Distributed Order Management: What Is It, Characteristics & Benefits

Distributed Order Management

Distributed Order Management (DOM), although it may not sound familiar, is something you need to quickly learn. Omnichannel retail will continue its rise as the preferred sales model as the eCommerce sector becomes more customer-centric.

What is Distributed Order Management (DOM)?

Distributed Order Management (DOM), is a way to ensure that orders reach customers in a timely manner and at the lowest cost. Software that automates many functions such as order routing, shipping, inventory forecasting, reordering, and stock management can be used to orchestrate the process.

Consumers want to be able to shop from many channels and bounce between different platforms. They also want to order directly from their local store, have it shipped, and then pick up the product in the way they prefer. Both eCommerce and physical stores must work together. It is crucial to combine multiple platforms without compromising the customer experience.

The distributed order management system was created to help you meet the increasing demand for products from this shift in the industry. Omnichannel retail has become more complex. Distributed order management can be a way to unify your business in this new era of commerce.

Brands are finding it increasingly difficult to adapt to eCommerce technology’s rapid evolution with apps, social media, and third-party retailers’ platforms. This can make inventory management more difficult. Backend technology is needed to help brands meet this expectation in an efficient, flexible, cost-effective, and efficient manner. A DOM system gives brands the support they need to provide high-quality customer services and increase brand trust.

What are the characteristics of a retail Distributed Order Management system?

A distributed order management system’s primary goal is to improve the way your company processes customer orders and manages inventory. Businesses that want to maximize spending and preserve the integrity of their customers’ journeys will need to be able quickly to replenish stock and fulfill orders.

Distributed order Management systems streamline stock replenishment by linking the various techniques used to order more items. This is done by creating a central platform that contains one view of all items in your inventory. Modern businesses can manage their inventory more and make sure that all components are in order. This allows for future and current consumer demand to be met, while also balancing the need to improve budget control, inventory levels, logistics, and the use of existing assets.

This single view allows retailers to fulfill every consumer’s main promise of timely delivery by providing a global overview of all shipments, inventory, orders, suppliers, and shipments. You don’t want to cause negative customer feedback due to a late shipment, cancellation, or last-minute order. DOM systems can help you avoid these situations.

Brands that rely on legacy infrastructures are at the root of their problems. Businesses can’t adapt to legacy infrastructures in the digital age. Because they were built during omnichannel retail’s new standard, distributed order management systems are specifically designed to deal with the unique challenges of these models. Through integrations, they can access multiple fulfillment methods. This makes it easier to optimize every stage of your fulfillment process without increasing complexity.

These robust distributed order systems are:

  • Integrations and connections with third-party logistic providers (including Amazon FBA).
  • Dropshipping is a feature that facilitates fulfillment by vendors
  • To maximize cost efficiency, order splitting and merging are possible
  • Automations for order routing give you more control and speed over order fulfillment
  • You can see inventory at every stage of the buying or selling process. This helps to limit uncertainties and avoid mistakes.
  • You can create fully customizable workflows and integrates that allow you to adapt and grow as your business grows.

Although this may seem like a vast array of valuable assets, it is only a small part of the possibilities that can be achieved with the right distributed ordering management system. Although it can be difficult to implement a distributed order management solution into existing processes, the benefits of better visibility, customization, inventory accuracy, and improved visibility are well worth the effort.

How does Distributed Order Management work?

Retailers are more dependent on efficient Inventory management Many of them now turn to distributed order management systems for order fulfillment and fulfillment. They use DOM systems for a number of reasons, including:

  • Synchronizing eCommerce platforms with storefront locations so customers can buy online and pick up in-store
  • To consolidate shipping, combine orders from the same customer
  • To get the lowest rates and meet delivery dates, rate shop across shipping partners
  • Faster and more efficient order processing
  • Customers will have a faster experience

These features, taken together, allow customers more control over where and when they buy. They also help you track customer engagement and connect dots if they choose to purchase through a different channel.

Distributed order management doesn’t only apply to direct-to consumers businesses. These systems are also useful in a business-to-business structure. They provide greater visibility, flexibility, and synchronization between wholesale partners and distributions.

Do you need Distributed Order Management?

In today’s business environment, every retailer should use a distributed order management system. This is the new standard in retail management.

How do you know when it is time to use DOM. It all depends on where your business is at the moment and how much friction you are experiencing. Retailers that have a DOM are the ones that will benefit the most.

A high number of suppliers: It is more difficult to manage relationships with multiple suppliers. You can track the product data of your vendors and determine how many units you need to order. Distributed order management systems (DOS) can help you track your orders and manage all of this information.

Multi-warehouse structures: It can be difficult to track inventory and where it is located if you have more than 2 warehouses. Because you are not directly responsible for managing inventory, this becomes more complicated if you have 3PL warehouses. This data can be consolidated by DOMs, which will give you a 360-degree view of your inventory and 3PL inventory at any time.

Growing SKU portfolio: Although managing 20-30 SKUs using spreadsheets is possible when the number of SKUs starts to exceed hundreds or thousands it can become a real headache. Distributed order management allows you to keep an eye on the products and which channels they are available in.

Software and customer solutions that aren’t centrally connected. Omnichannel retail is all about seamless connectivity. This can make it difficult to provide a seamless shopping experience. This is accomplished by bringing together all of your processes in distributed order management.

Potential growth but lack in one data hub: The more fragmented your business is, the more difficult it will be for it to grow. Distributed order management solutions might be a good option if your business is experiencing difficulties because it can’t access its data.

Distributed Order Management vs traditional Order Management

When comparing distributed order management to older, more traditional order management systems, there are many differences. Distributed order management systems are more focused on integrations, data connectivity, and automation than legacy systems.

Distributed order management is not a trend but a necessity. This is why bringing both systems together can be so difficult.

What is the difference between Distributed Order Management and other types of order management?

Many legacy order management systems, also known as OMS, were created long before the advent of omnichannel retail. They are not flexible enough to support multiple channels of modern retail distribution. They are also slow and inefficient, making it difficult to access the preferred fulfillment methods that retailers prefer. They are meant to be a single process. They connect only a small number of channels to one source of inventory and often ignore where it is located. This can have the unfortunate effect of reducing visibility at all levels of the supply chain order management. This visibility is crucial.

To fulfill customer order management, channel managers and fulfillment staff must know where and what stock they have. This data is available in real-time through distributed order management, which allows everyone to have access at the same moment. This allows you to quickly access data, and combine external and internal data sources to improve productivity and increase your ability to fulfill more orders.

What is Distributed Order Management capable of that other order management systems cannot?

Most legacy systems are used to process orders. Distributed order management systems are better at accommodating different methods and techniques for fulfillment that an organization might use.

This is done by integrating with third-party businesses and suppliers that you trust. By being more transparent about the data collection and presentation, distributed order management simplifies every step of the fulfillment process. This allows for many new capabilities.

  • Automated Systems: Before the advent of omnichannel commerce, many IT systems were built and sold to businesses. The new retail model allows for multiple touchpoints, multiple fulfillment points and multiple returns points. Your IT systems must be capable of handling the Omnichannel Experience. This will limit your sales potential. Distributed order management, which allows these channels to be connected with minimal modification to the business’s structure, can be achieved by the right automation setup.
  • You can customize: The distributed order management system will let you set your own parameters and rules for your business. It is crucial to have a clear understanding of how your business will function when you add channels to your multichannel business model. It is now easier than ever to establish brand-relevant rules, synchronize your inventory flow, pricing, fulfillment data, information flow, and coordinate your pricing. This creates a more consistent and logical system of processes that can adapt to new data as they become relevant.
  • Integration: Modern business data comes from many sources. It is important to ensure that you get the correct data from all sources and align it with other sources. Without stable integrations, large amounts of data are useless as you won’t be able to see the entire supply chain. The distributed order management system allows you to collect both internal and outside data in one place. This allows for greater visibility at all times.
  • Flexibility and scalability: Businesses want to grow and are always looking for new technologies and trends. Because it’s more flexible, business evolution is easier with a distributed order management program in place. It is easy to make changes across the whole system quickly so that every department is included in the data loop.

A DOM and legacy OMS are different in that they can adapt to changing retail order management system requirements quickly. Although they may share some similar functions, traditional OMSs are limited in their capabilities. Because distributed order management systems are built on cloud technology, and multi-tenant architectures, they don’t have the same limitations. Multi-tenancy is important because it increases efficiency and can be scaled at any time. Retailers should prioritize all of these factors.

Distributed order management systems are the evolution of traditional OMS. They must be implemented if retail companies want to remain responsive and adaptable in the digital age.

Benefits of using a Distributed Order Management system

Distributed order management gives retailers a better view of their supply chains. It allows them to have more control over order coordination and order coordination. They also have access to real-time information about orders being processed and inventory in transit. Businesses can benefit from greater flexibility, increased efficiency, and higher effectiveness. Because they provide many benefits that traditional OMS does not offer, they allow for this.

  • Multiple Fulfillment processes: Legacy OMS might only be able to connect to a small number of shipping providers. This forces businesses to use other software in order to have more options. Each of these add-ons comes with a price, increasing the overall cost of the system. It’s much easier to manage and streamline the process by having a central hub that can handle all orders. Split orders can also be made possible by distributed order management, which allows for lower shipping and fulfillment costs across all channels. This allows for more precise workflows and detailed monitoring of the results.
  • Cross-Channel Integration: Dissimilar sales channels and systems can be combined with distributed order management to make them more effective. It is much easier to source inventory, even if different channels or warehouse locations are considered. This allows for precise and accurate fulfillment data. Legacy OMS will require you to manage multiple systems. This will slow down updates and give you a biased view of inventory status.
  • Customer experience: Poor inventory management and cost management can put a business at risk. Profits will drop if there isn’t enough stock. Distributed order management systems can solve this problem. It is easier to predict and respond to unexpected situations by integrating your inventory and supplier views. You can track inventory through multiple channels so you have greater control over what your customers need and when customer order management is available.
  • Global visibility: Distributed order management applications will give you greater inventory visibility. Your international warehouses or 3PLs can be connected to your system to make it easier for customers to order and receive products anywhere.
  • The cloud: Cloud-based distributed order management systems. This provides brands with the foundation they need to grow. Cloud structure means that customers can access the latest updates to the DOM system instantly without affecting the service. Users can log in from any computer and access their data from any other member of the team. This network-based solution allows for better information processing, performance monitoring, as well as execution of business strategies. It is easier to analyze and evaluate forecasts and automating the process can make it even more efficient.

How to choose a Distributed Order Management System

You will need to be clear about what you want to accomplish in order to choose the most widely distributed order management system. There are some important questions you need to ask and factors to consider when choosing the right system for your company and future growth. This means that you must take clear steps.

1. Identify your Priorities and Objectives

This should be discussed with your entire company. Spend some time analyzing what your new system should do for you. Be sure to include every department within your company structure. Don’t forget about discussing your plans and expectations with suppliers. To choose the best-distributed order management system for your needs, you need to focus on one thing.

You will get a better understanding of your needs by asking as many questions as you can. This will help you to prioritize features and functions that are more important than just nice. Take a look at the following questions and decide what your answers are:

  • What are your success indicators in terms of inventory? Do you want to reduce inventory costs, increase inventory turnover, or decrease carrying costs? It will be easier to find the best DOM if you are clear about your goals.
  • What are your growth plans? It is important to find a tool that allows you to keep track of these plans and manage them more easily.
  •   How seasonal are your sales? Stock management can be affected by the presence of peak and off-peak times. You need to make sure your inventory management software can handle seasonal sales if your business depends on them.

2. Proposal Request

To create a proposal and organize the selection process, you will need to find a vendor for your distributed ordering management system. It will include the key features you want, as well as any technical requirements you require. These are the key elements you should include in your proposal:

  • Order volumes
  • SKUs
  • Your existing vendor landscape
  • Your current software, hardware, or networks
  • Timeline for system acquisition
  • An in-depth breakdown of your training process

This will allow you and your DOM vendor to quickly determine if the product can meet your requirements.

3. Do Your Research

If you are more aware of the main features and limitations of each system, you will be happier with the final choice. Discuss the systems of DOM vendors with you.

It is a good idea at this stage to use demos and trials of the systems you have narrowed down. This will give you an easier way to evaluate the usability and practicalities of training with a new system. You can also check out customer reviews on websites like GetApp and G2 to get a more objective view of the tools.

Remember that integrated products can also be reviewed on eCommerce platforms such as BigCommerce and Shopify. These reviews can be an excellent source of objective and practical feedback.

4. Review

It can be difficult to find a system that meets all your needs. It is important to negotiate with the system to ensure the features you do not need are not hindering you.

You should ensure that your business has the most important features and functions. But don’t just evaluate the inventory software. You need to make sure your vendor matches your brand.

These steps will make it easier to locate your distributed order management system. You should consider as many elements as you can so that you can get a clear picture of your needs and what you can live with.

After narrowing down your list of possible software options, it’s time for the hard questions.

  • Is this system going to allow you to automate manual tasks? Automating is a key feature to save time and money.
  • This system allows you to manage sales across multiple channels and across different currencies.
    Is it able to provide the necessary support for companies that make use of multiple warehouse locations?
  • Reporting makes forecasting possible. Retailers who anticipate changes in their industry will find this a crucial feature.
  • Are they able to support third-party integration within the supply chain ecosystem? This includes reliable warehouse management software, accounting, fulfillment.
    Are there new features added to the system often?

Distributed Order Management is a great way to transform your business. You should not be relying on legacy OMS systems. You will find those modern solutions are more powerful and can help you optimize the customer experience.

You May Also Like

About the Author: The Next Trends

Leave a Reply

Your email address will not be published.