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The Order Management Guide That’ll Transform the Way You Run Your Business

Boxing products ready for dispatching is a final step

If you aren’t getting consumers their orders quickly and correctly, they will find another company to order from.

Customers are always seeking the quickest and most reliable service possible when choosing a company to do business with.

If you want to give your customers the most positive experience, you are going to want to have a plan for order management.

Keep reading to learn what order management is, as well as how you can use it to help your business grow!

The Importance of Order Management

You may be asking yourself what the importance of order management is, or even what order management is.

Well, order management is pretty much exactly what it sounds like; tracking orders so that you can successfully fulfill them. Having an efficient order management system is important for creating a positive customer experience.

If your customers aren’t happy with the service they are receiving, they will most likely give their business to someone else and tarnish your reputation with word-of-mouth.

While order management does focus quite a bit on the ordering process, part of order management is understanding your customer. Knowing their past purchases, keeping their payment information on file, and tracking their order volume will make purchasing from you much easier.

Customers are always looking for a simple way to order, so making this easier for them will almost always guarantee customer loyalty.

The Order Management Life Cycle and Process Flow

You can find the order management life cycle in the supply chain management area of a company. The practices that make up this process flow are…

  • Placing the order and entering the data for the order
  • Processing customer payment
  • Fulfilling the orders
  • Managing the inventory and warehouse
  • Picking the product and packaging for delivery
  • Shipping the order and making sure it’s delivered
  • Controlling the carrier to ensure that order is not damaged
  • Customer tracking services
  • Returns and refunds of the order

Order management can be just one job, but many companies divide this responsibility up among a number of job titles…

Sales and Marketing- The sales and marketing team are in charge of attracting and keeping customers for order placement.

Customer Relationship Management- Keeping track of the sales and marketing methods used to attract customers as well as customer data.

Accounting and Back Office- This is where the payment options, order history, invoicing and receipts are taken care of.

Logistics and Warehouse- The warehouse is where the order is fulfilled. From there, the other inventory is tracked as well as the delivery of the order.

Information Technology- The behind the scenes work with the software being used for order fulfillment. Information technology also keeps track of the database for past and current orders.

Common Problems in the Order Management Process

One of the biggest problems when it comes to order management is messing up the delivery of a product.

This happens when the wrong item is sent out, or when the order is sent out late. While it may not seem like a big deal if this happens occasionally, over time your business will get a bad reputation.

Another sign of ineffective order management is data entry mistakes. People often get so busy trying to get all their orders done that they end up making sloppy mistakes. A common issue is writing in messy handwriting that gets translated incorrectly.

On top of data entry mistakes, it’s common to experience trouble with an outdated inventory. This results in backorders which are a huge inconvenience to consumers who are expecting an order by a certain time.

How Can You Improve Your Order Management?

While there are plenty of things that can go wrong in the order management cycle, there are also plenty of ways to avoid them.

Avoiding Backorders or Slowdowns

We’ve all been there; we are expecting an order and are excited to get it, only for it to be back-ordered or late.

This can be frustrating when we are eager to get our package, but it can also be problematic if we really needed that order by a certain time. Backorders and slow orders are going to quickly upset your customer.

You can avoid backorders or slowdowns by providing the sales or customer service staff with up to date information on inventory. Make sure they are in the loop, but if at all possible, make sure there’s a way for them to check the updated inventory regularly.

Speed Up Your Orders

If you’re looking to increase the efficiency of your business, speeding up order fulfillment is crucial.

Making sure you are working with the best order fulfillment company is your first step. Working with a group of experienced professionals in the fulfillment industry will guarantee quick, efficient, and quality work.

The programs that you are using to submit and track orders will also have a huge role in the order management cycle. If you’re using programs that are too complex and difficult to use, you are way more likely to experience hiccups.

Choose a program that is simple and convenient. If your employees aren’t needing to spend hours learning how to use new software, that is time they can spend selling products.

Decrease the Steps for Ordering

The more an order has to be entered into the system, the more room there is for error.

An order should only need to be entered into the system once before it is fulfilled. Manual steps that include re-entering data should be eliminated.

For example, when an online ordering option is provided to the consumer, the need to manually enter the order from the company is eliminated. This dramatically reduces the opportunity for human error.

On top of offering an online order option, supplying access to updates and order information to customers is essential. They should be able to track their order and have a time-frame for the arrival.

Take the First Step Today

Now that you understand the importance of an efficient order management process, don’t hesitate to find the best one for you.

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About The Phat Startup

The Phat Startup was created by Mike McOwen to create a space where entrepreneur lifestyle could be focused on. We tend to live a different lifestyle than most. Entrepreneurs tend to be interested in maximizing their life, not only their profit.

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PhatStartupsMike McOwen@PhatStartups·
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