Order Management System: the ideal tool for a successful omnichannel strategy

By Axelle Drack

Published: October 16, 2024

In the age of omnichannel commerce, an Order Management System (OMS) has become a must.

The rise of e-commerce and digitalization has created new consumer demands for a seamless, unified shopping experience, whatever the sales channel.

The use of OMS enables retailers to meet these new challenges with greater efficiency and agility, while optimizing lead times and costs.

Find out exactly what an Order Management System is, how it works, how it perfectly complements an ERP and our top tips for choosing your software.

Let's get started!

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Definition of an Order Management System

An Order Management System (OMS) is an intelligent tool for optimizing inventory and order management across all sales channels. Its aim? To deliver the smoothest possible customer experience.

It interconnects with other supply chain solutions (CRM, PIM, ERP, e-commerce site), exchanging data in real time to offer 360° visibility of omnichannel retail activity.

You can see at a glance :

stock availability,
delivery times,
logistics costs,
order processing,
order tracking, etc.

Equipped with a system for synchronizing data flows and cross-analysis between company constraints and customer needs, it enables the best supply solutions to be proposed (click & collect, fast delivery, etc.).

🇫🇷 The French translation of order management system is: système de gestion des commandes.

How does an Order Management System work?

An Order Management System acts as the orchestra conductor for your orders, doing everything in its power to serve customers better and close more sales.

OMS functionalities

Here are the main functionalities offered by an Order Management System:

proposing different delivery options to customers,
intelligent selection of the best stock to pick for each order,
recording and centralizing orders
Sending order details to warehouses or external service providers,
automatic updating of stock inventories,
order tracking for customer and customer service,
alerts on stock levels to avoid shortages, etc.

Here's an example of what an OMS dashboard might look like on TradeGecko software:

How does OMS work in practice? Application examples

Choosing the most appropriate stock for an order

OMS is capable of responding to orders in real time. Using algorithms and data flows, it can analyze criteria such as the customer's address and product availability in a matter of moments, in order to "pick" the nearest stock for faster delivery.

It can also offer customers different options, which they can consider according to their priorities:

preferred delivery method,
speed of delivery,
price.

👉 It can also take into account orders with several products in different warehouses.

For example, it can offer the customer :

to receive the fastest available product first, and the second later,
save on delivery costs by having both products delivered in the same parcel, but with a longer lead time, etc.

Helping you make decisions

Its data feeds are an invaluable aid to rapid, informed decision-making.

Indeed, one of the major logistical challenges is to juggle :

satisfying customer demand as quickly as possible,
minimizing storage costs.

It is therefore possible to configure OMS according to your needs, with rules that you have determined beforehand to help with this type of arbitration.

For example, if the cost of storage is more expensive in a warehouse or store, you can imagine a setpoint that determines from which stock the product will be taken in order to optimize margin, without compromising on-time delivery.

Netsuite dashboard :

Quickly manage product returns

According to a study by WBR Insight, nearly 9 out of 10 consumers consult product return conditions before making a purchasing decision. Returns are a major issue for online retailers, and have become a crucial selling point and an undeniable element of customer satisfaction.

But managing returns and reinserting products generates considerable additional costs, on top of the return costs if they are covered:

new storage costs,
processing costs (restocking, inspection, etc.),
new shipping costs, etc.

The single view of inventory offered by OMS means that return management solutions can be devised more quickly for the consumer and less expensively for the company. For example, by proposing a return to the nearest store.

The benefits of an Order Management System

The agility resulting from the use of an order management system improves the customer's experience throughout the order process, thanks to :

error-free delivery information,
more choice in delivery methods,
easier product returns,
visibility of order status, etc.

Differences between OMS and ERP?

Do you already have an ERP? Then why bother with an order management system? It's a legitimate question.

In reality, these software packages are complementary, and meet different needs:

an ERP is a planning solution, which, based on an inventory for example, will enable you to anticipate future orders and thus adapt production and all the rest of the supply chain (raw materials purchasing, planning, etc.) accordingly.
while an OMS is used to optimize stocks and actions according to the arrival of orders in real time,

If you want to be able to offer different delivery modes, and improve your multi-channel management and product returns, equipping yourself with an OMS will take you to the next level of agility and performance. You can even opt for an ERP with an order management module, like Netsuite, which integrates a native CRM.

Summary of the differences between ERP and OMS :

OMS	ERP
Real-time view of inventory (movements, transits, supplier availability, etc.)	Accounting view of inventory
Real-time optimization tool	Planning tool
Allows you to adapt	Allows you to anticipate

How do you choose your Order Management System?

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There are a few points to consider when choosing the right OMS software.

Here are the different functionalities and specificities to consider according to your needs:

automation of a maximum number of tasks to avoid error-prone and time-consuming manual actions,
multi" management of different sales channels, currencies, countries, warehouses and stocks,
business intelligence capable of providing powerful dashboards, exports and data reports to identify areas for improvement,
access to an API enabling connection to a maximum number of software applications in the logistics ecosystem (WMS, ERP, CRM, etc.),
the software's ability to offer new functionalities and adapt to your evolutions.

Some essential software

Cegid Retail is a unified commerce platform that can be integrated into an omnichannel sales strategy to boost performance, automate management and deliver a fluid, personalized customer experience:
- powerful business intelligence to make the right decisions.
- omnichannel order processing,
- inventory and cost optimization.

Channable is a workflow management and automation solution, enabling you to interconnect your e-commerce site with multiple marketplaces to increase visibility:
- automatic centralization of orders from different marketplaces,
- real-time stock updates,
- delivery tracking and order status visibility.

Oracle's Netsuite is a complete process unification software suite, including ERP, CRM, WMS and order management and optimization:
- real-time visibility of sales, stock levels and customers,
- rationalization and automation of orders for optimized processing,
- transparent, easy and supported returns management.
Yoo Soft is a unified commerce solution with an OMS module for orchestrating orders and unifying inventory. Simplify your chain's omnichannel processes with a 360° view of your inventory.