Retailers are faced with an eCommerce landscape that is highly competitive and complicated. One of the most complex aspects of setting up a successful online store, that is both scalable and profitable, is fulfillment and shipping.
A network of complex systems is required to successfully fulfill an order, and to ensure that relevant data (customer information, inventory, tracking details, delivery status, and sales records) is given to your company stakeholders and customers. According to a study by Barclays, 61.2% of retailers consider integrating retail platforms across all systems a problem. Optimizing this process requires a transportation management system (TMS) that marries the data from disparate systems into one, centralized location, thereby integrating the entire fulfillment process.
Without an intelligent transportation management system, you must manage multiple systems that don’t always connect to one another. Many retailers may only work with one or two management systems, resulting in less-than-optimal use of their systems and human resources. Retailers that try to make do without an adequate distribution platform incur delays in delivery, increase overhead costs of managing critical information, and lose market share to competitors. However, there are ways to make the fulfillment process work in your favor.
Breaking down the Fulfillment Process
To see how an integrated TMS benefits any retail business, let’s consider the separate systems typically required to fulfill and order, and examine their roles in the full distribution ecosystem.
Your store often use of one or several of the following systems:
- Order Management System (OMS)
- Inventory Management Software (IMS)
- Warehouse Management System (WMS)
- Transportation Management System (TMS)
- Enterprise Resource Planning (ERP)
- Customer Relationship Management (CRM)
Order Management System (OMS)
An Order Management System (OMS) enables eCommerce retailers to accept and process purchases made from whatever system the retailer uses for their point-of-sale interface with customers. Most OMS’s serve to simply manage order statuses by providing record of who the customer is, what they bought, and where the item is to be delivered, saving the time of manually inputting each order; however, some retailers use a more robust OMS from order inception through delivery.
Inventory Management Software (IMS)
Inventory Management Software (IMS) is used to manage product inventory both pre- and post-sale by identifying quantity in stock, by fulfillment location, and available for purchase. It also houses package weight and dimensions by product to assist with shipping.
Warehouse Management System (WMS)
A Warehouse Management System is a process and inventory control system that receives order and shipping details from another system to turn the order into a physical shipment and send it out for delivery. The WMS accepts order information from an OMS or Enterprise Resource Planning (ERP) software where the ERP also provides the functionality of an OMS. WMS’s can access both shipping labels and bills of lading (BOL) from carriers and other systems, but cannot generate labels or BOL’s through their internal system.
Transportation Management System (TMS)
A Transportation Management System (TMS) is the transportation element of supply chain management. The TMS can handle both procurement and the shipment of orders by making routing suggestions for inbound and outbound orders. TMS’s are typically incorporated into businesses that ship large volumes of freight and work directly with other management systems like an ERP, OMS, and / or IMS.
Enterprise Resource Planning (ERP)
Enterprise Resource Planning (ERP) software is typically used for comprehensive business process management, including accounting and forecasting. ERPs provide the ability to house all data in one place, thereby providing an omni-view of all elements of their business. ERPs are typically very expensive—not just in the software cost, but in customization, configuration, testing, and implementation—and designed for large businesses that receive hundreds or thousands of orders per day. While ERPs can provide integrated eCommerce implementation, the complexity and inflexibility of the average ERP doesn’t allow for an optimized user experience, especially when it comes to shipping.
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) software is used to manage a company’s relationships and interactions with all of its customers and potential customers, by individual, account, or group. CRM usually serves as a sales and marketing tool but can be applied to manage the supply chain, fulfillment, and shipping processes as well.
How exactly does shipping integrate with some or all of your retail platforms (OMS, IMS, WMS, TMS, ERP, or CRM)?
The quick and general answer is, “It depends…” as the specific software implemented and specific requirements of a retailer constitute a range of variables. While shipping can be managed by any of these systems, the common drawback is that the fulfillment process is inefficient and cannot be responsive to real-time information since the systems don’t always connect together and therefore require resource- and time-consuming management.
For retailers seeking to integrate data from disparate retail platforms into one, centralized location to streamline their fulfillment process, the ideal solution is to utilize an intelligent transportation management system that marries all these systems and processes together, thereby optimizing efficiency, increasing transparency of your shipping and delivery to your customers, and maximizing your margin per order.