The ultimate objective of any warehouse is to fulfill customer orders in a timely fashion. Every process, operation, and movement inside the warehouse or the distribution center is directed towards achieving that objective. Once a customer hits the ‘Buy Now’ button and places an order, the fulfillment process begins.
The order is accepted, items are picked, packed into boxes containers, and shipped to the customer’s address. While it all seems straightforward on paper, the size of the warehouse, products ordered, availability of staff, and frequency of orders coming in and going out can make order management a complex endeavor nightmare for warehouse managers.
What is order management?
Simply put, order management is the ability to manage every customer order efficiently right from receiving to fulfillment. The objective of efficient order handling is to ensure that it ensures that customers receive the correct products they have ordered and that too in an undamaged state. Orders can come in through online or offline channels and managing them efficiently properly is the key for warehouses to ensure flawless order delivery and enhanced customer experience.
Warehouse managers make use of physical ledgers, manual logbooks, or order management systems to stay on top of order status. Knowing the status of the order where an order is in the order throughout the fulfillment journey helps in streamlining the entire complete process and reducing errors. With warehouses expanding in size and the increased frequency and complexity of online orders with e-commerce businesses experiencing a surge in customer orders in the past few years, it can get quite overwhelming it's natural for managers to get overwhelmed by the number of orders coming in. Hence, which is why, it is imperative to having a robust order management capability system that in place can automate manual processes and provide better visibility and control over every order.
Basic steps involved in the order fulfilment process
There are several basic steps that constitute the complete order fulfillment process in a warehouse. The smooth flow of these steps is paramount for completing a successful order, improving customer experience and generating more revenue.
1. Inventory Check
Keeping an accurate inventory count and availability is one of the most important steps in order fulfillment. An out of sync inventory count that is not updated can mislead the customers into ordering products that are out of stock. This can result in orders getting canceled and hamper the customer experience.
2. Order Placement
In an omnichannel business, the customer places an order for a product available in the warehouse. Orders can be placed through websites, mobile apps, call centers, retail stores, or marketplaces or other channels as well. Irrespective of the source, every order information makes it way to the fulfillment center through the order management system in use.
3. Verification and Allocation
Next up is order verification. A member from the sales team or an automated system verifies the order with the customer. Verification can be important for some channels as it not only confirms the order, but also captures other essential details like the customer’s address, contact number, email ID, zip code, and more. Once the order is verified, it gets allocated to the available inventory quantity.
4. Picking and Packing
The allocated orders are batched and released to the warehouse floor for picking, sorting, and packing. Items are picked and from the warehouse as per the received order and are subsequently packed as per their dimensions, fragility, packing instructions, and other parameters.
5. Shipping Fulfillment
Packed orders are then shipped to the customer’s address through a chosen carrier that was noted during the verification step. Shipping methods can range can follow multiple methods, ranging from local delivery to overseas shipping in containers.
Challenges faced during order management
Here is a quick look at some of the challenges that warehouses face during order management.
Thanks to advances in technology and different e-commerce platforms, customers are spoilt for choice when it comes to ordering a product. However, a warehouse needs to deal with hundreds of orders coming in from multiple sources, be it online or offline. This creates a large data set that can be overwhelming to manage for a warehouse.
Fragmented and distributed order data affects warehouse productivity as well. Orders can slip through the system, recent orders can get dispatched earlier while older ones keep getting delayed, incorrect orders can get dispatched, or multiple pickers might end up working on the same order due to miscommunication. Not only does this waste precious time for a warehouse, but also leads to unnecessary expenses.
Standalone Order Management System
Communication among different warehouse processes has a key role to play in improving warehouse efficiency and reaping more revenue. Warehouses that employ a standalone order management system can fail to capitalize on the benefits of having synchronized operations where one process talks to another in real-time.
Order management is completely dependent on the inventory. An order management system that isn’t in-tune with the inventory status of the warehouse is a hotbed for errors and incorrect orders. Due to this, warehouses can get stuck in a situation where they need to fulfill an order that is not actually available in the warehouse. Inaccurate inventory count also prevents efficient order management as managers don’t have complete visibility of the stocks coming in, going out, or just sitting idle on the shelves.
Missing Order Batching
Consider all the metrics that need to be captured for a basic order fulfillment process. Warehouse managers need to record the order number, date, customer’s details, platform from which it was ordered, estimated delivery date, packaging directions, shipping details, and more. It is easy to lose track of some important metrics in this arduous process.
One such important metric is order batching and grouping. Orders are generally grouped in batches based on their delivery locations, dimensions, shipping channels, and other parameters. So, if manual pen and paper processes are followed, these batch details can get lost or misplaced. Inadequate visibility of these processes and lack of communication might lead to orders being grouped in different batches or not getting grouped at all. This can delay order delivery to a customer and not only give them an unsatisfactory experience, but also hamper the image of your brand.
Lack of Comprehensive Analytics
In order to improve something, measuring its current performance is necessary. One of the biggest challenges warehouse managers face during order management is the lack of comprehensive analysis at their disposal to warrant any changes. While fulfilling the order efficiently is important, having performance metrics of the various steps involved is also essential.
Data about the receiving, picking and shipping processes will clearly show which modules are performing on-par or below-par. This is helpful in not only removing the bottleneck that holds up the whole chain but can also optimize it for future orders. Errors are reduced and managers get a clear view of where the warehouse needs to improve to get more orders out.
How a warehouse management system can help in order management?
Efficient warehouse management systems (WMS) can take holistic care of a warehouse, which means it can handle order management as well. While there are standalone order management systems that are dedicated to managing orders, these sometimes are limited to just one domain and are unable to communicate with different warehouse operations. Here are a few reasons why investing in a robust WMS that handles order management can be profitable for your business.
Cross process synchronization
Just managing orders efficiently and with reduced errors is not enough to ensure smooth and correct order delivery. There should be cross-process synchronization that allows warehouse managers or the sales team to monitor the picking, packing, and shipping operations as well. Any mistakes or hiccups during this process can not only delay fulfillment for a customer, but also affect order management.
A complete WMS system can be integrated with every warehouse operation, providing real-time updates for everything. The person in charge of managing orders can easily check the inventory count present in the warehouse and accordingly update the availability of a certain product. This can prevent the customer from ordering something that is not available in the warehouse but visible on an online marketplace. A proper notification also stops salespeople from taking bulk orders for a product without knowing the actual inventory count.
Moreover, with advancements in technology, customers now want to track their orders in real-time to get an accurate sense of when their order will be arriving. Luckily, integration of order management with the shipping process provides the updated location status of the order to the manager as well as the customer.
Customers these days have the option of ordering products from different e-commerce platforms, online marketplaces, offline stores, PoS systems, and more. This creates a multichannel ordering system that warehouse managers need to capture while keeping track of incoming as well as fulfilled orders. A warehouse management system integrates with online and offline channels and seamlessly records orders coming from different sources.
This provides greater visibility and control to warehouse managers on every single customer order. By automating the manual back-office processes, WMS systems save a lot of time for the sales team, time which they can now spend on making meaningful connections with their customers. Orders will now have fewer chances of slipping through the ranks, as every order, no matter where and how it was placed, gets automatically reflected in the system for every sales team member to monitor.
Manual processes tend to consume a lot of time for completing anything. Humans are prone to committing errors as well and even the most skilled workers tend to make a mistake when orders come rushing in. Modern WMS systems make use of machine learning algorithms and artificial intelligence to not just take over some of the manual tasks, but also reduce errors.
These intelligent systems create batching algorithms powered by machine learning to reduce the amount of time it takes to input an order, search for the listed products, pack them in containers and place it with other orders of the same batch. The complete order fulfillment process finishes quickly, leading to faster deliveries, fewer errors, better use of money and resources, and an improved customer experience.
Orders coming into the warehouse sometimes need to be prioritized based on several different parameters. For instance, an order set for next-day delivery should be picked first over an order which can be delivered a few days later and has scope for flexible delivery dates. Doing this manually can be quite complex and this is where machine intelligence comes into play. WMS systems can come up with capacity planning algorithms that can prioritize orders efficiently. They can quickly analyze, based on different criteria, which order holds the utmost priority and should be fulfilled as soon as possible, and which order can be delayed a bit. This way, more important orders won’t get stuck in the order queue and can be dispatched instantly rather than waiting for orders that came before it to be fulfilled completely.
Why Hopstack could be the best order management system for your warehouse?
Hopstack’s cloud-based order management system seamlessly integrates with picking, packing, and shipping processes. Not only does it help you manage customer orders efficiently, but also eliminates errors.
Speed up your fulfillment cycle, serve more customers, and never miss an order, with Hopstack’s AI-driven order management system. It helps you measure performance metrics, take orders from multiple channels, cut down on operational costs, and improve the overall warehouse efficiency.