outsource parts of your supply chain
- Splitting orders to optimize fulfillment costs and delivery times
- Defining workflows that handle different types of orders different ways
- Having inventory visibility throughout the entire supply chain, even through third parties
To achieve this, you need two things: (1) a single, global view of inventory and orders across your entire supply chain and (2) the ability to orchestrate and automate several key functions from order routing and splitting to inventory forecasting and management.
However you do it, DOM is all about improving your customer experience.
DOM = Customer Experience
When your order lifecycle is optimized, your customers gain a better experience. You can offer experiences like:
- Displaying accurate product availability across channels
- In-store associates can find and ship out-of-stock items in-store to a customer’s home
- Faster, accurate order deliveries at a lower cost
- More fulfillment options like “buy online, pickup in store”
- Better replenishment of inventory to avoid stock-outs
- Easy and fast online returns process
The result? Increase in sales and better customer retention rates.
Distributed Order Management Vs. Traditional Order Fulfillment
Compared to traditional order management practices, distributed order management is more dynamic. It uses cloud-based infrastructure and web service-based integrations to optimize and automate processes. It allows you to treat all parts of your order fulfillment process as if they’re happening in the same organization, even though they aren’t.
With traditional order management systems, your processes can be static and your suppliers are a black box. When an order is stuck in “to be fulfilled” status, you don’t know when it happens or how long it’ll be there.
But, with real-time information and visibility, DOM solves common fulfillment problems and improves:
- Accurate fulfillment of drop shipped items
- Optimized shipping costs by using ship-to addresses and real-time shipping quotes
- Ability of suppliers to actually fulfill your stores in smaller, more frequent batches
- Purchasing from the most affordable supplier always
With DOM, there’s no more guessing or wondering about the efficiency of your supply chain or the status of an individual order for your customers.
Investing in Distributed Order Management Software
While distributed order management started as a trend a few years back, it’s now a necessity to keep up with customer expectations. Otherwise, your technology and processes can hold you back from growth.
To get started with DOM, it takes upgrading your traditional inventory and order management software to cloud-based and flexible systems with features like:
- Automation: You need to be able to automate complex processes between retail systems, suppliers, and more.
- Real-time Visibility: A single, global view of your entire operations
- Customization: Be able to control and design your workflows around the unique experience you want for your customers.
- Integration: You want to connect multiple endpoint systems (both your own and supply chain partners) for an easy and reliable way to share data for real-time visibility.
- Scalability: Does the software meet my needs NOW and where we’re heading in the future?
As you evaluate DOM systems, look at your current processes. Figure out what you do well and what you don’t. You should know what your pain points are. Think about what type of customer experience you want to provide.
Once you understand your needs, you’ll be ready to start looking at software options that specialize in distributed order management capabilities. Some options are:
- Microsoft Dynamics 365
- SAP Hybris
- Manhattan Associates
- Kibo Order Management
- IBM Sterling
For systems like NetSuite and Microsoft Dynamics 365, you can use nChannel to help integrate them with your eCommerce, POS, or 3PL platforms to share data in real-time across your entire supply chain.
More DOM Resources
Distributed order management is a big idea. Check out these other resources to learn more about DOM.