As we prepare to buckle down and withstand the rising, variant driven, third wave of the Coronavirus pandemic, the importance of making the most of every moment has never been more top of mind.
When it comes to Digital Commerce this couldn’t be more true and in fact every time your business receives an arrangement is indeed a “moment of truth” both for your customer’s customer experience, in addition to the profitable health of your company.
If you’re managing your Digital Ecosystem correctly, there should be no doubt that the product ordered is actually in stock within your inner facilities or wider external stock network. If this is often not the case, you and I must have a different conversation on how to efficiently fix that problem!
Increasingly, in order to meet quicker delivery timelines and reduce transport costs, many brands and sellers are now opening multiple delivery locations, and as soon as you start more than 1 fulfillment location option, you’ll need some type of Distributed Order Management (or DOM for short) to determine where location it’s best to ship.
We just define as below:
Distributed Order Management (DOM) — A networked inventory and order management system which selects and routes orders to the best fulfillment location based on an automated, rules-based decision process with no need for user intervention.
In the end, it really does not matter what slick network design and software modeling tools you’ve used to design your system, or even what additional product is currently on the way to your warehouse. What REALLY things RIGHT NOW is what happens in that moment in time when that customer places an order on your website, via a market or on a retailers site for drop shipping, as it’s now decision time!
This can run from the very basic of, we have two warehouse fulfillment centers and only one gets the needed product in stock, so it is quite easy to decide to ship from that warehouse!
But what if the product can be found in both warehouses, which do you pick? The answer here requires an understanding and calculation of transport cost from every location.
Add to this the complexity of multi-item orders as well as several warehouse fulfillment facilities, and other outside inventory options, and the choice process can quickly become very intensive.
Here’s a flow diagram illustration of a fully functional DOM capability:
As you can imagine, there’s numerous potential capabilities and functionalities which can be delivered via Distributed Order Management.
Some key areas to focus on to ensure you get the most bang for your DOM buck are:
1) Can the DOM hold distinct inventory costs for various product inventory locations, ie: if contemplating distributor inventory closer to customers there could be a higher cost, but due to proximity to end consumer, overall delivered cost is reduced.
2) Can the DOM leverage stock availability from other system types or does the DOM’s host system should be set up in every location where inventory is to be considered from the DOM logic?
These two items are only the tip of the iceberg in regards to the possible functionality and factors to be considered by innovative Distributed Order Management systems, and we’ll delve deeper into those in our next article All Distributed Order Management Systems Are Not Created Equal.
But for now I’ll leave you with this question, when these moments of order truth start to come by the thousands, or even tens of thousands of times a day, will you be using the most optimal and capable solution to drive the maximum profit and customer delight possible in each moment of truth?