Supply Chain Comment

By Jim LeTart, Director of Marketing, RedPrarie

December 1, 2011

Distributed Order Management: It’s not just about the Order

Customer Lifecycle Management Married Combined with DOM Optimizes Customer Experience

Distributed Order Management (DOM) has historically been about how retailers, manufacturers and distributors fulfill orders within customer delivery windows as cost effectively as possible. It looked at where the inventory was and how cheaply it could be shipped. In other words, it was focused on what was best for the supplier. But in today’s consumer driven all-channel marketplace, those are just table stakes. What industry leaders today and tomorrow must focus on is optimizing the customer experience through Customer Order Lifecycle Management.

What is Customer Order Lifecycle Management (COLM)? It’s a holistic view of order management that focuses on the many touchpoints of customer interaction, not just the most efficient way to ship orders on-time. For example, a customer may be shopping on their smart phone for a sweater and want to know if you have the color and size they desire, and which local store they can pick it up at. The customer may order the sweater and drive down to pick it up. Or they may decide to have you ship it to their home, and it’s up to you to decide if it’s best to ship it from a local store or your regional DC, or even have it drop-shipped from the supplier.

LeTart Says: To optimize the customer experience and maximize revenue potential requires a much more comprehensive Customer Order Lifecycle Management solution. What Do You Say? Click Here to Send Us Your Comments Click Here to See Reader Feedback

As this simple example suggests, order management is a lot more complex in the "buy anywhere – fulfill anywhere – return anywhere" consumer driven marketplace. And we’re not just talking about retailers. This applies to any business that accepts orders through multiple channels.

COLM begins with all-channel inventory visibility and order capture capabilities that provide consumers, call center and store personnel visibility to merchandise anywhere in the network, including within your DCs and stores, at your 3PLs, or from your vendors. COLM must be able to intelligently source the potential order based on inventory availability at any of these locations and the optimal transportation cost / service ratio so the customer can be provided with shipment options and delivery dates. This includes supporting the "endless aisle" concept within the store. COLM must also be aware of pricing and promotion information so the correct total cost can be quoted to the customer, including applicable taxes. And there must be integration to payment systems to process the order.

Once the order is placed, COLM uses traditional DOM logic to intelligently source and fulfill the order. This may include sourcing from a store for either shipment or customer pick-up. To do this, there must be awareness of store workforce capacity and the ability to schedule the fulfillment tasks.

But of course, things change. The customer may decide they want the blue sweater instead of the red one. Or they may decide they want to pick it up in the store instead of having it shipped. COLM must be aware of order status in real time so options can be correctly presented to the customer either online or through the call center. Or there may be a problem on your end such as damaged or phantom goods. These order exceptions may require human intervention and eventually must be re-sourced based on the changes and resolutions. And the customer must be notified of resolutions, shipment information or other events.

Finally, COLM must handle returns and exchanges initiated from any channel touchpoint to be returned to any location. This includes proper disposition of the inventory, repair, credit considerations, and replacement or exchange, as appropriate.

Of course, today’s marketplace is even more complex than described above. Traditional DOM approaches only handle a portion of what is needed to effectively manage these scenarios. To optimize the customer experience and maximize revenue potential requires a much more comprehensive Customer Order Lifecycle Management solution.