What is ERP Customer Order Management Software?
Order management starts when a customer places an order and ends once they received their product or service. An ERP software with customer order management not only improves order fulfillment but also improves customer satisfaction by delivering products or services that meet customer expectation.
Why is Order Management Important?
No matter how big your business is, you need to be able to track and manage Customer Orders from Order Entry through fulfillment and post-sale support. In addition, Order Management in an ERP software system enables you to prepare for the increase in sales as your business expands as well as ensuring that you are delivering product or service that meet customers’ expectations. As orders increase, the complexities of order fulfillment can be a daunting task. But using the right ERP software system will reduce the burden through the efficiencies of having an integrated system, which saves time and money, while efficiently allocating resources. Without an order management process in place, orders could:
- Get missed
- Be inaccurate or wrong
- Go unfulfilled
- Take longer to ship than initially determined
If a customer experiences any of the situations mentioned above again and again—or even just one time—that customer might cultivate a negative perception of your business’s operations, making it easier for competitors to offer a better solution. In short, Order Management helps:
- Centralize Customer Orders for tracking and management purposes
- Identify Customer Requirements
- Provide the Necessary information to efficiently and successfully complete the Order Fulfillment process
- Manage complex shipping schedules
- Ensure order fulfillment is complete
The features of an Order Management Software
No matter the complexities of a customer’s order, an Order Management system must be able to handle the variation in order to capitalize on the digitalization of sales and the acceleration of the subsequent fulfillment processes. In addition, the alignment of the current Business processes and needs must closely match those available within the Order Management system in order to have the ability to identify all of the Customer Requirements within the ERP Order. How closely this alignment is, can be a deciding factor in your Business success. An ERP Software offers support within these areas in the Order Management process:
Accounting Integration
Streamline all of the financial data and transactions and eliminate the need to enter or transfer manually. Typical financial transactions from the Order Management process consists of Accounts Receivable.
Customer Database
A consistent input of Customers, Customer Contact, Bill to and Ship To information into each order is important for obvious reasons. An ERP software has a separate area for managing all of your Customers information including all contact information, Bill To and Ship To Locations, Accounting Defaults, Accounting Receivables Status, Shipping Accounts, and Part Number lists.
Item Master Management
A consistent input of items ordered is critical to eliminate data entry errors and provide the pathway to the Order Fulfillment process. For manufacturing and service businesses, the accuracy of what was ordered is critical to the successful fulfillment of the order. For this reason, an ERP software has a separate area for managing all of your Item Master data that includes common data such as Make or Buy part, Lead Times, Inventory Levels, etc..
Work Order Management
For manufacturing and service businesses utilizing a Job Shop approach to order fulfillment, accurately creating the work orders necessary to successfully complete complex delivery schedules of order fulfillment is critical for success. Inaccuracies of Quantities, Items and Due Dates will have negative impacts including customer satisfaction.
Customer Requirement Identification
The complexities of products and services offered as well as ordered by customers, requires Order Management systems to be flexible, but must also include the necessities of identifying all of the internal information to successfully fulfill each order and the ability to identify all of the Customers’ Requirements within each Customer Order. Not having a complete understanding of what was ordered can lead to unsatisfactory fulfillment.
The benefits of an OMS
Having accurate, complete and well-defined Orders make for improved customer satisfaction, shorter manufacturing times and ultimately more profitability for your company. Here’s just a few benefits to have an Order Management system in your business.
Accurate Orders:
An order, in any order management system, should be entered in a manner that replicates the information in the Customer’s Order, and with any additional information necessary to process it through the factory. In manufacturing or service industries, the most Common information on Customer Orders consists of:
- Purchase Order Date
- Purchase Order Number or ID
- Payment Terms
- Freight Terms (tangible goods)
- Line Item Sequence ID
- Product or Service Ordered
- Quantity of Units Ordered
- Expected Delivery, Dock or Service Date(s)
- Price
- Customers Terms and Conditions, including Quality Clauses
- Ship To Address
When orders are entered, they should contain the maximum amount of information, eliminating the need to go elsewhere. An accurate entry is required to ensure that all downstream processes such as material requirements planning, and production has the information necessary for a successful fulfillment.
Consistent Process:
Organizations should identify a process of how orders are to be entered, based on the types of products and services they provide, as well as the demands of their customer base. In addition, a business should consider a check and balance process to verify the order has been entered in such a way that all downstream users and resources have the information necessary for successful completion. A common approach is to utilize an Electronic Contract Review process that encompasses a set of functional groups to review the Order to ensure the organization can meet the requirements as well as plan ahead to ensure best possible fulfillment success.
Forecasting Inventory:
With a centralized order management system, resources can be realized, and proper planning can be performed. Once such resource is Inventory. The Material Requirements Planning process in an ERP software uses a comprehensive algorithm to determine the materials needed to satisfy the requirements for all open orders. This process uses current Inventory Levels, future Inventory Receipts of Open Supplier Purchase Orders and Planned and In-Process Work Orders, to identify what actions are required, what material is needed, how much material is needed and when the material is needed. In the complex realm of manufacturing and service industries, this process is a necessity to minimize cash-flow and maximize profits by eliminating excess material and having the correct material, in the right amount and at the right time.
Real-time reporting:
In the manufacturing and service industries, processing an order takes time. As the manufacturing and service processes take over in the fulfillment process, having real-time time information on when the order is expected to be fulfilled is priceless. When the number of Orders increase, and the number of un-fulfilled orders grow, having quick access to information is vital.
Sales Reporting:
Analytics play a key role in determining how a business is doing. Understanding who your customers are, what products and services are being ordered, and the revenue realized, helps corroborate business goals and objectives. Sales Trends play a key role in decision making and helps identify areas of concern, diversification paths moving forward and perhaps the sales channels that require attention.
Considerations for choosing an ERP Order Management system for your business
It is important that businesses review their goals, objectives and needs from an Order Management system. Understanding the Who, What and Whys of the Order Management system is critical. Many stakeholders, ranging from team members, to suppliers, to customers, are essential to help determine which features are necessities and which are a nice-to-have item. Some of the Topics of Discussion might include:
- Do we use Internal Part Numbers within Orders?
- Different Customers can have identical Ordering Part Numbers, how will those be handled?
- How do we handle Customers’ Product Revision Levels?
- How do we handle Scheduled Delivery Dates?
- How to handle Customers Unit of Measure (UOM) versus our Internal Manufacturing and Purchasing UOM?
- How do we communicate Customer’s Terms and Conditions, and flow down within?
- How do we communicate Customer’s Product Requirements such as Specification Requirements, and flow down within?
- How do we communicate Customer’s Quality Clauses, and flow down within?
- What will be the content of our Order Acknowledgment and process of Order Acceptance?
- How do we handle multiple Ship to Addresses?
- What important characteristics of our products or services that we should identify in each order line item?
Finally, review what different software options offer. It is recommended that businesses choose software that not only closely matches their current processes, goals, needs and objectives, but also has the features that may be required as the business or industry grows or changes in the future. Getting the most out of the ERP Order Management system, is the ultimate goal of you and your team.
Choosing SimpleManufacturing™ as your next Order Management System
A solution like SimpleManufacturing™ will help you scale your operations with ease while gaining real-time insights that help manage every aspect of your order lifecycles. Our flexible approach, with a focus on the efficiency of the order fulfillment process and the seamless integration with your current processes, promotes the building and retention of your customer base. Our flexible approach of order content, within the Order Management system, allows for the most simplistic case identifying:
- Customer
- What is ordered
- How many ordered and
- When needed,
But also accommodates the most difficult manufacturing environments such as Make-To-Order that may have complex demands such as:
- Customer and Internal Part Number Identification
- Scheduled Delivery Dates
- Scheduled Work Orders
- Multiple Ship to Address(s)
- Specification Requirements
- Quality Clauses
- USA and Foreign Pricing Option
- Serialization
Our focus on efficiencies, within the Order Management system, resulted in Single-Click features such as:
- Viewing Line Item Part Information
- Viewing Customer Info
- Viewing Order Acknowledgement
- Creating Contract Review for Functional Group Approval
- Sending Out Contract Review request, and
- Emailing Customer Order Acknowledgment with Digital Signature
In addition, the seamless integration throughout the ERP system, provides for real-time order status as the order progresses through the fulfillment process.
