To stay competitive in an ecommerce marketplace, high-growth brands and retailers must utilize the appropriate technology to effectively scale their business. In doing so, it will be necessary to work closely with third-party logistics (3PL) partners to build a fulfillment network capable of satisfying a standard of near-instant gratification. A singular and integrated order management system (OMS) and warehouse management system (WMS) strategy is at the forefront of what brands and fulfillment providers should consider when planning for growth.
Based on the most recent Third-Party Logistics Warehouse Benchmark Report, 35% of 3PLs currently integrate their WMS with an OMS. In order to prioritize OMS integrations, 3PL warehouses should understand the value of an OMS and what brands look for when selecting an OMS.
What is an Order Management System?
An OMS is a platform designed to automate the order process from order creation to delivery, simplifying the challenges present in an omnichannel environment. Serving as a centralized hub of business operations for brands and retailers, an OMS’ connectedness is essential to its ability to automate. Among the functions an OMS provides key automation for order management and routing, listing management, inventory forecasting, and reporting.
Order Management & Routing
The core functionality of an OMS is its ability to automate the order process, reducing the need for manual intervention, which can lead to delays, errors, and even fraud.
This automation begins with the connectivity of sales channels, so that all orders can be unified into a single system where automation rules can be applied. The OMS provides a real-time view of each order, enabling users to see which stage in the order process the order is in, eliminating the possibility for redundant work and lessening the need for communication with fulfillment partners, saving everyone time and money.
When directly integrated with a WMS, the OMS can intelligently route orders to the warehouse geographically closest to the delivery address, ensuring the fastest delivery at the lowest cost. WMS connectivity also allows the OMS to update accurate stock levels from each warehouse, making the OMS the inventory source of truth from which each sales channel is updated, reducing the possibility of overselling.
While many OMS platforms do not have native listing tools, the OMS must seamlessly connect to best-of-breed listing platforms. Listing in multiple marketplaces allows a brand to reach new customers and for cross-channel buyers to get exposed to products from multiple angles. Listing tools provide automation that enables brands to maintain consistency across channels, while allowing for potential content modifications to fit the standards of each channel. The costly risk of errors from manual processes requires brands to evaluate integrated listing tools to automate marketplace listings.
As a platform that is aimed towards growing multi-marketplace brands, an OMS acts as the central hub from which products are listed and de-listed, allowing for more efficient management of the brand’s online presence. As brands look for the most robust solution, some brands will benefit from re-pricers, which will allow for automatic pricing adjustments based on lower and higher price thresholds in relation to a given marketplace or promotion timeframe.
Forecasting and reporting
To thrive in today’s hyper-competitive ecommerce environment, brands must have access to real-time data to understand how their business is performing, so that quick, but informed, decisions can be made.
When sales and fulfillment channels are managed separately without an OMS, tracking important key performance indicators (KPIs) becomes increasingly difficult and time-consuming as more complexity is added to the brand’s online offering.
When all data is stored in a single centralized system, brands can quickly analyze order process bottlenecks, product performance and profitability (per sales channel), and the cost of goods sold, among many other important KPIs. A key benefit of the aggregation of sales data is that it enables the OMS to use historical sales and the production lead time of the supplier to automatically forecast inventory replenishment needs, helping to avoid stock-out or overstock situations, maximizing sales and customer satisfaction.
The key driver of success for the brands that 3PLs service remains the technology stack and the partnerships 3PL warehouses build to serve their customers. By implementing an integrated OMS-WMS strategy, brands and fulfillment providers can position themselves to efficiently scale their operations to support continued growth.
To learn what other technologies (aside from OMS) the most profitable 3PL warehouses integrate with their WMS, read the Third-Party Logistics Warehouse Benchmark Report.
To learn how Extensiv 3PL Warehouse Manager works with Extensiv Order Manager, contact us.