Ecommerce and other digital channels create sales channel complexity, but a proper order management system streamlines orders whilst still allowing for flexibility.
Consumers’ use of ecommerce is set to remain elevated versus pre-pandemic. The digital commerce genie is out of the bottle, and now there are multiple genies in the form of social commerce, D2C, livestreaming, quick commerce, voice assistants and smart speakers … the list goes on.
All of this means that manufacturers are now operating across multiple types of sales channels, many of them not physical stores. In this light, customer relationship management and order management systems need to be reviewed and adjusted to meet the complex new sales reality.
Supply chain and order management excellence could be described as ‘right products, right packs, right quantities, right place, right time, right price – from raw materials to the moment of purchase – at the lowest possible cost to serve’.
The upfront planning and analytics ‘basics’ to achieve this typically involve the following:
- Baseline pricing (by week/sku/branch/plant)
- Baseline sales forecast (by week/sku/customer)
- Promotional activity – discounts & rebates (by week/sku/customer), promotional calendars, incremental impact to forecast, claims matching and management
- Modelling volume and revenue real-time with customer (planning scenarios), including maintaining multiple demand plan versions and scenarios
- Building a consolidated, unconstrained demand plan. Compare demand plan with supply plan and any bulk sourcing
- Supply/Demand balance report & analysis
- Manual adjustments
- Manage allocations
- Manage additional bulk sourcing / substitution / concession
- Reduce plan to meet production capacity if required.
Even with a robust core planning process, average FMCG forecast accuracy is only around 70%.
Supply Chain Optimization is delivered through the integration of sales and operations planning. This includes demand and supply planning harmonized through a monthly S&OP process; Trade Promotion Management, which combines external and internal business planning capabilities, and the ability to leverage integrated insights to drive better decision making through the organization.
So, once you’ve got the sales and operations planning process and data analytics sorted out, then we’re into the management of forecast orders.
Your order management system needs to be able to accept orders from multiple channels, whether innate or third party. It should encompass customer service, external sales teams, and customer facing order entry options. This means it needs to be device, operating system and form factor agnostic in order to accept multiple source inputs and provide real time information validated by an ERP. Ideally it allows for customer driven order entry (thus reducing potential for double entries) on a BYO device.
Value adds for customer driven order entry might include complementary and suggested products to augment customer orders, and extensive product and price guides. Internally, the capability for advanced pricing and margin analysis.
From a tracking standpoint, your order management system should improve traceability down to product lot level. This enables things such as food safety compliance, for example country of origin and harvest locations. Product information needs to be aligned to local item codes, with real time notification of changes. Tracking can be made down to case-level delivery intelligence that includes time, date and location stamping.
All of this should ultimately assist with rapid pacing your warehouse velocity and optimizing demand replenishment. By tracking delivery activity from warehouse to recipient customer enquiries are reduced, whether to your call center or to the sales team. You should be able to see, in real time, order adjustments, returns, credits, cash and driver performance and delivery status as well as delays, damaged products and late orders.
These things were already requirements in the physical store dominated world. Now in the age of digital commerce and orders from any channel for delivery to anywhere, your order management system needs to allow for multiple input sources and channels. But the overarching principles of order management excellence remain the same.