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Order Fulfillment

What is B2B Order Management: Everything You Need to Know

Learn about the growing importance of B2B order management and why you must invest in order management software to unlock growth and scale big

Team Hopstack
May 13, 2024

In this blog

Today’s B2B businesses process frequent orders across multiple sales channels. With B2B e-commerce sales increasing year over year, most businesses need a fast, efficient, and seamless digital experience to manage online sales. Statista estimates U.S. B2B e-commerce will generate over three billion U.S. dollars in sales by 2027, growing at a CAGR of 10.7 percent. With more companies engaging in online transactions, B2B order management systems have become necessary to manage and scale with growing supply chain complexity. These systems are designed to streamline and automate order management, from entry through fulfillment, ensuring the best experience for your customers.

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Estimated sales of business-to-business (B2B) e-commerce in the United States from 2021 to 2027

What is B2B Order Management?

B2B order management refers to the systematic process of tracking and fulfilling sales orders between businesses. It encompasses everything from the initial order placement to the final delivery and post-sales support, ensuring that every step is executed efficiently and accurately.

Below are the key components of B2B order management and how they help businesses leverage a full spectrum of sales channels:

  • Order Processing: This is the first step in the order management cycle, where orders are received, validated, and entered into the system. Efficient B2B order management software automates these tasks, reducing errors and speeding up the order-to-cash cycle.
  • Fulfillment: Fulfillment involves picking, packing, shipping, and delivering the products. B2B order management systems optimize this process by coordinating logistics and inventory, ensuring timely deliveries while minimizing costs.
  • Post-Sales Support: After the order is fulfilled, post-sales support takes over to oversee returns, exchanges, and customer inquiries. With a robust order management system, you can manage these activities smoothly, enhancing customer satisfaction and loyalty.
  • Centralized Management of Wholesale and Retail Orders: B2B order management systems offer a centralized platform to manage both wholesale and retail orders. This integration provides a unified view of all transactions, helping businesses manage orders more effectively and make informed decisions.

B2B Order Management Process: How Does it Work?

B2B order management involves multiple steps, from managing supplier relationships to ensuring post-sales support. Companies catering to multiple clients across different sales channels need a robust system in place to navigate the complexities of B2B transactions. A software-first approach is essential to centralize customer interaction across multiple digital touchpoints. 

Here's a detailed look at the B2B order management workflow:

Supplier Management

B2B order management software offers a centralized supplier database that tracks performance metrics, compares rates, and maintains communication history. This data puts you in a strong position to negotiate future contracts, track supplier performance, and manage purchase orders. 

Centralized supplier management ensures that businesses can maintain a steady supply of inventory with predefined quality standards. B2B order management software allows businesses to set up automated alerts for expiring items, quality discrepancies, and delays.

Inbound Logistics and Storage

Once goods are procured from suppliers, B2B order management systems generate accurate receiving documents, including expected quantities and any specific quality requirements. The receiving process involves inspecting goods for quality and accuracy, logging them into the inventory system, and storing them in a manner that facilitates easy retrieval. 

B2B order management software plays a critical role here by automating the receiving process, tracking inventory levels in real time, and optimizing warehouse space.

Order Capture

In B2B transactions, orders can be placed through various channels, including online portals, email, phone, or EDI (Electronic Data Interchange). Omnichannel efforts make accurate data capture even more essential to prevent errors downstream. 

B2B order management software seamlessly connects disparate systems to capture order data and centralize it within a single platform. It automatically records crucial information such as customer data, order quantities, pricing, and delivery instructions through seamless system integration, ensuring that data flows accurately and effortlessly between different systems.

Order Processing

After order capture, businesses must validate the order against the inventory to confirm availability. B2B order management software checks the order details against current stock levels and, if the products are available, confirms the order with the customer. Otherwise, the system can trigger backorder processes or notify the buyer of potential delays. Order processing also involves credit checks and other validations specific to B2B transactions. 

Order Fulfillment

Order fulfillment in B2B, given the larger volumes and more complex requirements, can be significantly more complicated than B2C fulfillment. B2B order management software empowers businesses to streamline this process by generating picking lists, optimizing packing workflows, and selecting the most efficient shipping methods.

Depending on your business model, you can also account for special considerations like batch numbers, expiration dates, and storage requirements are also managed during this phase.

Order Tracking and Post-Sales Support

After an order is shipped, B2B order management software provides tracking information to both the business and its customers, allowing for real-time visibility into the order's progress. This software also facilitates post-sales support, including handling returns, exchanges, and responding to customer inquiries. 

b2b order management workflow

Specialized Workflows in B2B Order Management

PIPO and Cross docking are specialized workflows that, when effectively implemented within the B2B fulfillment ecosystem and supported by robust B2B order management systems, can significantly improve operational efficiency, reduce costs, and enhance customer satisfaction across all industries, particularly in e-commerce.

PIPO (Pre-In, Pre-Out)

Pallet In/Pallet Out, also called PIPO, is a strategic workflow designed to optimize how businesses handle palletized goods. This approach focuses on managing the complete cycle of palletized inventory from the moment it enters the warehouse to when it exits. With PIPO, the goods are received and shipped out in their entirety without being broken down into individual units.

The Pallet In/Pallet Out method is ideal for businesses with high inventory turnover, that can predict supply chain activities and primarily deal with bulky or pre-packaged items. A B2B order management system works in tandem by providing real-time inventory visibility, allowing orders to be flagged for PIPO fulfillment. The system automatically generates optimized picking and shipping instructions tailored to pallet-level handling, streamlining the entire process.

Cross Docking

Cross docking is a strategy where incoming goods are directly transferred from receiving docks to shipping docks, bypassing the need for long-term storage. This process can be immediate or involve minimal storage time, depending on the complexity of the orders and the setup of the warehouse.

Cross docking is most effective in environments where products have a high turnover rate and demand predictability. It is widely used in retail, e-commerce, and manufacturing sectors, where reducing inventory holding costs and speeding up delivery times are critical. Cross-docking empowers businesses to reduce warehouse costs, achieve shorter delivery times, and decrease product handling.

Challenges with B2B Order Management

With B2B commerce growing in prominence, businesses need to scale their existing order management for greater efficiency. These challenges, if addressed adequately, can help the growth and efficiency of businesses across all sectors of the B2B market.

Manual Processes Leading to Errors and Delays

Many businesses still depend on traditional, paper-based methods for entering order information across multiple sales channels. It’s time-consuming, and manual data entry can lead to inaccuracies in order details, resulting in incorrect shipments, billing errors, and, ultimately, dissatisfied customers. 

Relying on manual communication between departments (sales, warehouse, fulfillment) creates information silos, potentially leading to misinformation and delayed decision-making. Without real-time, software-driven stock visibility, manual inventory tracking leads to overselling, order cancellations, or costly back-ordering scenarios.

Difficulty in Managing Large Volumes of Orders

Legacy systems struggle to scale according to seasonal peaks and demand fluctuations. Seasonal spikes or sudden demand surges can lead to slowdowns, system crashes, and lost sales opportunities. 

Scaling up manually can be chaotic, and the inability to handle high volumes can lead to delayed order processing and fulfillment, adversely affecting customer relationships. The challenge is further compounded for businesses that operate across multiple sales channels, as they need to ensure consistency and accuracy across all platforms.

Diverse Product Catalogs and Customer Demands

For B2B businesses that offer extensive and diverse product catalogs, custom configurations or specific kitting requirements can add another layer of complexity to order management. A recent study revealed that 73 percent of B2B decision-makers want a personalized buying experience like the one that B2C sales provide. With orders flowing in across multiple sales channels like websites, marketplaces, EDI, and direct sales, most businesses require a comprehensive order management system to handle various product specifications, pricing models, and customization options.

Without a centralized view of orders across channels, providing customers with accurate order status updates or identifying potential fulfillment roadblocks becomes nearly impossible. B2B fulfillment navigates the complexities of serving customers with different purchasing behaviors, order volumes, and delivery preferences.

Compliance and Regulatory Requirements

Navigating tax rules, shipping restrictions, or differing import/export requirements for international orders can be a nightmare without centralized software support. Compliance with safety standards, labeling requirements, or specialized handling procedures within industries like healthcare or food can prove complex to manage manually. 

B2B businesses have to safeguard sensitive customer and order data from the potential risks of breaches while simultaneously maintaining transparent and traceable audit trails. These requirements can be extremely challenging to manage with traditional paper-based methods, especially for B2B businesses operating across international borders.

The Importance of B2B Order Management Software

The challenges outlined earlier aren't just an operational obstacle; they directly impact your profitability and long-term customer relationships. If implemented correctly, a B2B order management system can potentially become a transformative investment for your business. Here's how:

Unlock Multichannel Capabilities

Modern businesses operate across multiple sales channels—online, direct sales, partner channels, and more. According to McKinsey & Company, B2B companies that provide the best omnichannel experience are improving their market share by at least 10 percent annually. A B2B OMS provides multichannel capabilities that allow you to:

  • Sell everywhere, manage centrally: A modern B2B OMS seamlessly integrates with your online storefront, marketplaces, EDI connections, and even direct sales rep orders. This unified view breaks down silos and aligns your order management technology to your present business model.
  • Data-driven decisions: The B2B OMS centralizes all your order data instead of juggling separate sales reports. This drives better analysis of channel performance, customer trends, and product demand for smarter inventory and pricing strategies.

Break Free from Data Silos

Data silos are a tremendous obstacle to organizational growth across all industries. A B2B OMS centralizes data, offering several key advantages:

  • One source of truth: B2B order management systems are the central repository for all order-related information – product data, customer history, pricing structures, shipping preferences, and more. This eliminates inconsistencies and empowers every team member with accurate, up-to-date data.
  • Real-time visibility: Get real-time visibility into every order stage, accessible across relevant departments, reducing delays and improving customer communication.

Improved Order Fulfillment Speed and Accuracy 

A B2B OMS automates many aspects of the order processing workflow to reduce the time from order placement to fulfillment drastically.

  • Intelligent routing: The B2B OMS optimizes order fulfillment based on factors like inventory location, shipping carrier rates, and delivery deadlines. This translates to faster shipments and lower costs.
  • Seamless 3PL integration: Order management systems empower businesses to better manage 3PL partnerships through direct integrations, offering full oversight and control.

Greater Control Over Inventory 

A B2B order management system enables greater visibility into inventory management to prevent order fulfillment challenges like overstocking or stockouts.

  • Precision tracking: B2B order management software provides real-time inventory visibility across multiple warehouses or storage locations. You can set intelligent reordering thresholds and gain instant alerts on low-stock items. This lowers the total cost of ownership, leaving room for future development.
  • Managing complex inventory: Modern B2B OMS can effortlessly handle complex units of measure, kitting and bundling, configurable items, and even serialized inventory.

Accurate and Efficient B2B Billing

Billing and invoicing, especially for B2B orders, can become complex because of various payment terms, volume discounts, and contractual agreements. Gartner estimates that 83 percent of B2B buyers prefer ordering or paying through digital commerce. A B2B OMS can automate these processes, leaving less room for error.

  • Flexible accounting: Tailor invoices based on customer-specific pricing, negotiated terms, tiered discounts, or even specialized credit arrangements. The B2B OMS automates these complex calculations, reducing errors and disputes.
  • Ready integration with accounting tools: B2B order management systems can seamlessly integrate with existing accounting software. This makes digital transformation painless, eliminating time-consuming data re-entry and ensuring your financial records are always aligned with your orders.

Hopstack for B2B Order Management

Hopstack simplifies and streamlines complex wholesale and bulk fulfillment operations within your B2B order management processes. Its flexible storage management enables customized location configurations for optimized inventory movement. Configurable form factors offer granular visibility from pallets down to individual units, maximizing space utilization. Seamless LTL/FTL shipping integrations empower you to compare carriers, automate labeling, and streamline documentation generation. 

Are you ready to take your B2B wholesale fulfillment to the next level? Contact us to schedule a demo and see how we can transform your operations today and scale for tomorrow.

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