4 Challenges of Supply Chain Order Management (And How to Overcome Them)

Effective order management is a key priority in today’s disruption-prone business environment. How quickly and accurately a business can process and deliver customer orders can, in fact, be a key differentiator in an uncertain yet highly competitive business landscape.

Yet few businesses have truly mastered this crucial aspect of supply chain operations. This can prove costly, given the fast-changing consumer buying patterns.

Consumers today want superfast order processing and delivery. And they are not afraid to choose one business over another for faster order processing and delivery, among several other reasons.

It’s clear therefore that streamlining order management and expediting order processing and delivery are key business priorities today.

The question now is: How can businesses succeed in this endeavor?

The one-word answer is digitalization.

Simplify the end-to-end process by deploying advanced digital order management technology. This can also be a perfect way to kickstart the larger business objective of digital transformation.

What is Order Management?

Supply chain order management is the process of managing and tracking customer orders starting with order receiving and culminating with the final delivery of products or services. It includes several activities such as order processing, inventory management, product shipment and customer service.

In other words, order management includes all activities businesses engage in after receiving a customer order until they deliver the order to the customer. This can include behind-the-scenes collaboration between different teams such as warehousing, inventory management, third-party logistics and shipping partners.

The key objective of order management is to ensure that orders are accurately processed and delivered on time. This can improve customer satisfaction and brand loyalty.

The typical order management cycle includes:

• Order capturing: Receiving and capturing customer orders through email, phone, e-commerce platforms and other channels
• Order processing: Verifying order details, checking inventory and coordinating with suppliers to process the order
• Order fulfilment: Picking, packing and shipping the products
• Order tracking: Monitoring order status and providing real-time updates to customers
• Customer service: Handling customer enquiries, complaints and product returns

Common Challenges in Order Management

Simple as it may sound, effectively managing orders is no easy task, especially for mid-size and large businesses that have to process several orders at the same time. Here are some of the key challenges in this process:

• Disjointed processes

Often, different teams work in functional silos, enhancing the chances of errors in order management.

• Poor data

Bad data can lead to stock discrepancies, delivery delays and errors in order management. Inaccurate inventory data can also hamper order processing.

• Lack of communication

Inadequate communication between suppliers, manufacturers, customers and other stakeholders often causes delays in order processing. Many a time, internal and external stakeholders are not on the same page as they use different data and systems.

• External events

Unforeseen disruptions such as geopolitical conflicts can throw order management as well as the entire supply chain operations out of gear. This was seen during the pandemic-hit disruptions that hampered the supply of critical raw materials.

How Order Management System Works

The key objective in order management is to process orders quickly and accurately. This objective can be accomplished with the help of an order management system that can enhance visibility and track a customer order from start to finish. Businesses can leverage such a system to gain end-to-end visibility and automate most of the manual, time-consuming tasks of order management.

Order management systems also make it easy to collaborate with internal customers using automated processes. The system can generate purchase requisitions prepopulated with the correct account codes, direct them to the right approvers and then convert them into purchase orders.

By simplifying the creation, review and approval of purchase orders, order management technology lets a business take complete control of buying activity and monitor payments made to suppliers. In this process, it can eliminate off-contract spending and align all purchasing activity with strategic plans.

Rapid developments in artificial intelligence, machine learning and robotic process automation will further automate processes in order management. Automation of routine order management processes minimize errors, enhances accuracy and allows the workforce to focus on strategic and value-adding tasks.

With the help of predictive analytics, technology can also help to accurately forecast demand and can even sense changes in customer demand, thereby enabling a business to prepare for potential demand fluctuations. Such capabilities can be a game-changer for a business looking to build resiliency and thrive in an increasingly uncertain environment.

Transform your supply chain order management with GEP’s AI-first software.