The Ins and Outs of Distributed Order Management

While some of us might dread going to the store, shopping as we do is a modern convenience we often take for granted. Whether it’s your local grocery store, a big box retailer chain, or an online storefront, we have an expectation that the products we seek should always be in stock. For most, inventory might as well be handled by magic and mystical logistics elves, making sure that new blender is on the shelf, ready to go to a new home.

Though the reality might not be as magical, how stores handle their logistics through distributed order management and technology is still pretty fantastic. As Supply Chain Digest defines it, distributed order management is “a commerce engine that provides a central solution for managing the information, executing the process, and monitoring to ensure customer orders are fulfilled accurately and cost-efficiently across a complex network of source and fulfillment systems and processes, as well as suppliers.” In other words, it’s a logistics model that unifies the process across the board between wholesalers, the retailers they do business with, and finally passing on those efficiencies to the customer.

Traditional order management, by contrast, lacks this picture of unity; a retailer has their inventory numbers, a wholesaler theirs, and both sides only exchange what information they feel is necessary. Before the digitalization of business and cloud-based computer networks, this system had its place and worked well enough.

In anticipation for sales or heightened demand, store inventory managers would have to buy more stock in preparation for the rush. A lot of estimates and guesswork are involved, based off trends from past sales. If you still managed to sell out though, tough; you’re out of luck.

But that no longer has to be the case.

As computers and networks are built within the web of the Internet of Things, information visibility has become the norm. We live in a time where virtually 90 percent of the world’s data has been produced in the past two years alone. Numbers, information, and multimedia are commodities now with monetary value (this post included). With the current trend (not to mention convenience, speed, and accessibility that comes with it), those who fail to adapt will be buried under all those gigabytes.

So how does distributed order management keep you and other businesses from meeting a similar fate?

Sharing is Caring

Being agile in the 21st century economy requires a bit of give and take with those around you. Despite apprehension about sharing inventory numbers and data privacy surrounding those figures, distributed order management offers distinct advantages in exchange for a bit of faith with your suppliers.

By connecting with your third-party distributors and granting them access to your inventory numbers, your suppliers can better serve you knowing you need more (or have too much) of something and can react accordingly. All this without you needing to count each product and report back to each distributor manually; no more guesswork, no more hoping your suppliers can cover you during peak seasons.

With distributed order management, suppliers can proactively help businesses in a bind with this method. Some might already know this principle as vendor-inventory management.

In addition to increased inventory protections for both supplier and retailer (that is, the retailer won’t run out of stock and the supplier can make sure they have enough stock to then cover the retail shortage), distributed order management also affects customer satisfaction. Quicker orders and better inventory management means less angry customers clamoring for that blender before it sold out.

PetSmart is one of the latest companies to embrace distributed order management. Earlier this summer, the pet supply retailer and its subsidiary web domains announced further implementation of DOM technology to better reach their customers:

“[PetSmart’s] digital presence and omnichannel strategy has become a key focus as it looks to better serve its customers and adapt to new shopping behaviors. The selection of Manhattan’s [Enterprise Order Management Solution (or OMS)] is part of a large strategic initiative by PetSmart to significantly enhance PetSmart’s omni and digital capabilities and to enhance the company’s additional ecommerce businesses.”

OMS, which PetSmart will be debuting later this fall, will “ensure PetSmart has a comprehensive, full-picture view of product inventory” throughout their stores, warehouses, and distribution centers. This, in turn, opens new doors for customers like custom, subscription-based delivery services. After all, Fido needs food regularly too, not just on the first day you brought him home.

In a digital world driven  by speed and convenience, distributed order management is the next logical step in inventory management to keep pace. Of course, for the businesses that like guessing and hiding figures from the loyal suppliers they work with, they can continue on as they always have. But in an economy that’s as fast as Internet data connections allow, your business is only as agile as the systems you build for it.

If you haven’t implemented a distributed order management strategy yet, there’s only one thing left for you to answer: are you going to hop aboard with the rest of the 21st century retailers already reaping the benefits of increased sales, inventory accuracy, and a plethora of other features dependent on the industry you work in and your own creativity (for example, subscription-based delivery for customers is an optional step but you decide whether or not it’s worth it)? Or, are you going to stay behind hoping your numbers add up in time for Black Friday? With customers howling at the gates the morning after Thanksgiving, calling for blood and insane deals, you’ll know quickly which model you’d rather have to stem the tide.

Whether that’s a tool you’ve already equipped or your last wish and regret before being trampled by a mob of Black Friday shoppers… well… that’s up to you.