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Inbound Order Management: Challenges and Tips


This blog post is a deep dive on inbound order management, particularly with how supply chain management professionals can help their companies' processes and procedures.

Image representing a supply chain
Although the graphic above might already look confusing, it is still a heavily simplified picture of supply chain reality.

In general, order management consists of all the steps necessary to fulfill an order, from when the order is placed by the customers to when they receive their order, and it coordinates all steps contributing to a great customer experience. In addition, order management often requires collaboration and coordination with multiple partners, both for the inbound and outbound logistics processes. Relevant stakeholders along supply chains are producers, vendors, warehouses, transportation companies, distribution centers, and retailers.


INBOUND ORDER MANAGEMENT


First, inbound order management refers to processes such as the sourcing of raw materials and inventory storage.


More concretely, this applies to businesses that have many customers placing many orders. This touchpoint with clients is extremely important for its implication on customer service and its underlying questions. How do customers place an order? How much transparency do customers get about product availability and delivery times? And how will fulfillment updates be sent? These questions are addressed by inbound order management.


Incoming orders affect Supply Chain Management directly as they influence stock, production, and delivery. Therefore, having knowledge and control of incoming orders as early in the process as possible improves future steps in the supply chain.​


Unfortunately, in the B2B world, most orders are placed via e-mail, phone, WhatsApp, fax, WeChat, or similar channels. This represents a challenge since there’s no data structure standard and orders come in a very decentralized way. Even when orders are gathered in a central place, e.g. an ERP system, global corporates have to overcome the challenge of single regions, or even countries, working in different IT systems. Furthermore, the established process calls for sales teams to receive orders, but the actual fulfillment is carried out by logistics or supply chain management teams. All this likely leads to a disconnect inside the supply chain.


However, this disconnect can be solved so that consumers know whether a certain product is available and when it will be delivered. See below for some tips and tricks to achieve just that.

Dos” and “Don’ts” of Inbound Order Management:

DO

DON'T

Centralize channels to receive inbound order information. E.g. with an online shop or centralized order management system.

Have decentralized and unstructured order intake, e.g. via e-mail or phone and throughout different teams.

Consolidate P/Os. By knowing what customers ordered as soon as possible in a structured way, shippers may consolidate different P/Os to ship efficiently.

Limit efficiency by not having a “global” overview on orders – it will result in unnecessarily higher freight and transport expenses.

Integrate with Stock Warehouse Management to know how (quickly) to fulfill customers’ orders.

Let stock levels go unknown when planning order fulfillment, limiting automation potential and fulfillment accuracy.

Integrate with Transport Management to better plan fulfillment options, cost, and lead times. Let logistics departments know as early as possible what needs to be shipped.

Delay informing logistics teams and service providers about current orders. Transports will be more difficult and expensive. Not sharing transport capacities and costs will lower service quality.

Integrate with supply planning to streamline production planning and/or sourcing and delivery of raw materials.

Avoid looking at real-time demand data. This leads to unnecessarily higher inventory and production cost as well as longer fulfillment times.

Involve customers in the process by requiring as much specific information as possible and updating them along the way (e.g. delivery tracking).

Be non-transparent along the fulfillment cycle, leading to misinformed and disappointed customers.

Finally, having a deeper knowledge of all the steps that make up the supply chain, the challenges that can arise from each of them, and their possible solutions will help businesses to improve workflows, reduce costs, and provide a better customer experience.


 

Logward is a Hamburg & Bangalore based logistics technology company.

We build software, move containers, and change mindsets.

If you have any questions or just want to say hi, reach out to mail@logward.com. Or you can book time with one of our logistics experts here.