The Definitive Guide to Order Management: Process & Practicality

Allison Champion
8 min read
December 6, 2022
Modified: April 14, 2024

Updated April 14, 2024

On its face, order management seems simple: receive, process, and ship an order. But as an ecommerce business grows and the volume and frequency of orders increase, order management becomes a critical process when it comes to overseeing inventory level , monitoring order status , and meeting customer demand .

Order management touches and influences every part of the ecommerce experience—from receiving a purchase order to how that order is packed and shipped to the speed with which it arrives on a customer’s doorstep. While it might seem purely systematic, the order management process and system used has a huge impact on customer experience and, ultimately, customer satisfaction.

What Is Order Management?

Order management is the process through which a customer places and ultimately receives an order. The process can vary from brand to brand, but order management usually includes order placement, fulfillment, and inventory management.

Order placement is when a customer places an order, whether that’s through a brand’s website or a marketplace. Order placement also includes order processing and confirmation steps.

Fulfillment includes picking, packing, and shipping the order. Third-party logistics companies often have dedicated warehouse picking teams, which makes picking faster. Warehouse management—making sure a warehouse is designed and operated efficiently —plays a key role in this step.

Inventory management is the critical last step, where a brand monitors its stock and ensures it has enough—but not too much—to meet customer demand . High-quality inventory management systems and inventory planning software help brands accurately forecast inventory needs.

What Is an Order Management System?

An order management system organizes and automates the order management process—from customers placing orders to fulfilling those orders. The leading order management systems offer one central location for brands to view information about all its orders—no matter where or how they were placed.

Flowspace’s order fulfillment and management system seamlessly integrates with every sales channel, from proprietary ecommerce sites to popular marketplaces to retail stores, to power the entire post-purchase experience. This means brands can see inventory levels, manage items, and create sales order reports with just a few clicks.

Why Do Brands Need Efficient and Effective Order Management?

Order management touches almost every step of the fulfillment process, and getting it right is critical to scaling and sustaining a successful ecommerce brand.

Prevent Overstocking or Understocking

For many brands, tracking and managing physical inventory levels is the most important process impacting its bottom line. That’s why ensuring optimal stock levels—to prevent overstocking or understocking—is an important benefit of an efficient and effective order management process.

Inventory management is critical to ensuring that you have enough—but not too much—inventory. Having an accurate view of your existing inventory is important to ensure the optimal stock level to fulfill customer demand without wasting resources on excess inventory or scrambling to restock after selling out. Flowspace’s solution provides real-time insights and demand forecasting recommendations to help brands make smarter inventory management decisions , helping to avoid several of the most common order management challenges.

Make Data-Driven Decisions

There’s no shortage of order data for brands to interpret, but gathering and combining data from multiple sources can make the task of extracting usable insights challenging. Inventory management software that provides one central location for data and visibility makes it easier to analyze and make data-driven decisions.

Leading order management systems also offer real-time data visibility, which allows brands to quickly identify and react to order management trends across platforms. The Flowspace platform enables ecommerce brands to integrate every social channel, marketplace, and shopping cart within one platform. This means order data from every source can be managed in one place.

Increase Efficiency

As ecommerce businesses scale and more orders are placed, more time needs to be spent fulfilling those orders. It seems like simple math, but there aren’t any more hours in the day. Once you add on time spent troubleshooting fulfillment issues, it may seem like most of a business’ time is spent on the order fulfillment process —and not on things that could help grow the business further, like marketing, product development, and sales.

Putting into place an omnichannel order management system can make the entire process, from order placement to dealing with order processing and delivery issues, faster and more efficient. This allows a company to spend more time growing the business. Flowspace’s order management system allows ecommerce businesses to handle more orders and provide optimized shipping options for customers. Flowspace is also able to identify the best, most optimally located commerce fulfillment centers closest to end customers to keep costs low and deliveries on time.

Reduce Mistakes

When a brand is small, it’s easy to prevent fulfillment mistakes, but as managing orders and SKU counts pick up, ecommerce fulfillment becomes increasingly challenging. When a brand is fulfilling orders from all over the world and through multiple channels, having an efficient and effective order management process to ensure accuracy is critical.

Purchase order mistakes threaten a brand’s bottom line (in the form of refunds and shipping costs) as well as reputation (customers are rarely happy to receive the wrong order). Implementing an efficient order management system can ensure order fulfillment—and a brand’s reputation— is the best it can be.

Working with order management software can automate and integrate order management to reduce human error. The Flowspace platform provides seamless integration with your online store and every other sales channel so you can see inventory levels, manage your items, take advantage of omnichannel fulfillment, and create sales order reports with just a few clicks.

The Order Management Cycle

Managing customer orders from inception to fulfillment is a complex process that requires careful coordination across various stages. Effective order management is crucial for maintaining customer satisfaction and streamlining inventory management.

Below, we walk through each step of the order management cycle, emphasizing the role of advanced order management software in enhancing order accuracy, visibility, and efficiency.

Order Placed

The journey begins when a customer places an order. This stage is critical as it involves capturing accurate customer information and order details. Order entry systems play a pivotal role here, ensuring that customer demand is accurately logged and processed. This initial step sets the tone for the entire order fulfillment process, highlighting the importance of precision and customer service.

Order Received & Confirmed

Once an order is placed, the next step is for the business to receive and confirm it. This involves verifying the purchase order against inventory levels to ensure the product is available. If you aren’t employing strong inventory management techniques, you might face an out-of-stock issue or low inventory levels. Order management software is invaluable at this stage, offering real-time inventory visibility and enabling prompt customer communication. Confirming orders quickly and accurately reinforces customer trust and satisfaction.

Order Picked

Order picking is a critical phase in the fulfillment process, where items are located and retrieved from the warehouse. Efficiency and accuracy in picking affect the entire supply chain, directly impacting order fulfillment rates and inventory management. Warehouse management systems optimize this process, ensuring that the right items are picked according to the customer order and inventory data.

Order Packed

Packing involves preparing the picked items for shipment. This step requires attention to detail to ensure order accuracy and minimize returns. Effective order management practices, supported by robust order fulfillment management systems, ensure that each item is securely packed, labeled correctly with the shipping label, and ready for dispatch. This stage is pivotal in meeting customer expectations and enhancing the overall customer experience.

Order Shipped

Shipping marks the phase where orders are dispatched to their final destination. Order tracking capabilities become crucial here, providing both the business and the customer with real-time updates on order status. Supply chain management plays a significant role in optimizing the shipping process, ensuring that orders are routed efficiently and reach customers in a timely manner.

Order Delivered

The final step in the order management cycle is delivery to the customer. This stage is crucial for cementing customer satisfaction and loyalty. Providing customers with accurate tracking information and ensuring that orders arrive on time and in good condition are essential aspects of a positive customer experience. Effective order management and fulfillment processes, supported by a comprehensive returns management system, are vital for meeting and exceeding customer expectations.

How to Streamline Order Management with Flowspace

The customer experience of placing an order and receiving an order are key to having a great shopping experience. An order management system can help brands keep the customer at the center of the experience and deliver on promises made. Here are a few ways brands can optimize the order management process and keep customers coming back again and again.

Connect Sales Channels

Flowspace’s fulfillment software integrates with Shopify, Amazon, Walmart, and beyond, capable of connecting to all of a brand’s storefronts, shopping carts, and marketplaces with integrations that enable quick, easy, one-click set-up.

Optimize Inventory

Storing products and fulfilling orders closer to the customer means faster shipping. Flowspace has a connected, distributed network of more than 130 locations nationwide, meaning there’s a fulfillment center close to its customers. The company’s sustainability-award-winning Network Optimization algorithm identifies the optimal fulfillment centers that enable fast, affordable shipping and helps determine how to best allocate inventory between those warehouses based on historical customer and inventory analytics, purchasing data and other factors.

Streamline Omnichannel Operations

Brands need to sell where customers are shopping, and that means most ecommerce brands make their products available across multiple channels. But customers also expect a seamless experience no matter which channel they’re purchasing from. The Flowspace platform provides real-time order management and visibility from every channel, along with instant access to data and insights, all in one place. This integration means more efficient order management across all channels.

Make Fulfillment Faster and More Affordable

Customers expect fast shipping that they don’t have to pay an arm and a leg for. Flowspace fulfillment centers handle picking, packing, and shipping orders to exact specifications, delivering a seamless experience for customers. When using Flowspace software to manage an ecommerce fulfillment service, businesses can control all their supply chain operations in one central space. All sales channels and storefronts are integrated to provide accurate inventory levels and customer insights in real time.

Having an efficient order management process can prevent customer order issues, shipping delays, and, most importantly, less-than-happy customers. Order management software can streamline the order management process and allow businesses to spend more time on other critical business functions.

To find out how Flowspace’s order management software can help your brand optimize for order management and provide a seamless experience everywhere you sell, get in touch.

Written By:

flowspace author Allison Champion

Allison Champion

Allison Champion leads marketing communication at Flowspace, where she works to develop content that addresses the unique challenges facing modern brands in omnichannel eCommerce. She has more than a decade of experience in content development and marketing.

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