What is a Distributed Order Management System?
Answering common questions about Distributed Order
Management Software and Systems.
A Guide to Distributed Order Management Software
- What is a Distributed Order Management System (DOMS)?
- How does Distributed Order Management Software Work?
- What is the difference between Distributed OMS and OMS?
- Why do Brands Need Distributed Order Management Software?
- Who Should Use Distributed Order Management Software?
- What are the Benefits of DOMS?
- What Features Do I Look for When Choosing a DOMS?
What is a Distributed Order Management System (DOMS)?
DOMS manages and orchestrates the entire order fulfillment process across multiple sale channels, inventory locations, and fulfillment centers. It ensures that customer orders are fulfilled efficiently, considering factors like product availability, shipping costs, and delivery times.
How does Distributed Order Management Software Work?
Distributed order management software works by synchronizing e-commerce platforms and physical storefronts, enabling customers to buy online and pick up their purchases in-store. It merges orders from the same customer to combine shipping and minimize costs. DOMS accelerates and streamlines order processing, and it allows businesses to compare rates from various shipping partners to find the most cost-effective options while meeting delivery deadlines.
What is the difference between Distributed OMS and OMS?
“Traditional” OMS primarily focuses on automating tasks related to order processing such as handling transactions, communicating with customers, and providing services. Distributed order management builds on this foundation by incorporating advanced order routing and rule-based logic to determine which fulfillment location is best equipped to fulfill each customer’s order.
OMS works well for retailers with simple operations (i.e. a single sales channel and 1-2 fulfillment locations). On the other hand, distributed order management systems cater to retailers with extensive fulfillment networks and multiple sales channels, including omnichannel, multi-brand, international operations, and more complex fulfillment.
Why do Brands Need Distributed Order Management?
Brands need distributed order management to tackle various challenges in today’s omnichannel retail environment. Retailers often face difficulties managing relationships with multiple suppliers and tracking product data. A distributed order management system streamlines these processes, helping retailers efficiently manage orders and inventory.
Retailers with multiple warehouses or extensive SKU portfolios also benefit from distributed order management, which consolidates data across all sources, including 3PL warehouses and drop shippers. This system creates a centralized hub for real-time access to data, reducing the risk of disconnected systems and ensuring smooth operations. As a result, brands can manage their data more effectively and adapt quickly to emerging challenges.
Who Should Use Distributed Order Management Software?
Not all retailers need advanced order management tools. For brands that operate with a single sales and fulfillment channel and have no plans to grow, a traditional OMS is the most budget-friendly choice. DOMS are more advantageous for brands that meet one or more of the following criteria:
- Selling on multiple channels such as marketplaces, apps, stores, and affiliates.
- Managing fulfillment and returns across diverse locations including stores, warehouses, and third-party logistics providers (3PLs).
- Providing easy customer experiences such as automated returns, preorders, backorders, and custom orders.
- Struggling to scale or grow due to inefficient or manual inventory, returns, or fulfillment processes.
- Relying on spreadsheets for transactions, returns, or fulfillment management.
- Employing sophisticated business processes and tech stacks, including ERPs, fraud prevention, loyalty programs, tax management, and various payment type.
- Facing challenges with cross-channel inventory accuracy and visibility.
- Needing to automate capacity, proximity, priority, and other fulfillment routing rules.
What are the Benefits of DOMS?
The benefits of using a distributed order management system (DOMS) include comprehensive control and real-time visibility of the supply chain, allowing retailers to manage orders and inventory more efficiently. With DOMS, businesses can centralize and streamline all order fulfillment processes, including split orders and cost-effective shipping across multiple channels. This leads to more efficient workflows, increased productivity, and higher profitability.
DOMS also improves the customer experience by providing a unified view of inventory and suppliers, enabling businesses to anticipate and respond to unexpected scenarios. Cloudbased DOMS offers global visibility of inventory, seamless integration with 3PLs and international warehouses, and network-based solutions for intelligent forecasting and process automation. As a result, businesses can achieve higher sales velocity, better risk management, and greater sustainability.
What Features Do I Look for When Choosing a DOMS?
When choosing a distributed order management system (DOMS), you should look for several key features:
- Inventory Visibility: The system should offer a centralized, real-time view of inventory levels across all sales channels and locations. This helps you make informed decisions on inventory allocation and order fulfillment, leading to better management and cost control.
- Order Management: Look for the ability to manage orders from various sales channels— such as e-commerce, physical stores, and marketplaces—in a centralized system. This ensures efficient order processing and enhances customer satisfaction.
- Fulfillment Optimization: The system should provide algorithms that optimize order fulfillment, taking into account factors like inventory availability, shipping costs, and delivery times. This can help reduce costs and improve delivery efficiency.
- Customer Experience: A DOMS should provide real-time information on product availability and delivery times, enabling you to manage customer expectations and improve satisfaction, leading to repeat business and referrals.
- Integration: Ensure the system integrates seamlessly with other platforms such as warehouse management, transportation management, and customer relationship management systems. This integration streamlines operations and provides a comprehensive solution for sales and fulfillment.
- Decision Making: The system should offer data-driven insights and recommendations to guide inventory allocation and order fulfillment decisions. This leads to improved operational efficiency and increased revenue.
- Scalability: Choose a system that can scale with your business, accommodating growth and evolving needs. This ensures the system remains effective as your organization expands..
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