Evaluating Order Management System (OMS)

For a retailer, order and inventory management used to be a simple exercise. Keep track of what sells in which store and replenish based on those statistics. Not any more. While multiple channels have ensured larger customer base and greater turnover, it has made managing orders all the more complex. However, with challenges comes opportunities.

As a retailer, this increased scale allows one to differentiate oneself in the market and become more cost effective. An efficient order management system allows a retailer to achieve the following:
- Minimize transport cost
- Minimize inventory cost

Below is a list of basic features under the above listed categories that an OMS should support.

Minimize transport cost

• Pick up nearest DC based on shipping address
• Avoid splitting of an order by sourcing it from a DC which has all the line items
• Distribute fulfillment across DCs considering their capacity to ensure efficient utilization
• Club multiple orders in single shipment wherever possible
• A means to objectively determine which is the best fulfillment alternative out of several alternatives

Minimize inventory cost

• Procure only when necessary
• Clear old stock first
• An alert on perishable items before their expiry dates so that they can be cleared by offering a discount
• Allow inventory segmentation so that one's priority customers are taken care of