Unchain your inventory
Why is it that when sales and distribution channels cross paths – whether it being B2C or B2B - things start to go awry?
Consider this scenario, which unfortunately isn’t uncommon. You lose a sale to a customer even though the item he needs is in stock. If the item is indeed in stock, why did you lose the sale? Here’s where the problem comes in: the item is sitting in another store or at the distribution center – just not at the branch where the customer walked up to the counter.
Here’s another issue that happens almost every day. People on your team are left standing there lost for words when customers approach the customer service desk asking about an order they placed online the day before. Your employee is not able to provide an answer because they don’t have the information that’s needed for tracing where goods are in the supply chain.
In these two scenarios, two things are missing that would have saved the sale or satisfied the customer: a total overview of the stock at all their sites and means of accessing information on the status of orders received and delivered via a different channels. Problems like these and more crop up when customers deal with suppliers that don’t have a clue about what’s going on elsewhere within the organization. Because problems like these happen so often, customers have been conditioned to take all the promises about quality, rapid delivery and reliability with a pinch of salt. Can you blame them?
Fragmented IT landscape
In fact, many companies have been become trapped in a net woven from fragmented IT landscape threads. They operate a back office stitched together from ERP and WMS systems, which are inherited from company mergers and takeovers. Sometimes these disparate systems are complemented with a few best-of-breed systems, for instance, for planning or inventory management. This patchwork of systems can hardly communicate with each other, if at all.
Think about web shop software that runs your website and POS systems at service desks that were purchased at different times by separate departments. Integration of all these systems is complicated. Force fitting disparate systems together has the potential to create an inflexible framework of interfaces that will continue to cause problems. Even if companies intend to replace the plethora of systems with one company-wide ERP system and one commerce platform, there is no guarantee of success either.
But never fear! A solution that can bridge these disparate systems is an order management system (OMS). An OMS that is implemented as an enterprise-wide layer between back office and front office systems can connect various systems to one another. An OMS aggregates inventory data from all the underlying systems, too. This gives everyone in your organization a view of which items are available and where they are located. With this kind of system you can route and orchestrate every order to the right ERP or WMS system, regardless of channel. It also helps you keep tabs on the item’s journey to the customer’s site or for pick up at your branch. By applying decision rules, an OMS allows you to choose whether you want to deliver an order delivered at the lowest possible cost or offer your customer the option to have it delivered same-day or overnight. An order management system offers you additional options that you don’t get if you’re running an ERP system alone.
An OMS also offers you, in the long term, the flexibility required to keep up with your customers. Let’s say that you have new IT systems to integrate because an acquired company runs a different ERP systems. With the right OMS, you do not have to await a time-consuming integration process if you want to connect the acquired company to your distribution network. You immediately can enjoy the benefits of synergy.
If you want to outsource parts of your logistical process, such as the fulfillment of online orders, you can quickly connect your systems to your service provider’s. Or if you choose to stop keeping all the stock yourself, an OMS allows you also to tap in to your suppliers’ stocks, where you can enable drop shipping, for example.
An OMS provides multiple benefits. It enables you to provide your customers with a better service. For example, if a customer decides to order items via a different channel, the system will ensure that he is offered the same prices and discount rates. If the ordered item is no longer available from the nearby distribution center, the system will look for a hub where it is available. If it turns out to be cheaper and quicker to deliver from that hub, the system arranges it without the customer even realizing all of the complex orchestration of orders and payments happening in the background. In short, you provide your customers a seamless and consistent experience.
Existing structures and systems can hold your success over a barrel. The ingredients for success are: freeing your inventory from limiting structures and systems, embracing flexible fulfillment and empowering your staff to offer better customer service.