One of the most important functions of an Enterprise Resource Planning (ERP) system is the management of customer orders. An order for products or services initiates the core processes for attainment and recognition of revenue, so the order management system needs to be bulletproof. Unfortunately, that’s often easier said than done.
A Cornucopia of People and Processes
Many companies allow customers to order in a variety of ways: web, EDI, phone, fax, mail, mobility and direct-to-salesperson. The orders may come from businesses, consumers, third parties or a mix of multiple sources, depending on the products. The greater the variety of order sources, methods of order receipt, and item variance, the more complex the order process becomes.
In many cases, there are different recipients of the order depending on how it is placed, which may also impact the way the order is entered into the system. One department may need to upload orders from a spreadsheet, while another department receives orders via Electronic Data Interchange (EDI). Orders received in these ways will require some transcription into the system, which increases the potential for input errors. Many companies provide standardized order forms to their customers. This transfers the responsibility for order accuracy to the customer and dramatically streamlines the overall ordering process.
The manner in which the order is fulfilled creates another process that must be monitored. Some merchants have the product in their warehouse and can ship it out directly. However, if the merchant doesn’t stock the product, the order might be drop-shipped from the manufacturer. Alternatively, the merchant may use an outsourced fulfillment warehouse, which gets copied when the order is placed to facilitate quick shipment. In other cases, the merchant will need to work through multiple fulfillment sources to complete an order.
Order monitoring and management can often involve more than simply checking status. For example, the customer’s account activity and history may influence customization factors, such as possible discounts or other customer perks. Linking the order management system to Customer Relationship Management (CRM) systems can help keep track of loyalty programs that may have an impact on order costs. In addition, the order management system must share data with inventory management to ensure warehouses are stocked and ready to fulfill orders.
Decreasing the Probability of Error
With so many various entities engaged in the order before it is fulfilled, the chances for error can grow exponentially. A centralized, integrated order management system helps mitigate this risk. An integrated order management system may include:
- Product information (descriptions, attributes, locations, quantities)
- Inventory availability and sourcing
- Vendors, purchasing, and receiving
- Marketing (catalogs, promotions, pricing)
- Vendor rebate programs
- Order entry and customer service (including returns and refunds)
- Financial processing (credit cards, billing, payment on account)
- Order processing (selection, printing, picking, packing, shipping)
- Customers and prospects
- Carrier / shipping system integrations
Effective order management can make or break a growing business, so it’s important to take the time to understand the various options available. Apero can help simplify and streamline your order management processes.
Contact us today to learn more about how to navigate your way through complex customer orders.