Growing customer expectations and organizations’ urge to achieve customer satisfaction is directly proportional. Organizations are innovating and exploring new strategies to provide the best customer experience. As a result, organizations are adopting multiple technologies to automate complex processes and amplify customer experience. Order Management Systems (OMS) is one such platform that helps efficiently manage orders, reduce costs, and generate revenue by automating manual processes and reducing the margin of error. Amongst the many capabilities of an OMS system, the order routing feature of the order orchestration capability is considered the most important. Order orchestration ensures that orders are fulfilled quickly and efficiently with minimum cost and maximum customer satisfaction with fast and on-time deliveries. Order routing is a key component of order orchestration that involves determining the most efficient way to fulfill an order, considering the variables such as product availability, shipping location, and delivery speed. This feature is so important that Quadrant Knowledge Solutions recommends retailers and e-commerce players evaluate OMS vendors on their ability to provide sophisticated routing and fulfillment capabilities.
The rules engine, currently used by OMS vendors for order routing, automatically allocates orders to warehouses, stores, or distribution centers to fulfill customer orders based on proximity to the customer’s location. Moving forward, the OMS vendors are bringing advancements in order routing capabilities by leveraging AI/ML and predictive analytics. Sustainability is also important, and organizations can view the carbon footprint for fulfilling customer orders through different fulfillment options.
Order fulfillment is done via many fulfillment centers such as stores, warehouses, and distribution centers (DCs). One of the major challenges is the frequent order cancellation and the long time taken to let the system know and react. The order cancellation can be due to the unavailability of inventory, damaged stocks, lack of profitability, or inability to deliver. On rare occasions, OMS systems allocate the orders to different fulfillment centers and update the customer on the order status quickly when the initially assigned delivery center declines the order. These episodes impact the customer experience and brand reputation. OMS systems should accommodate these issues and check for the items’ availability and delivery speed before allocation, but this does not happen.
A better way to address the challenge of order cancellation would be to allow the stores to claim the orders based on availability instead of a push-based allocation. This practice can avoid order cancellation scenarios and late deliveries and boost store engagement to fulfill customer orders. OneStock is one such OMS vendor that allows organizations to fulfill customer orders through its unique value offering, known as competitive (or collaborative) allocation within the order orchestration capability. Under competitive allocation, the stores claim and fulfill the orders in real-time.
OneStock’s order orchestration capability ensures optimized order fulfillment through its intelligent order routing rules along with user-defined parameters. Similar to other OMS platforms, OneStock optimally fulfills customer orders by selecting the best locations and carriers and minimizing order splits. Additionally, OneStock offers competitive allocation, which works on the order gamification principle within its ship from store solution. This feature enhances order fulfillment by enabling different stores of identical parameters such as store location, product availability, and carrier partners to compete with each other to fulfill the customer order. The order is allocated to the store which claims before other stores. This competitive allocation feature can also support multiple complex order routing situations like two stores within given proximity, no order split or order split, and more.
Many organizations like AWWG (Pepe Jeans London, Hackett, and Façonnable), Intersport, and IDKIDS are using the OneStock ship to store gamification module for order fulfillment. After implementing the OneStock ship from store solution, businesses were able to reduce the order cancellation rate to less than 2 percent, increase ship from store fulfillment for online orders, shorten the delivery time from 10 days to 2 days, and reduce international logistics costs by 40 percent. Such customer success stories project the impact of OneStock’s competitive allocation feature. With the increasing number of offerings from existing vendors, and an increase in the depth and breadth of existing offerings in the OMS market space, the competitive allocation feature has given a new dimension to the OMS offerings. It also helps OneStock to stand out from other vendors in the OMS market space. This feature makes it interesting for store managers to participate in the challenging order fulfillment task, which can otherwise be boring and monotonous. This process also attracts some incentives, and the orders are claimed faster, and deliveries can happen on time/ before time. The most important benefit is the lower time taken to fulfill the order.
Having understood this concept, Quadrant Knowledge Solutions tried to understand the “what ifs.” For example, there is a possibility that no one claims the order, but later realizes that “what if” no one claims the order? “What if” someone claims an order, but it is not in the inventory anymore? “What if” someone picked it up at the store? In these cases, the rules go back to how an organization would like it to be – the traditional way of using proximity as a push model or using the new pull strategy. The pull strategy on order fulfillment addresses the most important part of the problem – time.
Gamification of the order fulfillment process is a classic case of an innovative mindset. While designing order orchestration rules, end-users need to focus on solutions that not only enable users to meet their key result areas (KRAs) but also make the tasks interesting.
Author : Neelam Singh, Practice Director at Quadrant Knowledge Solutions. Nithin Bhaskaran, Analyst at Quadrant Knowledge Solutions.
