A relatively small number of software vendors offer distributed order management (DOM) solutions; IBM, Manhattan Associates (a Logistics Viewpoints sponsor), and Oracle are the best known of these vendors.
What is DOM? It is a central order orchestration hub for companies with complex fulfillment networks. A DOM provides…
- a common view of inventory for companies with diverse order management or enterprise resource planning (ERP) systems;
- the ability to designate how an order should be fulfilled even for orders with complex flow paths and lifecycles;
- event management functionality that provides visibility into whether orders are being, or will be, successfully fulfilled;
- a cockpit to resolve issues for orders that have run into problems.
For companies that have ERP solutions with order management capabilities, how does distributed order management differ from traditional order management? The answer is that for many companies, their existing ERP solution can’t properly support the growing complexity associated with their fulfillment processes.
Consider the following potential flow paths for a PC order that a manufacturer of advanced consumer electronics needs fulfill. The order can be placed in a variety of sales channels. The “product” is a mix of components and services supplied by both the company and key trading partners. Delivery of the product can occur at the store, at home, or some mix of the two.
In short, order lifecycles are becoming more complex. In retail, the changes are more obvious. Retailers seek to play in an omni-channel environment where customers seek to “buy anywhere, fulfill anywhere, and return anywhere.” But even manufacturers are finding that increased outsourcing, expanding service offerings, and ecommerce are making orchestrating orders more difficult. For these manufacturers, managing this more complex order fulfillment process effectively and profitably is too difficult for their existing IT infrastructure.
Finally, sometimes the need for a DOM solution is dictated by a company’s heterogeneous IT environment – that is, a company that has multiple ERP and supply chain solutions. This heterogeneity prevents companies from presenting “one face to the customer.” It is not uncommon, for example, for customers buying from large companies to experience a cumbersome ordering process where they have to place several different orders to different company divisions. One solution to this problem is to implement one global instance of an ERP. But implementing a new global ERP can be difficult to cost justify, difficult to scale, and highly disruptive to the existing business.
Stock keeping unit proliferation, increasing numbers of channels to the customer, the continued growth of ecommerce fulfillment, increased use of outsource partners – all of these trends are making order fulfillment even more complex. Distributed order management solutions are critical applications that help companies efficiently and effectively deal with this complexity. For many companies, distributed order management has become a strategic application, but far too few executives even understand what this solution is about.