What is distributed order management?

Competition in the e-commerce market is stronger than ever before. Not only are there an incredible number of brands on the market, but customer expectations are through the roof. Consumers want their packages as quickly as possible, from multiple channels, without any extra hassle or added costs.

For e-commerce brands, optimizing their fulfillment operation is the key to providing the most customer-centric journey. This means stepping away from more traditional methods of order management and fulfillment and embracing a tech-forward, automated approach.

For many companies, distributed order management may be the missing piece. But, what exactly is it? In this blog, we're going to define distributed order management (DOM); who should use it, why it's important for e-commerce brands, and what to look for in a DOM system.

Let's get started!

Distributed Order Management 101

Distributed order management: Defined

Distributed order management is a customized, tech-forward approach to end-to-end fulfillment that includes automated processes and rule-based logic for managing orders online, offline, and everywhere in between.

Distributed order management vs. traditional order management

Where traditional order management has limited functionality for order distribution (i.e. only supports managing inventory from one primary source), distributed order management supports a wider fulfillment network: one that includes platform integrations, flexible fulfillment options, multiple sales channels, and various retail partners.

Some of the top key differences between traditional order management systems and distributed order management systems include:

• Real-time data. Legacy systems typically offer batch processing where inventory data is only updated at certain intervals. DOM systems offer centralized, real-time inventory visibility for efficient management.
• Flexible fulfillment options. Where a traditional order management system might only offer direct-to-consumer shipping or in-store shipping capabilities and simple packaging, DOM systems enable features like BOPIS (Buy Online, Pick-Up In-Store) or fulfillment marketing.
• Easy integration. Legacy systems have a reputation for being clunky and difficult to integrate with. On the other hand, many DOM systems allow for seamless integration with popular e-commerce platforms.

Who should use distributed order management?

While distributed order management will benefit retailers of any size, if your business fulfills orders from a single channel without any added bells and whistles, it may not be the way to go. Distributed order management is typically most beneficial for omnichannel merchants with more complex fulfillment processes and multiple sales channels and/or distribution centers that need to be synchronized with real-time visibility.

Benefits of a distributed order management system

Inventory management optimization

Distributed order management systems provide real-time or near-real-time visibility into inventory. This means that e-commerce brands will be able to track their inventory at any stage of the journey - including current inventory availability and inventory order status. How? DOM systems can easily integrate with major e-commerce platforms, providing visibility into every order placed.

With these insights, omnichannel merchants have a holistic view of their product movement and order volume which can help reduce errors like stockouts and optimize their inventory operations.

Automation reduces human error and time

Still working with spreadsheets? Distributed order management systems make creating automated workflows easier. With full visibility into the fulfillment operation, retailers can set order rules for packaging or shipping, optimize picking routes, and more. For example, if a customer places an order to pick up in-store, a DOM system should be able to identify the closest warehouse to that retail location and send the order accordingly. The results? Less time spent on managing orders manually, and more time spent on delivering the best possible customer experience.

Omnichannel fulfillment options

It's clear that customers want options when it comes to ordering and receiving products. Whether they opt for buy online pick up in-store (BOPIS), ordering online from a third-party marketplace, or shipping directly from the store, distributed order management systems can handle the complexities. Because DOM systems provide a centralized view of the fulfillment operation, merchants will be able to manage orders coming in from multiple channels.

Rules-based logic for fulfillment marketing and order routing

Distributed order management systems allow retailers to create automatic, granular filters for their orders. For example, if a business has a high-value product shipping out, a rule that dictates special, cautionary packaging can be set up in a DOM system so that retailers won't need to worry about their product getting damaged while in transit. Or, if a customer passes a certain order threshold, there could be a rule that enables a marketing insert or discount code for their next purchase as a reward for their loyalty.

Ryder's proprietary technology platform gives e-commerce brands extensive customization during the fulfillment process through logic-based order rules: packing and routing. How does this work? Rules will trigger when certain parameters are present in a customer order and override the regular fulfillment workflow, directing warehouse associates to use the alternative fulfillment method.

Streamlined returns management

DOM systems help streamline the entire fulfillment process - including returns. Where traditional systems may have needed a customer to manually reach out to initiate a clunky returns process, distributed order management can easily connect with returns platforms and automate the reverse logistics process. This can look like auto-generated return labels without having to contact customer support.

Improved customer satisfaction

With advanced technology that allows insight into inventory as well as understanding the most cost-effective, quickest method of shipping - it's no wonder that distributed order management systems can boost customer satisfaction.

Think of it this way: customers who have a consistent, seamless experience (one that doesn't include products out-of-stock or shipping mishaps) will always have a more positive experience than those who don't. Not only this, but customers are also more likely to have a satisfactory experience when the merchant meets them where they are. With a distributed order management system, merchants are able to fulfill customer orders seamlessly from multiple channels.

What to look for in a distributed order management system

Native integrations

Think of a distributed order management system as the heart of your operation - it's routing inventory and orders as they come in and ship out. In order to properly assess and ensure a streamlined workflow, your DOM system will need to have connectivity capabilities so that it can easily integrate with your major platforms.

Brands may be using an e-commerce website, an order management system, a returns partner, and more - all within one operation. If your distributed order management system isn't able to bring all of your additional operating systems under one roof, it will only further silo your channels.

Customization

Distributed order management should make customization easy. How? Order fulfillment logic. For example, if a customer purchases an order over a certain threshold, with distributed order management the brand can set a rule so that the customer will receive a free sample with their purchase.

DOM systems ensure a simple and customizable option for fulfillment marketing. Whether brands want to use specific packaging for a product type or include special perks for loyalty members, DOM systems can set the rules and have them carried out automatically. They can also minimize shipping costs with rules that take fulfillment location and destination into consideration to distribute from the nearest source.

Omnichannel connectivity

A top-tier DOM system should always support multiple channels. Not only this, but it should be able to bring in data from each channel to streamline complex fulfillment operations. The right distributed order management system will be able to sync all of your selling channels and automate fulfillment processes accordingly. Making sure your DOM system can fulfill orders online, offline, and every channel in between will ensure your brand is providing a stellar omnichannel customer experience.

User-friendly

Consumers and brands alike live in a fully digital age. Just like customers expect a seamless and easy checkout or returns experience, brands should expect seamless technology to fulfill customer orders. This means that in e-commerce, there isn't a ton of room for older, hard-to-use technology.

When assessing DOM systems, ask yourself these questions:

• Can my team be trained to use this technology?
• Is the interface intuitive?
• Does my team need additional tech training?

The ideal distributed order management system will be so user-friendly that your brand operators can effortlessly set order rules and create dashboards/reports with no coding experience.

Should e-commerce brands implement distributed order management?

Distributed order management was essentially grown with online retailers in mind. With consumers bouncing online and offline while shopping through various platforms and channels, it only makes sense for e-commerce merchants to utilize this customizable, advanced technology.

This being said, it's never an easy adjustment to implement a new method of order management. But the benefits of a streamlined and automated system could be the key to retaining customers and remaining profitable.

Our tip for implementing a distributed order management system? Choose wisely. Retailers who are moving away from legacy order management should understand which DOM capabilities they'll need and ensure that their new system can deliver.