Streamline Your Order Management Process: The Complete Guide

A solid order management process is the backbone of business success. This extensive guide will teach you how to optimize your order management work through all stages - from initial sales order entry to final order delivery. Read on to drive maximum efficiency, boost profits and delight customers.

What is Order Management and Why is it Vital?

Order management refers to the end-to-end business workflow and systems that handle a customer's order. It kicks off when an order lands in your system and finishes when the customer’s order is fulfilled, shipped and paid for.

Order management encompasses a wide array of sub-processes:

• Order capture and processing

• Payment authorization

• Credit checks and inventory allocation

• Sourcing, warehousing and picking/packing

• Shipping and order tracking

• Returns and refunds

• Supply chain coordination

Along with supporting services like customer service and relationship management.

Smooth order processing directly impacts key success metrics:

• On-time delivery performance

• Shipping accuracy without errors

• Inventory and cash flow optimization

• Operational efficiency and cost management

• Customer experience and lifetime value

So why is order management important?

It ensures you can handle rising sales without letting customers down or losing money. When done right, it becomes a value-driver. If mismanaged - it creates bottlenecks that erode customer loyalty and profits.

That's why investing in streamlining your order management should be a top priority.

What are the Key Stages in Order Management?

Let's break down what exactly happens from order creation to fulfillment and delivery:

Initial Order Capture

The order management process begins when a customer places an order on your website, app, phone or in-store. Key order data like items purchased, quantities, prices and customer details are recorded in your systems.

For online orders, the data typically flows directly from your ecommerce platform. For in-store and phone purchases, employees manually enter the order data.

Accurate initial order capture prevents downstream issues with fulfillment, so validate data to avoid manual data-entry errors.

Payment Handling

If upfront payment is needed, you first authorize credit cards or process payments. Make sure payment verification happens before fulfillment to limit unpaid orders and improve cash flows.

Set up configurable system rules for payment methods, credit limits, address verification and fraud checks suited to your business needs. This stage of order management is crucial for managing risks.

Order Validation

In this step, submitted orders undergo important checks:

• Order accuracy - Validate items, quantities, prices and customer details

• Inventory availability - Confirm stock levels to avoid overselling

• Regulatory compliance - Check order contents validity 

• Credit risks - Run customer credit history checks

After validation, update the order status in your order management system and inform customers. Configuring automatic validation rules speeds this up.

Warehouse Management

Warehouse staff pick, pack and prepare the order for shipping based on specifications. Update inventory quantities in your WMS once items are reserved.

Well-defined warehouse procedures and instructions for order types helps accuracy. Error-proof packing with scans and checklist prevents incorrect shipments.

Shipping Execution & Label Creation

Integrate your shipping software or carrier account to automatically prepare shipping manifests and labels for fulfilled orders and calculate rates.

Next, print labels, attach to packages and hand-off to your delivery partner or internal transport team. Tracking ID creation helps track orders in transit.

Order Tracking & Delivery

Give customers access to a branded tracking portal to monitor order status and delivery in real-time.

Automated delivery status emails and SMS alerts during key process milestones improves convenience and order visibility.

Post-delivery, assist customers via email, chat or phone support for any issues. Manage returns or refunds smoothly back into your order management workflow.

This lifecycle allows you to fulfill orders reliably while keeping customers informed, responsive support drives satisfaction.

What Order Management Challenges Do Retailers Face?

Juggling the many interconnected process steps is tough. Growth makes it harder via:

1. Manual Errors

• Inaccurate order data entry leading to fulfillment issues

• Inventory miscalculations causing stock-outs

• Shipping mismatches delaying order delivery

2. Data Fragmentation

• Visibility gaps from software siloes across sales, payment, fulfillment etc

• Hard to track orders across departments and channels

• Inventory blindspots between warehouse and stores

3. Process Inefficiencies

• Processing bottlenecks causing order backlogs

• Long work queues and order cycling times

• Difficult exception handling with custom/complex orders

4. Poor Customer Experience

• Stock unavailability without clarity on backorders 

• Order tracking difficulties or lack of updates

• Missed delivery dates eroding customer trust

Without process rigor and smooth technology integration, scaling order volumes gets difficult. Costs and errors creep up while customer lifetime value reduces over time.

How to Streamline Your Order Management Process?

Invest in order optimization to prevent failure points as transaction complexity and frequencies increase.

Implement an Order Management System

Centralize order data by implementing an integrated order management software solution like Brightpearl, TradeGecko or NetSuite Order Management.

Key capabilities:

• Central order data layer across sales channels/locations

• Flow order data seamlessly to fulfillment and finance

• Flexible order orchestration rules and workflows

• Inventory linkage for allocation and reservation

• Automated order validation

• Built-in 3PL shipping integration

• Customizable order tracking portal

• Analytics dashboards for operational & business insights

Eliminate disjointed spreadsheets, forms and manual workarounds. Software connects teams, data and processes for 2X productivity gains.

Integrate Related Technology Systems

Tightly couple complementary systems powering your order value-chain: 

• Ecommerce platform managing storefront and shopping cart

• Payment gateways for collecting online payments

• Warehouse management system directing fulfillment operations

• Accounting software recording invoices, billing and revenue

• Shipping integrations with USPS, UPS, FedEx or regional carriers

• CRM platform managing customer data and interactions

Pre-built connectors avoid complex custom coding. Tight integration provides end-to-end data visibility that makes order orchestration easier.

Create Standard Operating Procedures

Ensure consistent, predictable outcomes by creating SOP guides for order handlers detailing: 

• Configuring conditional order routing protocols

• Inventory reservation rules by product/warehouse 

• Payment authorization procedures

• Fraud check mandates and order release criteria

• Instructions for backorder handling or split-shipments

• Customer address validation needs before shipping

• Managing shipping plan exceptions or carrier issues

• Steps for processing returns and reimbursements

Provide Order Tracking & Notifications

Meeting delivery expectations is vital for customer satisfaction. Offer convenience via:

• Real-time order status tracking portal

• Shipment milestones emails and SMS alerts

• Automated emails for resolved backorders/returned items

• Self-serviceReturn Merchandise Authorization (RMA)

Analyze Metrics & Continually Improve

Use actionable intelligence to drive ongoing optimization:

• Setup reports/dashboards on key productivity KPIs

• Track cycle times across process stages

• Review recurrent root causes for delays 

• Compare shipping carriers by accuracy/cost metrics

• Monitor orders-at-risk metrics for intervention

• Compute revenue impact from abandoned orders

• Calculate customer profitability by lifetime value

Guide decisions and process changes using data, not guesswork. Course-correct early before minor issues balloon into profit killers.

Key Takeaways: Master Order Management Excellence

Mastery of order workflows is imperative to execute flawless fulfillment. Key recap:

Accurate order capture → Smooth data handoffs → Efficient validation and warehousing → Quality assurance checks → Transparent order tracking → Problems analysis → Continuous process refinement

Getting this flywheel right entrenches sustainability to absorb fluctuating order loads. It boosts productivity, cash flows and profitability while delivering 5-star customer experiences.

Next Step:Construct an order management blueprint for your business now. Model scalable processes, integrate systems, tap automation and equip staff for the future. Evolve order operations from cost centers into competitive differentiators.