Distributed Order Management (DOM) may not be a familiar term, but it is one you should quickly begin to understand. As the ecommerce industry continues to become more customer-centric, omnichannel retail will continue to gain prominence as the sales model of choice.
Distributed Order Management (DOM) is a method used to optimize fulfillment so orders arrive to customers on time while incurring the lowest possible cost. Distributed order management systems are software that help orchestrate this process and improve overall supply chain by automating several functions, including order routing, order splitting, shipping, inventory forecasting and reordering, and inventory management.
Consumers want to buy a product from a variety of channels, bounce between platforms, and even order online directly from within a store and have it fulfilled in a way that suits them. Both physical stores and ecommerce platforms need to work together. Blending multiple platforms without impacting the customer experience is essential.
A distributed order management system is one that has been designed to make it easier to meet the demand for products that stems from this industry shift. Omnichannel retail is increasingly complex, and distributed order management is a way of unifying your business in this new age of commerce.
As ecommerce technology continues to evolve with social media, apps, and third-party retail platforms, brands are being forced to accommodate just as quickly. This can make managing inventory increasingly challenging, leading to a call for backend technology that provides a backbone for brands to fulfill this expectation in a flexible, cost-effective, and efficient way. A DOM system provides the support brands need to deliver high-quality customer service, as well as boost brand trust and customer satisfaction.
The primary purpose of a distributed order management system is to improve how your company processes and manages customer orders and inventory across your business. Quickly replenishing stock and fulfilling orders is crucial for businesses that want to optimize spend while keeping the integrity of their customer’s journey.
Distributed order management systems help streamline stock replenishment by connecting the different technology you use to order more items. They do this by creating a central platform that contains a single viewpoint of every item in your inventory. This allows the modern business to control their inventory better and ensure that all components are in place. It also ensures that current and future consumer demand is met while balancing the need for improved budget control, inventory levels, logistics, and the utilization of existing assets.
Establishing this single, global view of inventory, shipments, orders, and suppliers also directly influence the customer experience because it allows you to meet every retail business’s core promise to consumers – the timely delivery of their order. The last thing you want is to trigger negative customer feedback because of a late shipment or a last-minute order cancellation, and DOM systems help you get ahead of those scenarios.
For brands that are relying on legacy infrastructures, the source of the problem is their static model. Legacy infrastructures are not flexible enough for businesses in the digital age. Distributed order management systems – having been built at a time when omnichannel retail is the new standard – are made specifically to handle the unique complexities of these models with ease. They provide access to several different fulfillment methods through integrations, making it easier to optimize all stages of the fulfillment process without adding too much complexity to your business.
Robust distributed order systems include:
While this seems like a comprehensive range of valuable assets, it merely scratches the surface of what is possible with the right distributed order management system. While implementing a distributed order management system into your existing processes can be complicated, the benefits of improved visibility, customization, and inventory accuracy are worth the effort.
Retailers are more reliant on effective inventory management and order fulfillment than ever before, which is why many of them turn to distributed order management systems. They use DOM systems for a variety of reasons, including:
Collectively, these features allow your customers to have more control over when and where they purchase while helping you to track their engagement and connect the dots if they decide to purchase from a different channel each time.
Distributed order management isn’t just limited to direct-to-consumer businesses. The benefits of these systems can also apply in a business to business structure, bringing a greater level of visibility, flexibility, and synchronization with wholesale partners and distributors.
The fact is that in the modern business climate, all retailers should be making use of a distributed order management system. It has become the new normal in terms of retail management.
But how do you know when it’s time to use DOM? It depends on what stage your business is currently in and where you see the most friction. The retailers that benefit most from a DOM will be those that have:
There are many differences when comparing distributed order management with the older, more traditional systems of order management. Distributed order management systems prioritize integrations, data connectivity, and automation, setting them apart from legacy systems.
These focus areas are exactly why distributed order management is no longer a trend and now necessity. It is also the reason why trying to bring both systems together can be inherently challenging.
Legacy order management systems (often known as OMS), were designed long before the concept of omnichannel retail. That means that they lack the flexibility to support multiple channels for modern retail distribution. They also lack the speed and efficiency to access some of the preferred fulfillment methods used by retailers. That’s because they are designed to work as a solo process. They simply connect a limited amount of channels to a single source of inventory, usually disregarding where that inventory is located. This has the effect of dramatically limiting the visibility of inventory at every key stage of the supply chain. That visibility is vital.
Channel managers and fulfillment operations staff need to know what is available and where their stock is to fulfill customer orders. Distributed order management provides a real-time hub for this data, allowing everyone to access it at the same time. This ability to quickly access data and combine internal and external data sources helps improve your company’s productivity, eventually increasing your capacity to fulfill more orders.
Legacy systems tend only to be used for the processing of orders. Distributed order management systems focus far more on accommodating the different methods and techniques for order fulfillment that a company might need to use.
It does this by integrating with suppliers and third-party businesses that you rely on. Distributed order management streamlines the entire fulfillment process for every order by being much more transparent in its presentation and collection of data. This provides access to many new capabilities.
Another critical difference between a legacy OMS and a DOM is how quickly they can adjust to new requirements in retail. While they may have certain similar functions, a traditional OMS is limited. A distributed order management system doesn’t face the same limitations because most are built on cloud technology and a multi-tenant architecture. That multi-tenancy is crucial because it improves efficiency and is inherently scalable at any time. All of these factors need to be a priority for retailers.
From replenishment to customer experience, a distributed order management system is the evolution of traditional OMS and needs to be adopted if a retail company hopes to stay responsive and flexible in the digital age.
By giving retailers a more comprehensive view of their supply chain, distributed order management allows for more control over supply chain management, order coordination, and access to a real-time view of orders being processed and inventory that is in transit. This means that businesses can take advantage of improved flexibility and a higher rate of efficiency and effectiveness. They allow this because they offer many benefits that traditional OMS lack.
To choose the best-distributed order management system, you will need to have a clearer picture of what you hope to achieve. However, there are some key questions and elements to address when it comes to choosing the system that is best for you, your company, and your future growth. It means taking some well-defined steps.
This needs to be discussed across your entire business. Take the time to investigate what you need your new system to do for you. Include every department in your corporate structure and don't forget to discuss your expectations and plans with your suppliers. You need to have an aligned focus to choose the distributed order management system that best suits your needs.
By questioning as much as possible, you will develop a much clearer picture of your requirements over the features and functions that are nothing more than nice to have. Consider your answer to the following questions:
You will need a vendor for your distributed order management system, and by drafting a proposal, you can organize the selection process. That’s because it will contain the core features that you are hoping for, as well as the technical requirements that you need. The key elements to include in your proposal are:
This will provide both you and your DOM vendor with the technical specifications to help quickly determine if they can match your needs.
You will be more satisfied with your final system choice if you have a stronger awareness of what the key features and limitations are of the available systems. Find a variety of DOM vendors and discuss their systems with them.
At this stage, it is often a good idea to make use of trials and demos of the systems that you have narrowed down. This gives you a much more effective means of evaluating the ease of use and the practicalities of training on a new system. It is also a smart move to check customer reviews on sites like GetApp, G2, and Capterra, as this will give you a much more unbiased perception of the tools.
It’s also worth remembering that ecommerce platforms like Shopify and BigCommerce also host reviews for integrated products. These reviews sections can be a valuable source of unbiased and practical reviews.
It is challenging to find a system that will always fulfill 100% of your requirements. In those cases, it will be essential to make the trade-offs that will ensure that the features you lack are not going to hinder you.
Make sure that you get the features and functions that are most vital to keep your business running smoothly. However, don’t merely evaluate the inventory management software itself. Make sure that your system vendor is a good match for your brand.
Follow these steps and your distributed order management system will be easier to find. Consider as many additional elements as possible so you have a clear picture of your exact needs, as well as what you can live without.
Once you’ve narrowed down your final selection of potential software, it’s time to ask the harder questions.
Distributed Order Management can transform a business. Make sure that you are not relying on outdated legacy OMS. Look at the capabilities of modern solutions and your business will be more effectively positioned to optimize the customer experience.