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Jaap de Jonge
Editor, Netherlands
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Order Management in Value Chain (Porter) We can consider Order Management (OM) to be the process of order capturing, tracking, and fulfilling customer orders. It begins when an order is placed and ends when the customer receives their package. It may even include returns. It's a sort of umbrella term that is comprised of multiple value chain activities including managing orders, customer records, fulfillment, inventory visibility, payments and invoicing, and customer care.
When scaling a business, it's important to automate and streamline the OM process — otherwise, you might eventually be overwhelmed by too many orders coming in and/or too many logistical/fulfillment issues.
An OM system gives you a single view to manage all customer orders in one place. They may offer bi-directional sync that makes sure order information is passed between your OM system and sales/ecommerce platform while providing visibility into all logistical, financial and informational processes.
Typical main stages (statuses) in an order management cycle are:
- Order is placed
- Order is received (in warehouse/fulfillment center)
- Order is picked
- Order is packaged
- Order is shipped
- Item is delivered/received
- Item is returned
- Returned item is received
Order management is unthinkable without a comprehensive, integrated IT system or even a network of systems. That's why it wasn't included yet at the time Porter developed the value chain model (1985). These kind of systems didn't exist yet.
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