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Outbound Order Management: Challenges and Tips

This blog post provides useful tips on how to reduce inefficiencies and improve outbounds order operations.


Supply chain representation
A simplified picture of supply chain reality.

Outbound logistics processes include activities such as the order processing, packing, and shipping of products. Before selling and shipping great products to customers, companies need to create said product, meaning that outbound orders usually trigger incoming shipments. Whether exporting goods to sell in a particular region, or manufacturing products to be exported globally, companies send outbound orders to suppliers in order to source raw materials or commodities. These outbound orders are essential for not only stock and inventory management but also production planning. Hence, companies must have visibility into the status and delivery timeline for each outbound order and incoming shipment because of the interconnectedness and complexity of both.


OUTBOUND ORDER MANAGEMENT


Coordinating outbound orders with the timely arrival of incoming goods is called Outbound Order Management. Outbound orders do not necessarily require chronological alignment with inbound orders. Moreover, depending on whether operations teams follow make-to-order or make-to-stock principles, in- and outbound order management may be separate processes. However, the balance between demand and supply must be kept.


A common challenge is suppliers talking their “own” language, while transport partners also speak their “own" language. For example, a company orders and tracks the order internally as "Reference 123". The freight forwarder then might split the order and deliver it in three slots, each called "Ref XYZ". This creates difficulty in maintaining a clear logistics overview and effective communication. So, easing communication will facilitate workflows and improve the relationships with all the stakeholders. One way to do so is to centralize communication channels or use a centralized order management system.


Route selection presents an additional challenge because shippers have many options and factors to consider. Avoiding delays, minimizing extra costs, and reducing exposure to risks all impact what could be the optimal route. Furthermore, route selection affects the fulfillment of inbound orders. This has an impact on manufacturers' warehouse planning and the fullfillment of their customers' orders.


Below are some “Dos” and “Don’ts” of Outbound Order Management:

DO

DON'T

Establish a clear communication system with your stakeholders

​Use internal language to communicate with partners since they might use a different "language"

​Analyze past transportations to reduce costs and optimize planning

Underestimate the need for visibility into all transports

​Gather accurate inventory data to prevent stockouts

Over-expand inventory just to meet demand changes, which might incur extra costs


Ultimately, customer satisfaction and reduced costs are the goals of outbound order management. Additionally, despite usually being analyzed separately, inbound and outbound order processes need to take place in sync because both make up an efficient overall order management and improved supply chain. To avoid inefficiencies like delayed deliveries, shippers should follow the dos mentioned above by using tools like Logward's Order Processing, which empowers collaboration and centralizes incoming and outgoing purchase orders.


 

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.