Converging Order and Logistics Management on One Platform
Q: Order management systems relate closely to supply chain management by better matching demand to supply. What are the new developments in OMS?
A: Today’s technology empowers brands to offer a range of diverse, quality products, as well as customizable delivery or omni-channel fulfillment options to their customers. Doing so cost-effectively has always been a challenge. OMS tends to focus on planning or execution, but rarely both. Next gen solutions, however, feature smart capabilities, such as multi-level order, inventory, and logistics management, that finally converge both to help companies balance supply against customer and business demands.
Brands can use one system to automate and optimize orders, inventory, and transportation across dynamic networks. So, no matter what sales channel the order comes from, businesses source from the best possible location and choose the best possible routes to take via the best possible carriers to fulfill it. Flexible systems that continuously optimize process flows in real time are becoming invaluable in consistently ensuring OTIF delivery at lowest possible costs.
Q: What are the benefits of combining order and transportation management?
A: The common technology strategy is to accrue as many systems as the capabilities needed. Typically, that means purchasing, an order management system, a transportation management system (TMS), and potentially some multi-modal add-ons and integration layers. A single platform for order and transportation management is a fraction of the total cost of ownership of acquiring several point solutions. Unified technology also simplifies operations and eliminates integration fees and perennial upgrade costs.
Siloed systems also can’t optimize across the entire value chain. An OMS might select the "best" inventory and location to fulfill from, but without end-to-end visibility over both order and logistics management, the data it leverages is limited and therefore suboptimal. Without proper TMS integration, the OMS will estimate costs—which is not really optimizing. A supply chain solution that supports the full order lifecycle is a gamechanger, capturing costs at every touch point and optimizing across all flows and functions.
Q: How does having one integrated view for transport, logistics, and orders foster better collaboration between an enterprise’s functional silos?
A: Most organizations don’t realize the extent to which functional silos impact operations and their bottom line. Each business unit, because it is incentivized differently, tends to narrowly focus on its own objectives without considering how those goals impact other sectors. Logistics professionals might focus on the cheapest way to transport orders, while their e-commerce counterparts may push for high product margins.
Unifying systems on a single platform not only offers insight into the bigger picture: How to optimize across silos, rather than within them. How to improve both operational excellence as well as the customer experience. With a single view across all functions, businesses are able to consider priorities other than cost, and holistically factor all requirements and constraints. That’s a big deal. Integrated views empower companies to make radical improvements by redefining KPIs and reframing initiatives toward greater objectives.