Blog Posts Why an Order Management System is Critical for Inventory Visibility
“A key ‘must have’ for effective omnichannel fulfillment execution is a complete view of inventory, so obtaining inventory authority should be a top priority for investment,” explains Manhattan Associates’ Chris Shaw in a recent blog post urging retailers to go “all in” on omnichannel and a strong order management system (OMS).
The value of an OMS for optimizing inventory and improving visibility is discussed extensively in a new whitepaper published by Saddle Creek. The report examines how the technology helps to address omnichannel challenges like these and identifies issues retailers should consider before investing in an OMS.
Following is an excerpt…
Utilizing an OMS to Deliver an Outstanding Omnichannel Customer Experience
Optimize inventory across multiple locations/channels
In an omnichannel environment, silos are simply not an option. Rather than keeping all of their products in one location or stocking separate inventory for each channel, retailers need to distribute inventory across multiple locations – brick-and-mortar stores, various warehouse locations, vendors (for drop shipments) and more. This helps to move products closer to the consumer for faster, more cost-effective service.
Buy online pick up in store, for example, is becoming increasingly common. By 2021, 90 percent of retailers will offer BOPIS, Retail Touchpoints reports.
The key is to have inventory readily available and accessible. Neary three fourths (72 percent) of consumers will buy elsewhere if an item is out-of-stock in store and associates are not able to find it in another location, according to an IBM study.
An OMS provides enterprise-wide access to inventory regardless of its location – warehouses, physical stores, vendors, in transit and available to promise. The system can determine which fulfillment source to pull from to ensure the fastest and most affordable service. In addition to improving order routing, an OMS’s ability to optimize inventory helps to reduce inventory carrying costs.
With multiple sources of fulfillment, omnichannel retailers need comprehensive, accurate, up-to-the-minute information about where their inventory is, how it is moving and where it is needed. This helps them understand what they have available to ship and available to promise while helping to prevent stock outs and overstocks.
The ability to find inventory information online is a high priority for many consumers as well. They not only want to check in-store availability of an item, but they also want to have visibility into actual inventory levels (e.g., 5 left in stock). In fact, 79 percent consider this capability important enough to influence where they shop, a 2017 IBM study reveals. Seeing the quantity available for products online can also give shoppers a sense of urgency to complete a purchase. Consumers also want to be able to track their orders and see when they will be delivered.
Technologically advanced retailers have a distinct competitive edge in terms of visibility. With an OMS, they have the ability to see inventory across their entire enterprise. They’re also able to view orders as soon as they’re placed all the way to the end customer . . . and back if necessary. In addition to improving visibility internally, they can share detailed information with their customers – from online and in-store product availability to backorder status to shipment tracking.
To learn how an order management system can help to address other common omnichannel challenges, read the whitepaper.