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The Order Management Process Explained (Free Templates Included)

Placing an order and receiving it seems straightforward. But the only reason it feels effortless is because of order management. We’ll explain what order management is and explore how an order management process is conducted.

There are, of course, people behind the order management process. We’ll define those roles and link to some free templates to download, which will help users facilitate the order management process.

What Is Order Management?

Order management is the streamlined process of receiving, tracking and fulfilling customer orders to create optimum efficiency. It starts at inception and ends at fulfillment, unless the order is returned, which is then part of the process. But it’s not only managing processes, but the people and the data involved in those processes.

One way to enhance the efficiency of the order management process is through an order management system. This tool gives real-time visibility into orders and gives vendors the tools to manage their customers in one place. Order management is a large endeavor that includes warehouse employees and managers, resource planning and often third-party logistics and shipping partners.

The goal of order management is to have these different components work together as quickly and accurately as possible. Customer satisfaction is also an objective. They should be happy with the product, of course, but also with how the company handled their order and delivered it. This requires the fulfillment of orders without overburdening the business’ capacity. Small businesses may get away with order management on spreadsheets, and there are free templates to help them do so below, but larger companies need software.

Then there are customer expectations. With the advent of online shopping that can deliver products to one’s home in a day or even less, companies need to improve their game. Order management tools can increase the efficiency and accuracy of the order management process, which we’ll detail momentarily.

ProjectManger is award-winning project and portfolio management software that can manage order processing and fulfillment activities with robust and customizable kanban boards. Kanban columns can reflect the order management process and kanban cards each order, providing visibility to the process. More than that, kanban cards can be set for recurring tasks, track cost, manage resource scheduling and compare planned versus actual progress to help you meet deadlines. Get started with ProjectManager today for free.

Order Management Process

The order management process starts when the customer places a purchase order and the payment process has been completed. It ends with the customer receiving that order. If there’s a return, however, that process ends with the return of the product to the business.

Let’s take a look at the order management process and how it works to deliver orders quickly and accurately. This is done by following these four steps.

Order Placement

As noted, the order management process begins when the customer places an order. The business then receives that order placement and collects payment for it. Some manufacturers send a sales order to their customers to confirm that they’ve approved their purchase order. After the payment has been received, the purchase details are relayed to the warehouse where the product is stocked and a team is ready to fulfill the next step in the order management process. Those details include the item, quantities, shipping details and delivery address.

Order Processing & Fulfillment

Now that the order is at the warehouse, employees there will go through the process of processing the order and fulfilling it. That means they collect the specified quantity of items from the inventory as detailed in the customer order. This process is highly controlled for it to be as efficient as possible. The faster an order is accurately picked, the sooner it can be packed and shipped.

Different strategies relate to picking inventory: piece, zone and batch picking. Piece picking is where each warehouse employee collects products one at a time. Zone picking is when each picker is responsible for a zone in the warehouse. Batch picking is where pickers collect products for several orders at once.

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Purchase Order Template

Use this free Purchase Order Template for Excel to manage your projects better.

Next, there’s sorting; the picked items are separated according to where they’re being delivered. After that, the item is packed in the appropriate boxes, weighed and labeled with the final destination address and any needed shipping instructions. This should be done as cost-effectively as possible, considering dimensions and weights that can be easily handled and shipped inexpensively as this is an important operational cost for manufacturers.

The shipping stage is next. This involves the transportation of the package to the customer. The package doesn’t have to be sent directly to the customer, it might first be consolidated with other orders that will be shipped to the same area. This cuts costs and minimizes the total amount of shipments that have to be made. When shipping, it’s important to track the deliveries to ensure they go to the right place promptly.

Inventory Management

Part of the order management process is ensuring there’s enough stock on hand to fulfill the sales orders coming into the business. Inventory management is the process of ordering and tracking stock in a warehouse. This can include the management of raw materials, components and finished goods. It also involves processing the items to ensure the warehouse has neither too few nor too many items in stock. We’ve created a free inventory template for Excel you can use to track your inventory levels and track other information about each item like unit price, reorder point, reorder quantity and more.

Returns, Warranties and Post-Sales Services

The last stage of the order management process is when the customer, for whatever reason, returns the item. While this isn’t a regular occurrence, it happens enough to be a part of any order management process and it’s an important aspect of logistics management . Return management is the process of dealing with unwanted or broken products from customers who are dissatisfied with their orders.

Another reason for a product being returned to the seller is a warranty issue. This is when the product doesn’t perform as promised and, therefore, can be returned. This process includes receiving the defective product or replacing it altogether. If there are too many of these issues, you should review your quality assurance procedures.

There’s also post-sales, also called after-sales, which is the support provided to customers after the product has been sold. This is a business strategy to increase customer satisfaction, brand loyalty and word-of-mouth marketing. Warranties fall under this category, as does training and product repair.

Order Management Roles

Many professionals work within the order management process. Here are some of the professional positions that are responsible for ensuring a smooth and efficient operation.

• Order Manager: Manages coordination of fulfillment to ensure they’re done properly and on time, also deals with issues as they arise in the order management process.
• Order Processor: Responsible for accepting orders and processing them , including documentation, preparing bills and shipping details.
• Inventory Manager: Ensures there’s sufficient stock to fulfill all customer orders.
• Customer Service Representative: Addresses and solves customer complaints and inquiries.
• Shipping Coordinator: Arranges the delivery of customer orders and manages shipping schedules to ensure customer orders are done correctly.

The purchase order is the legally binding contract between a buyer and a seller. It outlines the price, quantity, delivery and payment terms for a product. This free purchase order template for Excel captures all the information necessary to make the transaction smooth, from item description to shipping and payment terms.

More Free Order Management Templates

Order management can be an overwhelming job, but one that is essential to the success of a business. Therefore, it’s recommended that the order management process is handled by software that can streamline the process without neglecting quality control. However, some templates can help in the process. Here are a few free order management templates.

Request for Quote Template

A request for quote (RFQ) is part of the procurement process. It helps narrow down the suppliers who can meet one’s price point and quality requirements. This free request for quote template for Word captures all the pertinent information, from price to terms and shipping information.

Inventory Template

Use this free inventory template for Excel to manage stock and always have enough, but not too much inventory on hand. It lists inventory, describes it and the price per unit. Then it shows how much is in stock and notes when that level of inventory needs to be replenished.

Sales Order Template

A buyer uses a purchase order to initiate the purchasing process. A sales order is sent by suppliers to buyers after receiving a purchase from the buyer to verify details and confirm the purchase. This free sales order template for Excel thoroughly lists all the information necessary to make this translation happen without issue.

ProjectManager Helps With Order Management

As noted above, templates are helpful, but only to a point. They can slow down the order management process as they must be manually updated and aren’t connected to a business’s software platform. Project management software smooths out those rough patches to make the order management process run more efficiently. ProjectManager is award-winning project and portfolio management software that can manage the order processing and fulfillment process, as well as the planning production and monitoring progress, resource utilization and costs.

Plan, Schedule and Track Each Step of the Production Process

The order management process is dealing with finished products. But first, those products must be assembled with components or raw materials. The production of those products can be planned, scheduled and tracked on powerful Gantt charts. Not only can every stage of the manufacturing process be organized, but all four types of dependencies can be linked to avoid having to shut down production, which is costly and negatively impacts schedules. When a baseline is set, production variance can be tracked in real time.

Monitor Progress, Resource Utilization & Costs

When the baseline is set, the ability to track variance is activated across the software. That means you can easily generate customizable reports to show live data on workload, timesheets and more. The real-time dashboard automatically collects live data and displays it on easy-to-read graphs and charts that show production metrics, such as time, cost and workload. This gives managers transparency into progress, resource utilization and costs to keep production on track.

Related Content

Order management is only part of the larger picture, which includes inventory management, production, purchase management, logistics and supply chain management. Follow the links below to learn more about these subjects.

• Kanban Inventory Management: How to Run a Kanban System
• Calculating the Production Budget (Formula & Example Included)
• Purchase Management: A How-To Guide With Best Practices
• Logistics Management 101: A Beginner’s Guide
• An Introduction to Supply Chain Management (SCM)

ProjectManager is online project and portfolio management software that connects teams whether they’re in the office, on the factory floor or anywhere else. They can share files, comment at the task level and stay updated with email and in-app notifications. Join teams at Avis, Nestle and Siemens who are using our software to deliver successful projects. Get started with ProjectManager today for free.

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Order Processing Management: Tips and Best Practices for Manufacturers

In the world of manufacturing, order processing management is an essential component in satisfying customer demands, optimizing inventory utilization, and ensuring timely order fulfillment. It involves a series of steps that help streamline the process from receiving an order to shipping it out to the customer. In this blog post, we will look into what order processing is in supply chain management, the specific steps involved in the process, and how to manage your orders as effectively as possible to ensure smooth and efficient operations.

What is order processing management?

Have you ever wondered what exactly is meant by order processing management? It's the intricate web of activities and procedures entwined in handling customer orders from the moment they're placed to the ultimate fulfillment and delivery. It's a comprehensive process, dealing with every step necessary to ensure customer orders are received correctly, processed accurately, tracked meticulously, and fulfilled promptly.

What does this process entail, you might ask? It's a journey that starts with receiving an order, followed by its validation. Next comes inventory allocation, picking and packing items, shipping, and finally, tracking the order. It's like a relay race, starting with the customer placing an order and ending with the successful delivery and closure of that order.

You might be thinking, why is efficient order processing so crucial? Well, it's simple. It's the backbone of customer satisfaction and optimized supply chain performance.

But how do you achieve effective order processing in supply chain management? It's all about the team effort. It requires a symphony of coordination and integration between various players on the field. This includes your sales teams, warehouse staff, transportation providers, and customer service representatives. Everyone has a role to play; when they play it well, the result is seamless order processing.

As a team, you can harness the power of technology to streamline and automate order processing tasks. By doing so, we're not just reducing the possibility of errors or minimizing lead times. We're also optimizing inventory levels and enhancing order accuracy and promptness. The ripple effect? Improved customer service, increased operational efficiency, and a competitive edge in the marketplace. So, are you ready to take your order processing management to the next level?

5 Steps in Order Processing Workflow

Order processing management typically involves five steps, which may vary based on specific organizational requirements but generally follow a consistent pattern:

• Order placement: When an order is placed, it's sent to an order management system that decides the best warehouse location to ship from based on delivery address and stock availability. This helps save time and lowers shipping costs. If needed, an order may be fulfilled from multiple locations for timely delivery. If an item is out of stock at one location, it may be sent from another to avoid delays.
• Order Processing: After the orders are submitted, they undergo a verification process to guarantee their precision and legitimacy. This procedure entails checking the availability of the products, validating customer information, verifying pricing and discounts, and ensuring that the order adheres to any specific prerequisites or conditions. At this point, the inventory is also examined, and the order cost is accurately calculated. Order processing errors can cost companies up to 50% of their profits .
• Order fulfillment: Once your order has been authenticated, it transitions into what we call the 'fulfillment stage'. This is where the actual pick, pack, and shipment of the product occur. In this stage, the order comes to life, moving from a simple customer request to a physical package ready for shipment.
• Order tracking and delivery: After preparing the order for shipping, it gets a tracking number. This lets the business and customer check the order's status, from shipping to delivery. It may show estimated delivery dates, carrier details, and real-time location updates once the order reaches the customer. The last step is confirming the delivery, ensuring the customer received the correct, undamaged product.
• After-sales support: After the order delivery is confirmed, there may be post-order support, including invoicing, payment processing, handling returns or exchanges, and addressing customer issues.

Further Reading: Sales Order Processing: Definition and how to optimize it for your business?

Effective order processing management is an indispensable element for businesses to meet customer needs, reduce errors, guarantee timely delivery, and uphold customer satisfaction. The process typically entails utilizing order management systems, and inventory management tools and collaborating with shipping and logistics providers to simplify procedures and enhance operational efficiency.

Order processing factors

Does the notion of a "one-size-fits-all" approach to order processing resonate with you? It's doubtful. That's because the reality is far from it! The methods and priorities for processing orders can vary dramatically across different businesses, distribution centers, and carriers. Moreover, these are not arbitrary decisions but are dictated by several key factors. Intriguing, isn't it?

• Types of products: When it comes to shipping, not all products are created equal. For instance, perishable items like food or flowers often require special temperature and humidity-controlled conditions to maintain their quality during transit. While clothing might not need the same level of care, it's always important to consider the specific needs of each item before shipping them off to their destination.
• Order qty: When it comes to ordering in bulk, things work a little differently than with small orders. While your tiny package might be sent straight to your doorstep, bigger orders require a little more attention such as they might need to be shipped to a distribution center.
• Shipping packaging. It is important to note that not all items can be shipped in the same packaging containers. The size of the containers used can greatly impact how they are handled during shipping. Now, imagine for a moment, you're a manufacturer of a popular beverage, let's say, lemonade, which you sell in various volumes. You've got your standard 16oz bottles for the consumers, but then you've also got these massive 50-gallon drums and 250-gallon totes for wholesale customers. Can you just ship them in the same packaging? No, you can't simply because the packaging needs are vastly different for retail and commercial orders. The handling and transportation of larger volumes require special care and techniques. One would not simply box a 250-gallon tote like a 16oz bottle, would they?
• Individual Packaging: For the smaller retail orders, it's pretty straightforward. The 16oz bottles can be individually boxed and sent out for distribution.
• Bulk Packaging: However, a different approach is necessary when it comes to the 50-gallon drums and 250-gallon totes. These giant containers need specific packaging and palletizing methods to ensure they get transported without any mishaps.
• The efficiency of the team. Have you ever wondered if your team can handle the increasing demands of order processing? This factor can significantly influence the decision to integrate automation into the system.
• Seasonality: During busy shopping seasons, such as holidays, the order processing workflow becomes stressful. Employees need to handle more orders, leading to a longer processing time and delayed customer deliveries.

Types of order processing systems

How can you streamline the complex order fulfillment process, ensuring efficiency and accuracy? The answer lies in order processing systems. These systems are the backbone of your operations, capturing and storing all order-related data, ranging from existing inventory to shipment tracking, in a single, centralized database. The accessibility of this real-time information, on-demand, is a game-changer for all relevant business departments. Imagine your shipping department, for instance, can quickly ascertain which orders need to be dispatched and their respective destinations. Isn't that convenient?

So, what are the types of order processing systems available out there? Let's delve into the two main categories:

• Traditional order processing systems hearken back to a time when order fulfillment was a manual, labor-intensive process. All tasks, from scribbling down orders on slips to hand-packaging each order for the carrier company, were performed by hand by a dedicated individual or a small team. This same group would also be responsible for tracking all order and inventory data, a Herculean task in its own right.
• On the other hand, modern order processing systems embrace the power of technology. All pertinent data — inventory, customer profiles, and order processing tasks — is fed into specialized software. This approach significantly reduces the risk of human error while simultaneously expanding the potential for business growth and capabilities. Consider, for instance, a North American retailer effortlessly accepting orders from Europe online and coordinating shipping with a local fulfillment center. Now, that's the future of order processing!

Order processing management system advantages

As a business owner, you know how important it is to keep your customers happy. That's why order processing systems are a game-changer. With these systems, you can easily keep track of all orders from start to finish, ensuring that nothing falls through the cracks. This means fewer mistakes and more accurate packing and shipping. Plus, your customers will appreciate the peace of mind of knowing their orders are in good hands. And when your customers are happy, they're more likely to come back for more – and tell their friends about your fantastic service!

Companies with efficient order processing systems have 3x higher customer retention rates.

Order processing management system disadvantages

Although utilizing order systems can be advantageous, there are certain downsides to consider. In particular, highly advanced or overly intricate systems may demand additional specialized personnel to ensure optimal performance, resulting in increased implementation expenses. Furthermore, on-premises order management software can lead to significant upkeep costs, which may require additional IT personnel. In the event of an error, it can be challenging to locate the root cause, as the software program automatically captures order processing data and is not manually entered by a warehouse worker, who could otherwise retrace their steps.

Top 9 strategies for enhancing your order processing management

Isn't it fascinating how, despite each company's order processing procedures being uniquely tailored to its business operations and customer needs, we all share the common end-game of maximizing accuracy, cost efficiency, and productivity? Let's delve deeper, shall we? Here's a collection of nuggets of wisdom to turbocharge your order processing management and bring those coveted goals within your grasp:

1. Use Demand Forecasting

Understanding the patterns of your busy and slow seasons is crucial for effectively managing your workflow. By accurately forecasting demand, you can strategically allocate resources such as hiring seasonal workers and increasing order quantities to meet your customers' expectations. This proactive approach can significantly enhance the efficiency of your operations.

2. Mastering Workflow Efficiency

For any business to operate effectively, it is crucial that all the various components work seamlessly together. To achieve this, it is recommended that workflows are closely monitored continuously, aiming to identify areas that can be streamlined. Additionally, when it comes to communication, it is essential to simplify the process wherever possible. By doing so, decision-making can be accelerated without compromising on accuracy.

3. Automation

Automation benefits businesses by saving time and money, simplifying worker tasks, and enhancing customer experience. It mainly improves shipping and order fulfillment processes.

• Shipping: Automation selects the cheapest shipping option considering factors such as inventory, destination, package weight, and size. It also sends automatic notifications to customers regarding tracking and delivery confirmation.
• Processes: Automation simplifies inventory picking and sorting and improves communication among key order processing personnel. It can generate task lists for pickers, sorters, and packers and helps avoid mistakes and employee burnout.

4. Inventory Accuracy

Managing inventory is crucial for businesses to ensure smooth and efficient order processing. By maintaining up-to-date and precise inventory data, companies can guarantee that customers receive their orders in a timely and accurate manner. However, relying on outdated or manual inventory tracking methods can significantly slow down operations and create room for errors. While manual organization systems that require manual grouping, labeling, and counting of items can be implemented, they are often time-consuming and prone to mistakes. To overcome such challenges, businesses can adopt automated inventory tracking systems that streamline the process and minimize the possibility of errors.

5. Partial Order Processing

Have you ever placed an order and only received part of it? It can be frustrating, but sometimes it's just not possible to fulfill an entire order in one shipment. Take a pencil manufacturer, for example. If they're low on stock, they may only be able to send half of an order for 1,000 pencils to an office supply store. But don't worry, the manufacturer can still process a partial order so the store can have items to sell, and they'll send the rest when it's available. Plus, this flexibility can actually improve shipping efficiency. So if part of your order is coming from a nearby fulfillment center and the other part from our warehouse, we may split the order into several shipments to get it to you faster. At the end of the day, our goal is to make sure you're satisfied with your order, and that sometimes means sending it out in parts.

6. Customer Communication

It's important to communicate and assess customer satisfaction throughout the entire order processing workflow. Informing customers about the status of their orders can give them a sense of control and make them feel more involved in the process.

7. Inventory Control

In addition to predicting market demand, inventory control is crucial in ensuring optimal stock levels. It helps prevent situations where a company may have an excess or shortage of stock. Effective inventory management can lead to significant cost savings by enabling a business to purchase only the necessary volume and selection of products that can be sold. To achieve efficient inventory control, companies must incorporate various data points, including recent purchases, reorder rates, customer satisfaction, and turnover. By leveraging these metrics, businesses can make informed decisions and ensure their inventory is continually optimized.

8. ERP Integration

An enterprise resource planning (ERP) system can automate business processes by collecting critical business information from all departments into one central database. By integrating order management modules with the broader ERP system, it becomes easier to monitor and prioritize customer orders as they come in. This leads to faster order processing and an improved customer experience.

9. Implement Barcode Scanning

Barcode scanning can be utilized by pickers to effectively minimize the occurrence of picking errors. This is achieved by immediately alerting the concerned teams whenever an incorrect item is scanned. Such a reliable and precise inventory management method ensures efficient and accurate delivery of products to customers.

How to effectively manage order processing?

Do you grapple with more orders than you can efficiently manage on a simple spreadsheet? Well, you're not alone. You see, Excel spreadsheets can be woefully inefficient when you’re handling a large number of orders daily. That's where specialized software enters the picture, becoming the game-changer and significantly elevating your order processing management.

Let me introduce you to Brahmin Solutions, a cloud-based manufacturing software that packs a powerful punch with its comprehensive features for order processing management. Crafted specifically for the needs of small and medium-sized manufacturers, Brahmin Solutions aims to streamline your operations, enhance efficiency, and grant you a better hold over your order processing workflows. But how does Brahmin Solutions manage to accomplish all this? Let's delve into it.

Central order management

At Brahmin Solutions, we have a platform that makes it easy to manage all the steps involved in processing orders. You can keep track of customer orders, see how far along they are, and even check to see if we have the products in stock. This helps us avoid mistakes and makes sure that your orders are handled quickly and accurately.

Inventory management

With Brahmin Solutions, you can keep track of your inventory and make sure that you have enough products to fulfill your orders . Brahmin Solutions also helps you prioritize urgent orders and ensure they are delivered on time by automatically reallocating the necessary resources.

Brahmin Solutions provides real-time inventory tracking, which means you always know exactly how much stock you have, what materials you need, and how many finished products are available. This helps you avoid running out of stock, use your inventory more efficiently, and ensure your orders are delivered on time.

Production planning

With Brahmin Solutions, you can plan and schedule your manufacturing tasks effortlessly and efficiently. This powerful tool empowers you to prioritize your orders, seamlessly track their progress, and meet customer delivery deadlines without breaking a sweat. Streamlining your workflow can enhance production efficiency, skillfully navigate bottlenecks, and ensure you're deploying your resources effectively. In essence, Brahmin Solutions is your one-stop-shop for getting the job done and done well.

Integration with the industry's best business tools

Brahmin Solutions works with well-known business platforms like Shopify and QuickBooks Online, making it easy for you to sync your orders. By using these integrations, you won't have to enter data anymore manually. This ensures that your financial records are accurate and that your inventory and order information are always up to date, no matter where you sell your products.

Brahmin Solutions has valuable tools to help you understand how well you process orders. You can see reports on past orders, how quickly you make things, and how much stock you have. This can help you find problems, see patterns, and make better choices based on data to improve how you process orders.

If you want to test out Brahmin Solutions, schedule a demo call with a product expert to see how it would help your order management process.

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Customer Order Management and the Customer Experience

By Diana Ramos | February 12, 2019 (updated July 29, 2021)

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The process of attracting, approving, processing, fulfilling, tracking, and earning money from customer orders is the lifeline of B2C and B2B business. Your order fulfillment process is an integrated activity that touches every business service and requires merging traditional supply chain management with customer service, sales, and marketing activity. Developing customer order management (COM) processes and leveraging a COM system are prerequisites for profitability.

This article explores customer order management as a business process that improves the customer experience. In addition to information on COM-related careers, you'll find expert insight on customer order management technology, including the importance of customer order history, performance metrics, and customer order status tracking — plus, free customer order management templates to plan and organize your COM process.

What Is Customer Order Management?

Customer order management (COM) refers to the business processes and services involved in ordering goods and services — purchasing, processing, fulfilling, shipping, delivering, and following up with the customer. COM systems are information systems that are integrated on a network with enterprise resource planning (ERP) systems or order management systems (OMS). A COM system provides direct order data, like pricing, discount, markup standards, and product availability to internal business services and to the customer.  

Like OMS, integrated customer order systems are flexible enough to manage order-to-cash (O2C) and purchase-to-pay back office accounting services, like online payment processing, accounts payable/receivable billing, and inventory management. These systems price items from a wide array of discount and markup rules. For more information about the order management process and OMS, read “The Essential Guide to Order Management.”

The Benefits of Customer Order History Management

The goal of customer order management (and the technology behind the process) is to deliver customer orders in a profitable, reproducible, and trackable manner. COM functions as a component of a coordinated supply chain , where the distributed order fulfillment process meets sales, marketing, and customer service strategies. Analyzing the data recorded and organized in modern COM systems provides real-time insights into product profitability and supply chain performance metrics. Your ability to track and analyze metrics such as fulfillment rates and customer service statistics (like response time) relies on accurate, up-to-date customer history data.

Recording and analyzing customer order history is an essential function of customer relationship management (CRM) . COM software includes service portals that integrate CRM databases with order fulfillment functions to track order history metrics. These online portals provide customer service representatives (CSRs) with access to real-time order history metrics (for example, order backlogs) that are displayed on a dashboard arranged by customer. The purpose of tracking customer order history data is to combine customer experience strategies with order fulfillment details and supply chain metrics in order to strengthen customer relations.

Customer Order Management Features

COM software captures complex order history data in one shot, without the need for manual entry intervention or reporting. And, the software performs this task more accurately than a staff member would by tracking data in Microsoft Excel. This capability provides real-time insights into customer order history, like the status of an order in the fulfillment cycle. Automated document management features integrate with large ERP systems to merge customer order history data with back office general ledger accounting. This capability offers precise control over data in order to help manage product and service profit margins or customer credit terms.

In addition to furnishing advanced order history data analysis, COM software provides web-based modules (software applications) that have features to manage the following business capabilities:

Mobile Customers : Mobile software applications allow suppliers and customers to check inventory availability, track order status remotely, manage delivery details, and print picking, packing, shipping, and delivery documents on wireless devices.

Document Management : COM applications automate customer order documentation with web-modules in order to create quotations, issue credit memos, create purchase orders (POs), and manage call-off orders or blanket PO (a PO with multiple delivery dates over a period of time) invoices. The software removes manual steps, like creating and recording warehouse documents (such as inventory pick tickets and packing lists) by sending automated email notifications with electronic PO order documentation, thereby minimizing time and material waste and eliminating the need for faxing and archiving physical documents.

Direct Fulfillment : Amazon Launchpad defines a direct fulfillment vendor as a company that ships individual goods from a U.S. warehouse directly to a customer when Amazon does not stock the desired product. Automated inventory management is a COM strategy that ensures no sales are missed and that customers continuously order products in a real-time, reactive supply chain.

Shipping Schedules : Web-based COM software provides shipping features capable of managing third-party carriers, finding blanket order rates on high-value products, and managing international shipping schedules and customs. These features eliminate the need for separate shipping applications and accounts.

Product Configuration : COM software provides content management capabilities that facilitate configuring changes to product packaging, pack size, freight dimensions, or product descriptions across different databases and e-commerce applications.

Packing Slip Template

A shipment includes a packing slip and a sales invoice. A packing slip lists the items a customer ordered along with the items that actually shipped. Delivery is a critical stage in the COM process as well as the customer experience. This free packing slip template allows customers to quickly see any discrepancies in their order and verify that the order is fulfilled as expected. Consider using COM software with automated document management capabilities to improve inventory management and planning and reduce the chance of data-entry errors.

Download Packing Slip Template Excel | Smartsheet

Blanket Purchase Order Template

A blanket purchase order (PO) is an agreement between two parties for multiple deliveries over a set time frame. Use this template to manage your customer order history and add your own price terms, as well as include order information and authorization signatures. If special pricing is part of the deal you’re conducting, add the order details, terms, and conditions of the blanket PO purchase agreement.

Download Blanket Purchase Order Template

Excel | Word | PDF

Careers in Customer Order Management

Customer order management careers are competitive and challenging. They require a variety of skills and responsibilities that merge the traditional processes and activities of the supply chain with customer service in the digital economy. Customer order management professionals engage in business activities such as inventory allocation, purchasing, sales order management, account-based marketing, warehouse management, and marketing activities (e.g., advertising, promotions, and market research).

A job description for a customer order specialist might list responsibilities and desired qualities like the following:

Must have strong business acumen

Must be able to communicate order and inventory status using EDI, COM web portals, and e-mail

Must be able to make product sales

Must coordinate warehouse logistics and return and refund processing

Must conduct customer experience follow-up surveys

Backgrounds in fields such as supply chain management, customer service, human resources, information technology, data and analytics, sales and marketing, and hospitality are well represented.

The search term “customer order management” yields a list of 150,000 COM-related jobs on the job site indeed.com , including the following:

Customer service equipment management

Customer order management specialist

Customer service order entry specialist

Electronic data interchange (EDI) specialist

Order processing and sales support specialist

Order process management supervisor

Order processing coordinator

Customer order management representative

Customer order fraud specialist

Customer champion

How to Improve Customer Order Management and the Customer Service Experience

Creating value for your customers is at the core of your business services and operational design. If your decision making is customer-centric, you meet customer demand better than the competition. Order management is a function of a coordinated supply chain; in the digital economy of the information age, supply chain processes and technology integrate with customer service performance.

Customer order management is order fulfillment in collaboration with customer service activities. To survive and thrive, you must organize every action in an integrated supply chain — purchasing, producing, distributing, fulfilling, shipping, and delivering products — around the customer experience. Better, faster, and cheaper COM strategies enable a profitable supply chain.

Steve Smith is the Managing Director and U.S. COO for Esker , a company that provides cloud-based, on-demand, and on-premises document process automation software solutions to automate accounts payable, order processing, accounts receivable, purchasing, and more. Smith believes that implementing an integrated COM solution (i.e., software applications or a system connected with your ERP/CRM systems) impacts the customer experience. Automated features and machine-learning capabilities, like Esker’s AI-driven order management platform, reduce manual order entries and provide superior, more efficient communication.

“Giving the customer quick access to their order status, along with the ability to make changes if needed, will greatly enhance the customer experience and reduce the amount of status update calls that the members of the order entry team receive. This approach will substantially improve the job experiences of order entry staff, because they will spend less time entering orders and dealing with irate customers and more time on value-add tasks that can also improve the customer experience,” says Smith.

Smith believes that leveraging automated COM technology can indirectly provide a customer experience strategy that spurs growth: “Your order entry team can make better use of their time by focusing more on improving your customer experience. Doing so is proven to help companies grow their business. Your employees will enjoy their jobs more, an attitude which carries over to your customers as well.”

The Fundamentals Of Effective Customer Order Management Performance

Understand what the customer wants, make or purchase the product package, ship the product, track the delivery to completion, and follow up with the customer — an effective customer order management process and technology supports these steps to adds value to the customer experience. The fundamentals of COM are rooted in order fulfillment logistics and the supply chain activity they support. These fundamentals include the following elements:

Customer Demand : The COM system you leverage is capable of making your supply chain more efficient — the amount of improvement is dependent on the type of COM process and the type of data it receives. Within your COM system, communicating customer order requirements accurately and consistently is a key element of efficient order fulfillment. This communication process starts with the sales and customer service employees responsible for order processing and extends to the logistics managers accountable for verifying that the company fulfills the order correctly and meets customer preference for shipping and delivery.  

Integrate Channels : Integrate your COM system with all of your order channels to provide (and meet) realistic order promises that you make to your customers. Your COM software needs to communicate the same real-time inventory availability and pricing to customers shopping online as well as to your sales reps in the field. Consolidate your order channels by selecting COM software that integrates with your existing inventory management system, or consider a COM system that acts as an end-to-end platform integration for your entire order management process. To reduce order entry mistakes that lead to lost sales and inaccurate inventory, use cloud-based COM software that automatically tracks orders against real-time inventory availability and syncs data, including order pricing and specifications, with mobile applications.

Surrender Delivery : The goal is to get the product to the customer, and how that happens might be in the hands of the customer. Empowering the customer with the ability to control delivery assignments (for example, by type of carrier and shipping schedule) gives them access to customization, a popular method for enhancing the customer experience. Delivery customization is a value-added marketing and logistics service that Amazon made famous with its online ordering process. Amazon customers embrace this feature because the company’s software automatically weaves their information into the order process; customers know that to finalize their online order, they choose from a list of custom delivery methods.

Acknowledge Orders : COM software provides tracking information throughout the order management process lifecycle via both internal and external automated notifications. Today’s customer expects a high degree of visibility into their orders. One way to increase this level of visibility for the customer is to add a post-delivery fulfillment acknowledgment of the customer order. Using a COM system with CRM capabilities, you can perform the following tasks: track data on customer order history, send an automatic 30-day follow-up email, make product recommendations based on a previous purchase, and ask for participation in customer service surveys to track important COM metrics.

Delivery Receipt Template

Use this free template to manage customer orders and verify that a shipment has been delivered. The template includes space to add inventory items, customer and supplier contact information, and a recipient signature. Add your company logo or additional details to customize a receipt.

‌ Download Delivery Receipt Template - Word

What Is Customer Order Processing?

Customer order processing refers to the sequential activities involved in order fulfillment, from order entry to product delivery. This process lives within the supply chain management ecosystem. The fundamental business services that make up order processing concern the following supply chain practices:

Order placement and data entry

Payment processing

Order fulfillment

Inventory and warehouse management

Picking and packing

Shipping and delivery

Carrier control

Customer order tracking

Returns and refunds

Customer Order Process Workflow

Software developers use the customer order process sequence of supply chain and customer service activities (or tasks) to build distributed COM applications that mimic and enhance the process. Doing so ensures that the COM application will notify everyone involved in the workflow at the appropriate time and that it will activate the next order fulfillment step in the proper sequence.

Amazon Web Services (AWS) defines a workflow as a mechanism to execute a number of distributed application tasks asynchronously. Amazon Simple Workflow Service (SWF) is a workflow management service in AWS. Using the customer order processing workflow as an example, developers can build distributed COM software applications that manage multiple order processing activities asynchronously. These apps can also handle processing activities with multiple computing resources, such as inventory management systems and accounting software, as “sequential and parallel as needed.” The customer order processing workflow of this COM software would include the following workflow steps:

A customer places an online order.

The application verifies the order in a separate environment.

Once the app verifies the order, the payment processing application charges the customer.

After the payment is processed, the warehouse receives the order and picks, packages, and ships the order.

The software records the workflow history in a database and the workflow ends with a successful delivery event.

The data that the customer order processing workflow generates and the information that the COM software records in a database are helpful in determining performance metrics. You use these metrics to audit your COM process and assess its impact on customer experience. Managing and analyzing this data is a valuable component of an effective COM strategy.

Customer Order Metrics: The New Customer Voice

The information age, spawned by the internet and wireless networks and the growth of e-commerce, has increased customer demand for quick, responsive order capabilities. However, the use of fragmented software that lacks integration across all COM process activities makes it difficult to access the valuable customer service information that empowers this accelerated responsiveness. Subsequently, the dearth of accurate, real-time information and COM systems and processes that help manage this data makes it challenging to control the order processing workflow. Challenges with managing internal workflows lead to customer service problems and poor customer experience.   

Implementing COM systems that exchange real-time data is the first step in managing customer orders. The ability to share information in the form of key performance indicators (KPIs) provides a different perspective on how your supply chain impacts the customer experience, thus, giving a new voice to COM problems. COM systems designed with segmented channel management capabilities offer metrics to track performance and profitability by product, brand, pack size, channel website, and customer segment.

The new trend is to monitor and analyze metrics that show how customer order management processes (merged with marketing and order fulfillment data) encourage better customer service strategies. Such customer service strategies include order responsiveness and inventory quality management. And, these metrics include data such as the order fill rate, order lead time, order processing cycle time, customer returns and capability-to-promise (CTP), available-to-promise (ATP), and profitable-to-promise (PTP) processes.

COM vendors now offer customer support automation and CRM capabilities to help manage customer issues (like message-based online customer support queries) through digital channels. Technology trends like automated business intelligence and supervised machine learning provide a glance at the future capabilities of COM systems. Soon, COM systems will be able to generate customer service-related metrics that provide strategies beyond those related to internal manufacturing or supply chain performance KPIs:

Artificial Intelligence : Using advanced machine learning, the COM system improves the ability of your supply chain operations to deliver customer requirements, maintain the infrastructure required to fulfill orders, and provide data to align customer demand with inventory management. Computers may have the power to read a customer complaint message or request for help, generate an accurate, automated response, and send the customer a message that addresses the issue and provides the appropriate steps to return inventory and receive a refund.

Sentiment Analytics : Using data generated by supervised machine learning algorithms, future COM systems will share information regarding the following: what customers think about a new software update, the reviews customers create, and keyword optimization for digital advertising. This data will evolve over time to empower cost-saving customer service strategies. Automation and machine learning AI will eliminate the need for a customer to contact customer service via phone in order to address order status problems. The system will learn about repetitive order processing problems, inventory shortages, or delivery delays based on data fed to advanced neural networks and will predict the appropriate response.

Customer Order Metrics and Effective Order Management Process from the Pros

Nate Pave is Manager of Business Development at alligatortek , a software and application development firm. He’s helped corporate clients in supply chain operations solve key order management process challenges and performed custom OMS integration builds. Pave likes to ask questions about the order management metrics a customer wants.

“Do they want to analyze what’s selling vs. what’s not selling vs. what’s on backorder? Do they want to analyze how they’re receiving orders? If they’re integrated with an e-commerce system, do they want to know what’s in stock? All of these questions can help companies get more efficient and grow,” says Pave. “The key is to know your company’s (order) process from the minute the order is placed to the minute the order is delivered.”

Pave identifies data collection and the use of supply chain metrics as popular trends in his business: “People are using more and more data to get better and make predictions. What’s coming out of their system? What do they need to order more of? What items do people like? What categorical trends are taking place? Companies that can pick up trends right before they blow up and be ready for them are the ones dominating the marketplace,” he concludes.

The data analytics ethos of garbage in/garbage out applies to COM system data. These systems need accurate product information, standardized sales channels, and order entry configuration to generate useful metrics. For manufacturers, COM metrics provide access to data that highlights incomplete planning and production processes. Order processing data generated by integrated COM systems communicating with ERP databases provides demand forecasting metrics and business intelligence that empower cost-saving strategies like aggregate order processing and lean manufacturing methods.

Customer Order Tracking Solutions for Improving Customer Experiences

In the context of the digital economy, the customer order tracking capability shifts the balance of power from internal priorities to customer expectations. Wireless networks, mobile applications, and the computing power of smartphones give customers more choices for following order status and an amplified voice (i.e., social networks) when order problems surface. Your order tracking process — and the technology you choose to manage it — is essential to selecting COM software or integrating an end-to-end COM platform.

David Altemir is President and Senior Consultant of Altemir Consulting . His company provides services including system selection, planning and implementation, project management, existing ERP optimization (data cleanup, production scheduling, inventory management, MRP purchasing), and sustained training and support in lean manufacturing, supply chain, engineering, and information technology.

“The detailed requirements for customer order management vary depending on the nature of the business,” says Altemir. “(We) focus on manufacturing. For manufacture-to-order and engineer-to-order businesses, we look for ERP systems where the customer order can be used to capture the customer’s desired delivery date and provide a regularly updated estimated completion date (ECD) on a line-item-by-line-item basis.”  

Altemir prefers systems that allow customer orders to organize and track different order statuses in searchable categorizes, such as “new” or “pending.”

“The ability to characterize the customer order (as new or pending) allows the company to perform a formal customer order review acceptance process (that) enables advanced tracking, so the customer knows where each order stands,” says Altemir. “This is an important and sometimes overlooked process because it ensures that only feasible orders are accepted and, in so doing, enables the manufacturer to reliably make decisions. Unfortunately, many systems do not have these features, so it is crucial to know what you’re looking for when selecting an order management system,” he emphasizes.  

According to Altemir, existing systems can be customized at the database or reporting level to augment existing systems and provide this missing functionality. “For manufacturers, the customer order is the thing that drives manufacturing and material requirements at the top level,” he says.

“It’s also typically accessible to customer-facing employees that need to be able to report on the progress of open orders. For these two reasons — customization and accessibility — the ability to maintain two separate dates for each customer order line item is useful because one date (initially set at the time of order entry) drives demand, whereas the other date captures feedback from the shop floor to assess the up-to-date schedule health of each order,” Altemir points out.

B2B Customer Order Status Tracking and Customer Experience

Managing the customer's ordering is at the core of ERP systems. From order processing and fulfillment activity to material management (manufacturing), account billing, and cash flow, the flow of orders — from inventory to customer — must integrate with all the systems involved in managing and fulfilling customer orders. COM software vendors and large ERP platform providers develop their order management applications to serve as a single source of information to manage and analyze customer order processing workflow tasks and data.

The ability to track order status is as important to B2B suppliers as it is to B2C customer satisfaction. Customers want insight into where the order is at every stage, and the customer order tracking applications designed for B2B systems provide customers with answers to tracking-related questions by using automated workflow notifications. These tracking apps share information about the order fulfillment stage, missing inventory tracking, warehouse location tracking, delivery status, and shipping notifications. Rather than providing partial order fulfillment visibility, the best COM tracking applications are holistic, accounting for every line item of a purchase order. Order tracking software that merges customer service and supply chain functions provides a customer with the following functions:

Integrated order tracking notification with internal information systems or customer-facing, web-based applications (for example, a WordPress e-commerce website)

Automated order confirmation and status notification email templates with opt-in, opt-out, and data privacy notices

Order status categories that are searchable by a tracking number that has shipping carrier API integrations (that is, back-end tracking systems provided by UPS and FedEx that link via email to the order status tracking page of the carrier’s website)

Supplier system integration for spreadsheet-based orders

For sales reps, customer service notes management with custom fields and styling options for exporting data

Customer Order Status and the Bottom Line

Simply put, if you don’t match the needs and expectations of your customers, they will buy from another business or supplier that delivers the product with the anticipated value. Some of the most advanced levels of major retail operations, such as Walmart and Amazon, use COM process and order management technology that places the demands of the customer and supplier at the forefront of supply chain operations. By focusing on value-add logistics and COM processes, these retail behemoths influence when a product is available for purchase and where it is located in proximity to the customer.

Customer service matters to every logistics manager, supply chain specialist, and warehouse robot, too. The efficiency of an automated Amazon warehouse robot moving product around a warehouse at all hours of the day or the data a supplier receives regarding an out-of-stock product when they’re searching Walmart’s Retail Link application is passed on to the customer’s experience by the value added in these services. In these examples, apps reduce the time it takes to process, ship, and deliver a customer order — as well as make sure it’s available in the first place. The efficiency of COM software applications also extends to the direct communication involved in managing customer order status.

“You don’t want to play telephone and have multiple people touching an order each time,” says Pave. “You want to get your customer what they want in the most efficient way possible. If you can set up your order system so that it automates as much as possible and eliminates double data entry and any risks for human error, you will be set up for success: shorter delivery times, higher customer satisfaction, higher rate-of-repeat orders, and more frequent orders.

“Employee satisfaction also plays a part in the bottom line,” says Pave. “Turnover is expensive. If employees spend less time on busy work, they have more time for high-value work. They become happier, more empowered, and more productive, which will increase employee satisfaction and lower the employee turnover rate,” he concludes.

Build Powerful, Automated Customer Order Management Processes with Smartsheet

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Understanding Order Processing: Key Steps & Tips for Improvement

19/07/2024 09:00

In today's digital age, ecommerce is rapidly expanding as one of the fastest-growing industries. To meet this growing demand, businesses must enhance their order processing workflow—from the moment an order is placed to its shipment—ensuring customer satisfaction and fostering loyalty.

What Is Order Processing?

Order processing is a crucial component of order fulfillment, ensuring customer orders are accurately prepared and delivered to the correct location. Depending on the size of a business's operations, order processing can occur in a distribution center or warehouse, where pickers, sorters, and packers collaborate to achieve order fulfillment, or it can be done by a single person or a small group.

What Is Order Processing Software?

While order processing can be done manually with pen and paper, the increasing complexity that comes with a growing company makes manual methods less feasible. Order processing software reduces the likelihood of human error and guarantees customer satisfaction, irrespective of the scale of the operation.

Order processing software manages and disseminates order data, verifies stock availability, and monitors order delivery. This helps ensure orders are filled accurately and on time. An order management system (OMS) can be integrated with other software, like billing and accounting, to combine order processing and related tasks in one centralized platform.

Order Processing in Detail

Order processing is the sequence of actions that take place after a customer submits an order. This begins by verifying product availability, followed by picking items from inventory and directing them to a sorting area. This starts with confirming the products are in stock, then picking the items from inventory and sending them to a sorting area. Next, each individual order is compiled, carefully packed, labeled, and shipped to the customer’s address, either directly or through order consolidation.

5 Steps in Order Processing Workflow

Order processing consists of five primary steps, from order placement to delivery. Here’s an outline of the standard workflow:

1. Order Placement

When the business receives a customer order, order details (including items, quantities, shipping details, and delivery addresses) are typically sent to an order management system. If the company has several fulfillment centers, the OMS will automatically determine the appropriate warehouse location to ship from, based on the delivery address and item availability. This aids in minimizing transit times and delivery expenses. 

2. Picking Inventory

This is the process of collecting specified quantities of items from inventory to satisfy customer orders. Order picking must be highly controlled because it directly influences the productivity of the overall order processing workflow. Organizations employ different picking strategies, including:

• Piece picking: Each picker collects products for one order at a time.
• Zone picking: Each picker is responsible for items within a warehouse zone, collating all items at the end.
• Batch picking: Pickers collect products for several orders simultaneously in batches.

Picked items are separated according to their destination. If zone or batch picking strategies are used, each item must be sorted into its respective order before packing and shipping. Sorting is essential for accuracy and customer satisfaction, ensuring all ordered items are present and in good condition.

This involves protectively packing items into appropriate shipping boxes, weighing the packages, and labeling them with recipient addresses and delivery instructions. Whether custom packaging or plain shipping boxes are used, it’s important to prioritize dimensions and weights that are easily handled and cost-effective.

5. Shipping

This is the process of transporting orders to their final destination. Orders can either be shipped directly to the customer or consolidated with other orders going to nearby locations to cut costs. Reliable tracking systems are crucial so both businesses and customers can monitor orders.

After delivery, companies typically reach out to customers to confirm their satisfaction. Effective order processing — delivering items accurately, timely, and safely — increases the likelihood of customer satisfaction.

Order Processing Factors

Order processing methods and priorities differ across businesses, distribution centers, and carriers, depending on factors such as:

• Product Nature: Perishable items need specific shipping conditions, while non-perishable items like clothing do not.
• Order Volume: Bulk orders are packed and handled differently than small orders.
• Shipping Packaging: Packaging size affects handling; for example, large commercial containers require different approaches than smaller retail packages.
• Workforce Productivity: The ability of a workforce to keep up with order processing needs may dictate whether to incorporate automation.
• Seasonality: Busy shopping seasons can stress the entire order processing workflow, potentially delaying customer orders.

Types of Order Processing Systems

Order processing systems help make order fulfillment more efficient and accurate by capturing and storing order-related data in a central database. There are two main types:

• Traditional Systems: Rely on handwritten files and manual labor. All tasks are done by hand, usually by a small team responsible for tracking all order and inventory data.
• Modern Systems: Technology-centric, with all data fed into specialized software. This minimizes human error and expands growth opportunities. For example, a retailer can accept international orders and coordinate shipping with local fulfillment centers seamlessly.

Order System Advantages

Order processing systems enhance the customer experience by improving order tracking, sorting, and packing accuracy. They prevent lost or misplaced orders, providing a reliable shopping experience that encourages repeat business and positive recommendations.

Order System Disadvantages

Highly technological systems might require specialized personnel, making implementation costly. On-premises software brings significant upkeep costs. If an error occurs, it can be challenging to track since data is automatically captured, not manually entered.

12 Tips to Improve Order Processing

1. Workflow Efficiency: Continuously track workflows to identify areas for refinement. Simplify communication to expedite decision-making without compromising accuracy, ensuring smoother operations and quicker order fulfillment.

2. Automation: Implement automation to save time and money, ease workers' tasks, and enhance customer experience by optimizing shipping functions and overall order fulfillment processes.

o Shipping: Automate selection of the most cost-effective shipping options and automatically send customer notifications for tracking and delivery.

o Processes: Automate picking and sorting tasks to streamline workflows, reduce errors, and prevent employee burnout.

3. Demand Forecasting: Analyze customer profiles and past buying trends to predict future demand, allowing for more effective planning, budgeting, and order processing goals.

4. Stock Level Accuracy: Maintain organized and precise inventory data to enhance order processing efficiency, ensuring customers receive their orders quickly and accurately.

5. Warehouse Management: Utilize a warehouse management system (WMS) to oversee all warehouse-related tasks from a single location, boosting productivity and reducing costs.

6. Partial Order Processing: Implement partial order processing to fulfill parts of an order when the full order isn't available, enhancing shipping efficiency and customer satisfaction.

7. Customer Communication: Keep customers informed about their order status to give them a sense of control and involvement in the process, thereby improving their overall experience.

8. Inventory Control: Employ robust inventory management controls to avoid overstocking or understocking, ensuring the company purchases only what is necessary, thus saving money.

9. ERP Integration: Integrate order management modules with an ERP system to effectively monitor and prioritize customer orders, enhancing processing speed and customer satisfaction.

10. Mobile Picking and Barcode Scanning: Equip pickers with mobile devices for barcode scanning to reduce errors and improve accuracy during the picking process.

11. Quality Control Checks: Implement regular quality control checks at different stages of the order processing workflow to ensure that orders are accurate and items are in good condition.

12. Employee Training: Regularly train employees on new order processing technologies and best practices to ensure they are equipped to handle tasks efficiently and accurately.

Order processing is vital for customer satisfaction and loyalty. Efficient workflows, supported by order processing software and systems, help businesses handle large volumes of orders accurately and on time. By following the tips provided, companies can enhance their order processing, improve efficiency, and boost customer satisfaction.

• Order Fulfillment

What is Order Management?

Every time you place an order with a store, there is a process that runs in the background until you finally receive your purchase. This process is called order management , which is basically keeping track of customers’ orders and handling the steps involved with fulfilling them. The process generally consists of accepting the order; picking, packing, and shipping the items mentioned in the order; and finally tracking them until they get delivered.

Read on to learn more about how order management works and how an efficient order management technique can help your business.

How does order management work: Order Management Process

Order management processes start right after a customer places their order and pays for it. The details of the order are sent to the store’s inventory, where warehouse workers manage the picking, packing, and shipping. The process ends with the store checking in with the customer to figure out if they were happy with their purchase. Here are the steps of a typical process.

Most order management processes can be broken down into 3 stages: receiving a customer’s order, fulfilling the order, and then handling the after-sales processes. Let’s see how each stage works in detail:

Stage 1 – Receiving the customer’s order

The first stage of any order management process begins when a customer places an order with your business. Receiving includes accepting the order from the customer and collecting payment for it. After this is done, the details of the purchase are forwarded to your warehouse so your staff can start working on getting the products ready for shipment.

Stage 2 – Fulfilling the customer’s order

In the second stage, you actually fulfill your customer’s order. This stage can be split into 3 different steps:

Step 1 – Picking

Fulfilling an order starts with the picking process, in which the items are retrieved from the warehouse. Warehouses are usually lined with shelves that are each stocked with different types of products, so warehouse workers need to be able to pick the right items for an order quickly and accurately. Once the items have been picked, they are sent to a packing station to be packed.

Step 2 – Packing

The packing station has more responsibilities than just packing items and sending them off for shipping. They are also in charge of using the right packaging materials for each product so that it reaches the customer intact and in good condition, while also using resources efficiently. For example, extremely fragile items like glassware need to be packed with bubble wrap or air pillows, and in a properly-sized box to avoid wasting packing material.

Step 3 – Shipping

After you’ve picked and packed the correct order, the next step is to ship it. The warehouse employees working at the shipping station typically take care of 3 tasks:

• Attaching the applicable shipping label and invoice to the order
• Marking the order as shipped in all of your sales channels
• Sending out shipping confirmation and order tracking emails to the customer

Picking, packing, and shipping can only happen in that order if your business has the necessary products in stock. So what do you do when a customer places an order for a certain product, but you’re out of stock? In cases like this, businesses are left with two choices: they can either turn the customer away or postpone the order delivery to a later date using backordering or dropshipping .

For backordering, the business places a purchase order with their supplier for the product that is out of stock. The supplier will give the business a date when they will receive the new stock, and in turn the business gives their customer a tentative date to expect to receive their order. With dropshipping , the business forwards the customer’s order to the supplier, who delivers the product directly to the customer without sending it to the business first.

Stage 3 – Handling the post-sales processes

The last stage of order management is handling the after-sales processes. This is where businesses follow up with customers to receive feedback and make sure that they are satisfied with their purchase, and to manage any returns and refunds if they are not.

All three stages together make up a typical order management process. Some businesses like to customize their order management strategy to suit their needs better. Order management is also applicable for businesses that offer services instead of goods, although the process is slightly different. For instance, consider a mobile network provider. Instead of having to pick, pack, and ship products, a mobile network company has to receive each customer’s request to activate a network, and then set it up on the customer’s mobile phone.

What makes order management essential for businesses?

An organized and well-planned process for managing orders can do wonders for a business’ cashflow and inventory. It can save time and money, tell you whether the different parts of your company are working together well, and help you forecast the demand your business will receive. Let’s take a look at each of these reasons.

Since every order management process is itself made up of several individual processes that need to coordinate with each other from start to finish, it can help give you an idea of whether the different parts of your business are working together or not. This is important so that you keep your business running like clockwork and deliver orders quickly, accurately, and efficiently with minimal chances of error. Therefore, a streamlined process can be translated into higher customer satisfaction.

Another benefit of using an order management process is that it can help you learn to predict the level of demand you will receive. Predicting your demand will help you avoid overstocking and understocking, because you will know just how much of each product you’ll need to supply to your customers. This keeps you ready to sell your customers the products they want, when they want them. Since forecasting your demand gives you an outline of your business’ requirements and expenses, you can also use this information to chalk out a budget to follow. Over time, sticking to this budget will help your business’ cashflow too, so predicting your demand is good for your inventory, customer retention, and profitability.

Everything from accepting orders and keeping track of them to fulfilling them and taking care of the after-sales activity is part of an order management process. A proper order management technique that helps each process follow a fixed budget, keeps the inventory well-organized, and saves time and money should be at the top of every warehouse’s list of priorities. If you haven’t already, analyze your business and see if you can benefit from an order management process.

A word from Zoho Inventory

Order management is an integral part of your warehouse processes as it forms the crux of how your customers receive their order. But as your business starts to receive more orders, handling all these processes manually could become a little overwhelming. This is when most businesses switch to using an order management system , like Zoho Inventory which manages all your fulfillment processes, simplif ies your shipping and tracking, and even lets you set up shop across multiple channels. With Zoho Inventory, you’ll be able to set aside more time to grow your orders, rather than just managing them. Try our free trial and find out how it can help streamline your order management processes.

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