Like mitochondria and the cell, the order management system is the powerhouse of the warehouse. It ensures everything flows correctly and effectively, minimizing issues and impacting the budget. Using your order tools to their fullest improves order operations and creates plenty of ways you can reduce expenses or eliminate costs. It’s all about learning the tool and seeing what’s available.
To help you reach that robust state, let’s look at a few top order management system tweaks designed to improve success rates and reduce error rates, which can save you significantly.
Increase scans and verification
Order management systems (OMS) have a lot of internal budget-saving options. These can be the reduction of errors by automating manual reporting and analysis. Flags can identify potential spoilage or remind teams to rotate goods. You can even monitor carrier success rates to understand if spending a little more per shipment would save in the long run because more orders arrive on time or are undamaged.
But let’s start by looking at the most potent weapon your OMS can leverage: the barcode scanner. Simply increasing the number of required scans and verifications in your OMS platform can go a long way to saving your budget.
A straightforward best practice is three scans per order during pick and pack. The picker scans the order once to initiate picking so that the OMS drives instructions and required goods. The picker then scans each item as they pick, forcing the OMS to verify on the go and delivering the next instruction only when they scan the correct SKU.
Then, when the packer receives the order, they scan every product a final time as items are placed into the parcel. That process helps you deliver packing rules for goods and makes them more likely to be followed. Your order management tools can also estimate order weight and box size, which members check at the packing station. These secondary verifications help catch if an item was scanned and then set aside.
Final verifications at your staging area use the OMS to ensure each carrier has the correct parcel quantity before loading a trailer. Review your workflows to see where your order management tools support scans.
Increasing the number of scans can likely reduce your error rate by single-digit to double-digit percentages. Each caught error saves your budget by reducing return logistics, replacement, and refund costs. A few saved orders are often all it takes to get into positive ROI territory based on increased labor costs. And automation via OMS requires people to follow smaller steps, which makes it more likely that they will embrace this change.
Automate simple steps
Order management tools come with various manual tasks that you can automate. Look for simple options that your logistics analytics software already supports or existing integrations and third-party plugins designed to combine your tools. These include automating order entries and linking sales to inventory status. Automation enables companies to verify they have the stock for orders, route orders to locations with the correct stock, or signal that a product is on backorder.
Order management teams often focus on the warehouse level. You want your tools to indicate when an order can be filled or when it’s time to restock. Don’t neglect to move in the other direction. Push low inventory-level notices to sales and store teams to allow them to update pages or marketing. Goods that start to accrue long-term storage costs reduce their value. Notifying leadership can spur decisions to push these SKUs differently and avoid increasing your storage budget.
Some of the steps you’ll want to focus on don’t initiate in your order management systems. For example, if you sell through a Shopify store, you’ve got targets to eliminate. Start by automating order information delivery, so no one needs to click the “request fulfillment” option. Whether you use a store plugin or an API to connect with your order management tools, fulfillment requests and calls to verify order status can happen automatically. This ensures that no manual tasks slow down your efforts and give you a chance to look for errors more easily.
Errors not only cost time but are often significant capital to fix. And you’ve got to work harder to get back up and reach those quarterly goals.
Combine your communication channels
There are a variety of OMS tools and plugins that allow it to integrate with your email or other communications. Use these. It’s especially important if the OMS supports complex transactions like freight forwarding, customs clearance, cross-border compliance, and multi-channel fulfillment.
You likely can look at any order and see who is involved. It might just be you and the supplier plus a local carrier if you have a regional manufacturer. As issues get more complex, consignees, origin agents, multiple carriers, and freight forwarders all play a role. Use your OMS to help manage these details and add contact information to every account so that it is attached to each order.
Supply chains are only getting more complex. Use your order management tools to ensure contacts and communications are readily available. Some alert customizations can auto-populate email text around a specific need or concern, so you just click on the recipient and hit send. Don’t neglect it as a valuable communications tool — and don’t let every vendor or option push you to an outside platform.
Integrate every supply chain point
Many efforts to improve order management systems focus on internal connections. You’ve integrated warehouse management and accounting to help track budget and cost. Linking to in-house assembly or production efforts makes tracking and ordering raw materials more accessible. Data-sharing with sales and marketing empowers them to address some slow-moving goods and tackle storage or spoilage costs.
In some cases, your order management system will do this for you through modules and APIs.
Don’t stop there. Look for automation and integration beyond the typical points. See how you can integrate freight services and carriers. Push your order management tool to follow orders across the entire lifecycle and automate calls to get parcel status updates and tracking details. The link that backs to internal teams to simplify customer support requests.
Connect with freight forwarders to track inbound similarly and automate alert delivery. Not only does this help you plan dock and door timing better, but it can identify times when you’ll need to increase or adjust labor for effective cross-docking.
Linking purchase orders to bills of lading plus relevant insurance documents and insurance paperwork helps you file claims more quickly when something goes wrong. Integrating these alerts also helps flag issues when a delay may cause a stockout. When you’ve got hundreds or even thousands of inbound items at any given moment, automation and data sharing give operational leaders enough time to identify and tackle problems.
Record more data for analysis
Most order management tools can be used simply or for more complex analysis and support. We set up a platform for the most direct use in many cases and then let it ride. When that happens, we miss a variety of tweaks that can help improve order and overall company operations.
An easy place to look here is at your shrinkage rates. Order tools such as a modern logistics dashboard often allow you to track returns, replacements, and refunds. Many inventory issues in these cases get lumped into shrinkage. But notes and classification systems available on many order management tools can give you a lot more detail. There are options to note when shrinkage occurs because of outbound or last-mile delivery. Was the product damaged in transit? Was the box fine but the product inside damaged? Did the customer not complain about damage, but the returned product was unusable?
Indicating these and other shrinkage causes (damage during inbound, storage, loading, etc.) can save your budget by training your team on how to address the issue. Parcel in-fill may need to be stronger to protect goods during transit. Rigid or reinforced boxes are often required to keep heavy and dense products safe. Are you stacking items too high or storing them in a way that causes damage during picking? Do company policies need to change to address returns where the customer causes the damage?
That’s just one small area where you can capture and use more information. Thankfully, many features and reporting tools can be turned on and associated with an existing action. Scanning a return could require your receiving team to fill out a form or select options before they can move on to the next order. Use the system to its fullest, especially when you’ve got a chance to capture useful, complex data.
One final tweak in order management systems is to use its ability to set alerts and reminders to your advantage outside of a workflow. Build yourself a to-do list and set internal reminders to send this to you monthly or quarterly. It’ll keep you on top of relevant dashboards and forecasts, making it less likely that you’ll miss a trend or opportunity — so you’re not paying to expedite freight to capitalize on it.
Reminders within your order management system also limit the chance you’ll miss needed analysis or updates. We’ve all got a million tools, like Slack and Outlook, and Trello, telling us what’s next or overdo. These can become distractions to higher-level order management tasks. Use the platform you live on to your advantage based on your company’s most important supply chain metrics & KPIs. Are your goals focused on sales and gross profit, overseeing open sales, or determining fulfillment issues?
Carve out the time you need to oversee operations. Let your order management system be a partner in that by relying on its functionality. In some cases, you can even automate report generation, so you only need to have time to review these. When that happens, system reminders are the perfect way to remember to update KPIs and targets that have changed since last quarter.
Jake Rheude is the Vice President of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse that was born out of eCommerce. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.