Choosing the Right OMS for your Distribution Business

The pressure is on for distributors, both big and small, to meet the demands of customers, especially the behemoth-sized ones.

These customers are increasingly leaning towards streamlined, efficient, one-touch distribution networks for the economic benefits they bring. Larger distributors have been quick to respond, enhancing cost efficiencies and fortifying their supply chains to meet the growing expectations of customers, both big and small.

If your business involves selling through distributors or extended value chains, it's crucial to recognise that you've got unique order management needs. 

The nature of your business model determines the specific types of information you need to gather, the essential business processes required for effective sales execution, and how to leverage all this knowledge for accurate forecasting and demand analysis.

Which means you need the right Order Management System to handle the crucial supply chain workflows that make your business tick. You need a tailored solution that is best suited to your business and the market sector you service.

In this article, we will give you a guide to select the right OMS for your business and particular application. After all, in this interconnected business landscape, one size definitely does not fit all.

How to Pick the Perfect OMS for Your Business

So, you've taken the plunge and decided to bring an order management system (OMS) on board for your business – excellent choice! 

However, in a world flooded with various order management software systems, the trick is finding the right fit from the myriad order management software systems available. 

Choosing the right order management system is like finding the perfect puzzle piece for your business— it should fit just right and complement the bigger picture.

After all, your business has unique demands that require a tailored approach when selecting the ideal OMS.

Let's navigate through the three most important factors you should carefully consider before settling on the ideal order management system for your business:

1. Your Business Needs. 

Your business is as unique as a fingerprint, and so are its priorities. Take a moment to evaluate the specific objectives you want your order management system to achieve.

There are several OMS packages available in the market, and every system will be a perfect fit for your business or particular needs. One size certainly doesn't fit all in the realm of order management systems. 

Your business has specific objectives, and it's crucial to assess what you want your OMS to achieve. Create a comprehensive list of your must-haves for both the present and future. Who knows, you might decide to dip your toes into cross-docking down the road.

2. Price

For small e-commerce businesses, every cent saved is a victory. While being cost-effective is important, choosing an OMS solely for its affordability might lead to complications down the line. Saving money might be crucial, but it's equally important not to compromise on functionality. 

Ensure that the chosen order management system not only fits your budget but also meets all your operational needs. After all, avoiding potential headaches down the line is the goal.

3. Integrations

In a world where businesses operate across multiple platforms, integration is key. A top-tier order management system doesn't operate in isolation. 

Look for a system that seamlessly integrates with multiple platforms and application program interfaces (APIs). This capability not only supports multi-channel sales but also creates a business process that flows seamlessly from end to end.

The Essential OMS Features that All Distributors Need

As a distributor, your business has specific needs that might not be shared with most of the other OMS-using businesses out there. 

Let's dive into the must-have features that make an OMS an effective tool in the distributor environment—features that your company will not be able to function without and will be crucial to your success. 

1. Multi-Customer Tracking

When it comes to the intricate dance of order processing, nothing beats the importance of tracking multiple customers seamlessly. Because as a distributor, you don't have the luxury to work with a single client. 

You will have to juggle the needs of multiple players at any one moment during the course of a normal business day. 

The end buyer may differ from the sell-to customer, and both of them might be distinct from the ship-to company and location. Tracking all these different facets of your customer base is not just crucial; it's a game-changer.

This feature is not just another checkbox on the list; it's a pivotal requirement that influences the entire business process. Because this feature (or lack thereof) will have a profound impact on your entire business process. 

From shaping the required order and pricing management to steering the ship of forecasting and demand analysis, the information about different customers is the heartbeat of efficiency.

What makes this feature particularly noteworthy is its adaptability. It recognises that every organisation is a unique entity, especially when dealing with vendors that sell through distributors or extended value chains.

Which means it's essential that any OMS used in a distributor company must boast the capability to effortlessly juggle multiple customers.

2. Navigating Complex Shipping Terms

In the dynamic landscape of the technology industry, norms shift, and here's where a crucial requirement surfaces: the ability to seamlessly integrate and adapt to the shipping intricacies of your customers.

It's not uncommon to utilise the shipping accounts of your customers and adhere to their specific shipping terms, rather than relying on your own.

Unlike traditional setups, where a company might rely solely on its own shipping accounts, the technology sector often plays by a different set of rules. Companies selling through distributors frequently tap into the shipping accounts of their customers, adhering to the unique shipping terms and conditions set by each one.

These shipping intricacies aren't just about getting a package from point A to point B. They involve a delicate balance of customer-specific requirements, influenced by factors such as the ship-from or ship-to locations, shipment weight, and the involvement of re-shippers.

These shipping requirements aren't just a backroom discussion; they need to be seamlessly communicated through the entire order process, from the moment the order is placed to the shipping dock. 

What makes this feature stand out is its recognition of the diversity within the shipping landscape.

 It understands that the shipping dock may not always be in-house—it could be an outsourced fulfilment centre in a bustling inventory hub or even a strategic supplier providing logistics services.

Yet, the challenge lies in effective communication and electronic data transfer. How do you ensure that the requirements for shipping are seamlessly communicated through the entire order process, reaching from the initial order to the profile of the customer and all the way to the bustling activity of the shipping dock?

The right OMS will be able to handle these details for your company in an efficient and straightforward manner.

By efficiently collecting and capturing the often complex shipping terms within extended value chains, it ensures that every package, regardless of its journey, arrives with precision and meets the unique needs of each customer.

3. Flexible Pricing Models

Pricing is not a one-size-fits-all game, especially in the complex distribution game. Which means you need an OMS that can handle flexible pricing models that seamlessly adapt to the nuanced landscape of customer relationships.

Distributors often have to deal with a scenario where they have to deal with different customers, distributors, or Original Equipment Manufacturers (OEMs), each wielding multiple price points for the same product.

Perhaps a customer negotiates specific terms for end buyers, earning them a well-deserved discount. Alternatively, they might anticipate a rebate based on future sales, adding a layer of complexity to the pricing structure.

The OMS software then has to work out discounts based on negotiated terms for end buyers and rebates tied to future sales for each one of those customers. 

This complexity is where the demand for diverse pricing models and terms emerges. Your Order Management System needs to effortlessly accommodate scenarios where the same ship-to customer, purchasing the same product, is subject to different pricing models based on the identity of the end buyer.

Plus the system should be able to perform multiple similar calculations on a regular basis without error.

A robust OMS steps up to the plate by providing the flexibility to accommodate these diverse pricing structures. The software must be able to accommodate a pricing landscape as diverse as the customers themselves, and a one-size-fits-all approach simply won't cut it.

4. Booking/Billing/Backlog Metrics

Another important consideration is how well an OMS handles performance metrics and management procedures. 

The heartbeat of client satisfaction lies in commitment. Committing to scheduled dates and delivering on those commitments is a vital aspect of maintaining trust. Your OMS should not only facilitate this but excel at it, ensuring that planned schedules align with actual execution.

In a world where time is of the essence, manually maintaining these critical metrics can be a drain on resources. Here's where automation steps in as a hero. 

Which means that any OMS used in a distributor business needs to be able to track and optimise every booking, billing, and backlog metric with precision. 

Whether it's detecting billing backlogs or capturing fundamental variables for change, your Order Management System needs to keep track of these metrics and notify the right decision makers when action steps need to be taken to keep projects on track. 

The OMS should be extremely proficient at handling all booking, billing, and backlog metrics. The software should not only ensure efficiency in execution but also provide a robust system for tracking and evaluating the performance of meeting scheduled responsibilities for customers.

This is especially true in the technology industry, where the efficiency process often extends far beyond the direct purview of internal operations teams.

The commitment to external suppliers is monumental, and meeting scheduled delivery dates is a non-negotiable responsibility. 

The commitment to maintaining external supplier relationships often rests squarely on the shoulders of a company's technology teams. Meeting scheduled dates and honouring commitments as per the meticulously crafted planning becomes paramount.

But here's the challenge: manually tracking and maintaining these details can be a formidable drain on valuable time. This is where the magic of automation comes into play.

An efficient OMS ensures historical delivery records are not just recorded but analysed, providing valuable insights for continuous improvement. The software should keep track of all team commitments, both to internal and external parties, and ensure that these commitments are kept on track up until final delivery. 

5. After-sale Inventory Tracking

The final OMS feature that is crucial to all distributors is  after-sale inventory tracking. Here's why this feature is pivotal and how it plays a crucial role in efficient order management.

A distributor needs an OMS  that doesn't just track inventory until it leaves the warehouse but follows its journey afterward. This is because a sale doesn't actually end when the transaction is complete—it extends into the intricate landscape of inventory management post-sale. 

This involves a meticulous tracking process, following the trajectory of stock to hubs, Vendor-Managed Inventory (VMI) storage facilities, or distribution channels.

But that's just the beginning. For a comprehensive view of post-sale inventory, integration with Point of Sale (POS) information is indispensable. It serves as a critical tool for showcasing the status of the inventory, shedding light on stock utilisation, especially in scenarios where a Just-in-Time (JIT) system is rapidly depleting stock. The complexities deepen with considerations like stock rotation, rights to replacement, cost price guarantees, and the availability of discounts.

The complexities don't end there. From stock rotation to the right to replace, cost price guarantees, and discount availability, a robust OMS ensures that every nuance is accounted for. It's not just about tracking; it's about strategic inventory management that aligns with your business goals.

Regardless of the specific scenario, post-sale inventory tracking serves as a vital demand indicator. By certifying the ultimate end clients who consume the inventory, your OMS becomes a valuable tool for both pricing strategies and demand evaluation. It's about understanding the market and adapting your inventory management accordingly.

And let's not forget the fine print. Because the journey of the sale doesn't end until you understand possible liabilities associated with returns or rebates. Your OMS should be adept at providing a feedback loop, offering insights into the effectiveness of your processes and any necessary adjustments.

Understanding potential liabilities associated with returns or rebates is a pivotal aspect of this post-sale inventory tracking process. 

When it comes to distributor order management, where every link in the supply chain matters, after-sale inventory tracking isn't just a feature; it's a strategic imperative.

An advanced OMS in this industry should not just manage orders; it should keep track of all inventory-related activities,  ensuring effective inventory management from sale to stock and beyond.

Conclusion

In the world of distribution, success hinges on the seamless orchestration of operations, where precision is paramount and every transaction echoes in the bottom line.

At the heart of this orchestration lies the indispensable Order Management System (OMS).

As we navigate the essential features that is needed from an OMS in the distributor field, the key takeaway is crystal clear: to run a profitable distribution business, embracing the best OMS is not an option; it's a necessity.

Choosing the right OMS for your company is akin to selecting the right partner for a dance. It's about finding a solution that not only meets your immediate needs but also anticipates the twists and turns of the evolving business landscape. Look for a solution that not only meets your current needs but evolves with the trajectory of your business.

When embarking on this quest for efficiency, time savings, and cost-effectiveness, there are a few guiding principles to keep in mind.

• Look for Customisability: Your business is unique, and your OMS should reflect that. Seek a solution with customisable features and options that can be tailored to the specific nuances of your operations.
• Ample Reporting Choices: In the dynamic world of distribution, information is power. A robust OMS should offer a plethora of reporting choices, providing insights that illuminate the path to informed decision-making.
• Logical Frameworks for Order Management and EDI Communications: The right OMS should provide logical frameworks for order management and Electronic Data Interchange (EDI) communications that fits into your current technology line-up. 
• Review Multiple Solutions: The quest for the perfect OMS is not a one-stop shop. Take the time to review multiple solutions, comparing their features, strengths, and compatibility with your unique business requirements. This investment in research will pay dividends in the efficiency and success of your operations.

The terrain is vast, and the stakes are high, but with a keen eye for customisation, reporting prowess, and logical integration, you're not just selecting a system; you're shaping the future of your business.

So, as you navigate this critical juncture, remember: the right OMS isn't just a solution; it's the catalyst for an era of efficiency, profitability, and triumph in your distribution endeavours.

Choose an OMS that not only meets these challenges but transforms them into opportunities for growth and success.