What Is Distributed Order Management (DOM)?

Multichannel. Omnichannel. Dropshipping. 3PLs. Buy-Online-Pickup-In-Store. Buy-Online-Return-In-Store. Fulfillment By Amazon. And, on and on and on…

Never before have so many different ways to conduct business existed, and this expansion has pushed many eCommerce merchants to their limits. The simplicity suggested by various models (D2C, B2B, etc.) has been turned on its ear, and what was once fairly straightforward has become extremely complex.

The tools of traditional order management are no longer sufficient to address the myriad of challenges posed by exponential eCommerce growth. 

How, then, can brands rein in multiple sales channels, diverse supply chains, and varied inventory spread across different fulfillment locations while still providing an excellent customer experience? 

The answer lies in Distributed Order Management (DOM).

At SkuNexus, we design DOM solutions to help companies take command and control over their entire eCommerce backend. Here, we would like to give an overview of distributed order management systems and explain what they can do for your business. 

What Is Distributed Order Management?

To understand DOM, you do not need to forget everything you already know about order management. It’s not like that. Rather, the platform builds on top of a standard order management system (OMS) by adding cost-effective, automated, rule-based procedures to direct order routing and optimize fulfillment.

Whereas the traditional OMS can still support small online merchants with a minimum of sales channels and fulfillment options, larger brands demand something more. The distributed system empowers medium-to-large eCommerce merchants to manage a vast web of sales, inventory, fulfillment, and supply chains. 

D2C Order Management & Omnichannel Retail Fulfillment

Online customers do not care, or think, about what happens once they make a purchase, but they expect speed, accuracy, clear communication, and above all, convenience. To be able to optimize fulfillment and give customers everything they desire, DOM will make a series of decisions based on a vast array of data.

The power the DOM system affords has given rise to an entirely new concept: Buy/Fulfill/Return anywhere. This is effectively the definition of omnichannel fulfillment - customers want the entire transaction on their terms and merchants now have the capacity to meet those demands.

• Rules will establish the steps taken to determine where an order should go.
• Proximity to the customer, available inventory, and dropshipping options can all be factored into this automated decision process.
• Custom attributes may also be factored into rules. Any information related to the order, customers, products, etc., may be used to further control order routing.
• The system will go through a “waterfall” decision-making process to select the best option(s).
• For example, it will check inventory levels at each location, in order of proximity, until inventory for a particular order is found. 
• At that point, the order will be routed to the location with confirmed inventory.
• This allows for multiple fulfillment locations per item and order (can route to 3PLs or store locations if necessary).

• Additional rules will select how the order is fulfilled.
• In addition to fulfilling and shipping from one’s own warehouse, the range of omnichannel fulfillment options can include:
  • Buy Online Pickup In Store (BOPIS)
  • Buy Online Pickup Curbside (BOPAC)
  • Ship From Store (SFS)
  • Buy Online Return In Store (BORIS)
  • Any number of variations involving 3PLs and dropshippers for fulfillment/returns.

It must be reiterated here that an essential part of any effective DOM is clear, real-time inventory visibility and communication. With orders coming in from a plethora of sales channels, anything less will result in chaos. 

B2B Order Management

While online wholesalers may not see the same number of individual orders as their D2C counterparts, a distributed B2B order management system is no less important. B2B eCommerce customers often demand speed and accuracy at an even greater level, and their orders are typically higher in both volume and complexity.

When applied to B2B, DOM helps improve the performance of, and relationships between, wholesalers and their partners/customers.

Supply Chain Order Management

DOM has proven itself to be extremely flexible in its applications, and some large enterprises have begun employing it in reverse, i.e. they are using a supply chain order management system to direct the flow of inbound goods across many locations of a vast distribution network.

For example, a company may use a DOM system to make decisions on where imported goods should go before they even arrive at a shipping port. Choices about whether items should be routed directly to customers or to any number of distribution centers, etc., can be informed by macro data similar to that used by a D2C merchant to route orders to individuals.

What To Look For In A Distributed Order Management System

Because the DOM model takes a holistic approach to the eCommerce backend, it needs a comprehensive software solution - several features are critical for success.

It should come as no surprise that we consider seamless software integrations to be the most important feature of a DOM system. The ability of your order management software to communicate with all manner of different systems is mission critical. Any breakdown here will have a ripple effect that disrupts other areas of your business.

By definition, a multichannel order manager needs to mesh with sales and fulfillment channels (shipping carriers, 3PLs, dropshippers, FBA) as well as other types of platforms (ERP, POS, PIM, BI, eCommerce marketplaces, et al). This allows for quick and easy onboarding and ensures clean, uninterrupted communication throughout your tech stack.

Data is the fuel that powers management software systems, but that data is marginalized at best, and useless at worst, if it cannot easily flow internally and between outside platforms. 

Information sync is a crucial function that ensures the same data exists between various endpoints throughout the system. This is vital for maintaining accuracy and consistency and many merchants assume it just happens automatically. Needless to say, it does not.

Any lags in data sync are windows for errors to occur. In the simplest of examples, imagine if a customer places an order for an out-of-stock item shown to be available due to lagging inventory data. It will result in a negative customer experience at best and quite possibly the loss of that customer forever.

A worthy DOM system allows information flow from eCommerce, ERP, and any other integrations, by continually pulling data as quickly as connected software provides it. This maintains 100% inventory accuracy across all channels and can save as much as 30 minutes (or more) per order. Factor that out over time and the increased efficiency and productivity provided by this feature becomes abundantly clear. 

The complicated nature of order management can provide many opportunities for confusion and human error. All the more reason that a solution needs to offer clarity whenever possible.

A DOM system with customizable order statuses makes it easier for employees to see open orders awaiting fulfillment, distinguish between sales orders vs. purchase orders, etc. These should be customized to fit exactly within your company's existing workflows.

Orders may also be “tagged” with custom attributes for use during the order fulfillment process. These will both direct employee attention to those orders and/or drive further automation decisions.

Your inventory and warehouse systems should be part of the whole package as opposed to separate software entities, and they should provide deep enough functionality to address current needs as well as accommodate your growth well into the future.

This means automation throughout all processes, demand planning and forecasting capability, and software with the flexibility to add anything from single SKUs to entire warehouses.

The DOM systems we build at SkuNexus are designed to provide control, increase efficiency, and help scale a brand’s eCommerce business. Our comprehensive solutions power large-scale online retailers from eyewear to ice cream.

If you would like to learn more about SkuNexus, please schedule a demo.

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