What is Order Management? Why is it so important?

Organization and attention are essential points for the management of any type of commerce, whether physical store or e-commerce, do you agree? However, when order management is not going well, the risk of errors that impair the efficiency of important processes and cause customer dissatisfaction increases.

This is because this activity is fundamental for the good performance of the entire order cycle. Any failure in this process can create headaches for the company and damage its relationship with its customers.

To illustrate, at Christmas 2019, the Reclame Aqui website recorded a 22.8% increase in complaints compared to the previous year, totaling 2,350 complaints. Of these, 62.25% refer to the delay in delivering the order. This is just one of the problems that can occur due to inefficient order processing.

So that you do not take this risk, we have prepared this article, in which we will explain what order management is, how it works and why it is so important for your company.

Order management meaning

What is order management?

Order management comprises the entire process that takes place between the consumer making a purchase, until the moment he receives his order. It may seem simple, but for everything to go according to plan, ensuring customer satisfaction , there are a number of steps that need to be followed.

Once the order is placed, the system must be checked out, updating the inventory. At the same time, the product needs to be separated, packaged, checked, released and shipped. But it’s not over yet. The order must reach the consumer in good condition and within the period informed at the time of purchase.

When it comes to a company that works with products to order, it is also necessary to consider the production time, as well as the levels of the inputs necessary for its manufacture.

Why is efficient order management so important?

Order management is a fundamental activity for any type of trade. When properly implemented, it is able to optimize the sector’s processes , reducing lead time , maintaining order and eliminating errors, such as advertising products that are not available in stock, for example.

Therefore, an efficient order management must be accurate and automatic , in order to avoid mistakes that could compromise the company’s performance and damage the relationship with customers. Check out a practical example:

Imagine that a consumer accesses your store’s website in search of a product. When you find what you are looking for, add it to your cart and proceed to the payment step, only then discover that the product is unavailable. In such situations, frustration is inevitable. In addition to losing the sale, you can also lose the customer.

When order processing is inefficient, one of the most noticeable impacts is precisely on the level of consumer satisfaction. Delays in delivery, defective or poorly packaged products are some of the reasons that can generate this dissatisfaction.

Therefore, monitoring the indicators in the area is essential to identify problems, as well as opportunities for improvement .

How does order management work?

Order management must follow the entire order lifecycle within the company. In general, this activity is carried out with the help of software , which must be integrated into the system used by the company, so that they have access to all information regarding the processing of orders.

Although they seem disconnected, activities such as inventory management , shipping and transportation management are areas of great importance for order management.

For example: for order management to be agile and efficient, the system used needs to have access to the store’s inventory, in order to avoid discrepancies between what is offered and what is in stock.

Likewise, the way products are packaged and organized inside vehicles can prevent damage during transport. In addition, efficient delivery routing is essential to reduce operating costs and ensure that delivery takes place within the agreed timeframe.

7 advantages of efficient order processing

In addition to considerably reducing the risk of errors, when properly executed, order management can generate several benefits for the company, check out some of them:

• increased efficiency in all processes involved in the order cycle;

• greater reliability of the data available in the system;

• increased productivity of the entire team involved in the process;

• reduction of lead time , which is the total time between order placement and delivery;

• improving the quality of service and customer service;

• increase in customer satisfaction rates and, consequently, reduction in complaints;

• improvement of the company’s image in the market, which is a great competitive advantage.

What’s up? Is it clear what order management is and how important it is to your business?

As you can see, order management is a vital activity for any type of business. In addition to a series of advantages, it also helps to avoid headaches, ensuring the good relationship between your company and your customers.

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