Order management is the backbone of a well-run retail business. It’s what ensures the right products are available in-store at the right time so that the consumer doesn’t receive the dreaded ‘out of stock’ email after placing an online order.
Nevertheless, we have all experienced a time when we attempted to grab an item from its usual spot on the shelf, only to find it empty. This is the result of poor order management, usually due to lack of data within the supply chain. Given how common this experience is, it’s not surprising when you learn that 91 per cent of retailers are not getting the data they need from suppliers to run their businesses efficiently.
Many retailers are left in the dark after they place an order with a supplier. They may not know how much stock to expect until the supplier’s shipment arrives at the warehouse. Even worse, they may not know if the order has been packed and labelled properly, so that items can be delivered to the right location efficiently.
“If you don’t know what’s coming in, how much is coming, or what’s on a pallet and where it’s supposed to go, that creates bottlenecks, excess inventory and logistics problems,” said Marco Castelán, APAC Sales Director at SPS.
Wrangling order information isn’t productive
To solve this problem, retailers have traditionally employed large teams of people to chase suppliers for critical information. But this approach is costly, time-consuming and leaves a lot of room for improvement.
“We’ve seen retailers solve their data problems by hiring more staff. They have more assistant buyers and merchandisers at the analyst level, because they’re constantly having to follow up on orders or shipment information, as opposed to automatically receiving the information they need from their supplier community,” said Gizelle D’Silva, APAC sales operations manager at SPS.
Instead, the key to order management isn’t more staff, it’s being proactive rather than reactive – and that starts with data.
Proactive decision making is possible
Suppliers need to be able to easily upload all the necessary information about an order to a centralised system, so retailers can access it and prepare their business accordingly. When this is done, retailers can be proactive and confident in their decisions.
This approach often leads to cost savings for retailers due to the fact that they no longer need to employ large teams of people to chase suppliers for critical information. They’re also less likely to end up with too much or too little inventory because they have visibility of the supplier’s side of the order process..
If retailers know in advance that a supplier can only ship part of an order within a certain timeframe, buyers can adjust their promotions and marketing to ensure they don’t end up disappointing customers when they sell out.
“We know that so much information needs to be at the fingertips of marketers, customer service reps, buyers and everyone within an organisation to deliver a positive customer experience,” said Castelán.
“Retailers are very good at managing the data they create within their four walls, but the challenge is connecting and collaborating with trading partners outside of their business, namely suppliers,” Castelán said.
That’s where SPS comes in. With over 90,000 retailers, suppliers, manufacturers and 3PLs on its global retail network, they connect trading partners to provide full visibility across the entire supply chain. That data problem simply goes away.
Supplier collaboration is the answer
The need for proactive order management is greater than ever, with Covid disrupting retail supply chains and driving a rapid increase in online shopping.
“Retailers need to be super agile when it comes to meeting consumer demand and knowing when and how orders are being fulfilled,” D’Silva said.
In the past, some suppliers blamed a lack of technology for their inability to adopt different order management systems, but D’Silva said that’s no longer an issue.
“As long as they have access to the internet, suppliers are able to meet the trading requirements for any retailer and any shipment model,” she said.
With 20 years’ experience in this space, SPS has developed a proven methodology for onboarding suppliers so order management processes can be automated and provide retailers the information they need. This leaves retailers free to focus on other aspects of their business, not chasing orders.
According to Castelán, now is the time for retailers to establish new order management processes with suppliers. Ones that provide the needed data to create the desired customer experience.
“Have a process, stick to it, and do not allow exemptions or one-offs,” he said.
“That takes a lot of education with your buying team and a certain level of transparency and openness with your suppliers. But by sharing information and being a good partner to your suppliers, they’re going to be successful and ultimately, you’re going to be successful.”
Learn more about how to achieve a seamless order management process here.