Considering an OMS? Start with Due Diligence
To meet changing customer demands, maximize inventory efficiencies and drive shopper loyalty, apparel brands and retailers want the ability to broker transactions to and from every channel in a unified way. With the expansion of channels beyond the brick-and-mortar store, the complexity of order management has grown, and it’s increasingly difficult for an organization to efficiently fulfill and ship orders without the proper technology in place to support it.
If you’ve recognized that your IT infrastructure might need new life breathed into it, I would caution you to not launch immediately into a vendor search. Improvement might be gained through operational changes to optimize an existing order management system (OMS). Or a simple technology upgrade in your legacy platform may improve OMS capabilities. Alternatively, you may have the task of bringing on an entirely new solution from an OMS partner. However, none of that should happen before taking the time to assess your current state and align internally.
Finding a solution hinges on knowing the issues
Start by outlining exactly what your needs are, what challenges you face, what logistical issues you’re running into repeatedly, or what inefficiencies you’ve detected in your process. These may include things such as order errors, managing returns, or not having full inventory visibility.
As an apparel retailer, inventory accuracy may be a major hurdle. This is especially true of soft goods retailers. Depending on your production cycle, new shipments arrive weekly, or even daily, and are rarely in easy-to-count rectangular boxes. Rather, apparel arrives in mixed shipments, some pre-packed for delivery directly to stores and others bulk packed for storage in the DC. Varying degrees of vendor compliance, combined with shrink, can make inventory accuracy a challenge, especially in lower volume SKUs.
To make it even more complicated, the immense number of SKUs you manage isn’t just moving one way, from the distribution center to the store, anymore — product is moving in many different directions, with online orders fulfilled from both DCs and brick-and-mortar locations, in-store purchases being fulfilled from the DC or other stores, online purchases being returned in-store, and so on. Understanding your inventory planning and allocation capabilities, as well as the accuracy of your inventory at the store/SKU level, is critical to an effective and successful OMS strategy.
Additionally, think of your business’ framework. How many channels do you have? Are you primarily a direct-to-consumer format, or primarily brick-and-mortar? Do suppliers add to the complexities you face (i.e. dropship)? Knowing specifically how your unique set of challenges impact customers and your business is the first step in improving your order management.
Any good journey starts with a roadmap
An honest assessment of your company’s “current state” roadblocks may cause discomfort; use that as motivation to visualize your ideal “future state.” Implementing order management capabilities can be fairly disruptive within an organization, which is why the process of creating a business process and technology roadmap is essential for a smooth implementation, whatever route you take. Deliberately defining where you want to be and how you’ll get there lays out the technology, processes, IT projects, people, and budget necessary to get there.
Determine your next step
You’re self-aware, you have a plan, and now it’s time to act on improving your order management capabilities. By this point, you’ve aligned internally — “we’re either going to stay the course and make adjustments, or we’ll evaluate new solutions to help us get to where we’ve set our sights.”
So, how do you go about selecting the right OMS? First and foremost, remember what challenges you’re trying to overcome as you assess various tools. If you have issues with inventory accuracy, for example, how does a proposed solution help you mitigate that? Are you comfortable that the tool you’re buying will help you build in a layer against inaccuracies? If you go through a deliberate search to match solutions to your unique set of problems, the right functional and technical solutions will be apparent. Check references, engage in an RFI or RFP process, prioritize an OMS that offers flexibility, and above all else, trust your people instincts.
As I consult retailers on the right projects for their organizations, the best piece of advice I can offer for vetting new technology is this: find a responsive and collaborative partner, not just a vendor. Do they understand and are they committed to helping deliver on your roadmap? Or are they focused solely on implementing the technology? The best OMS solution for you will likely be from a partner whom you can build a great relationship with, not simply the one with the “best” technology.
Dave Brumback is a partner at Columbus Consulting.