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The Internet in E-commerce: Inventory planning and order management Inventory and order management

-- Anjana Srikanth

This article explains what order tracking and inventory management can do for any business that indulges in e-commerce. We've assumed that you've made the decisions about how many plants and warehouses you own, whether you need to stock inventory and if so, at how many locations and what distribution channels.

Most of the time the job of forecasting demand and replenishing inventory to suit the demand is not accomplished in a manner that is useful. We'll tell you how to collaborate over the Internet on order management, inventory management, and demand forecasting, production scheduling and transportation. We'll describe how through collaborative planning on the Internet, consumer behavior can be communicated throughout the organization.

Scenarios: What happens when a customer contacts you and asks for a product that he wants immediately and you discover that your warehouse doesn't stock it at that moment? And if this happens after the item has been logged in as a confirmed order? Are you able to respond in a timeframe that's suitable to your customer?

What happens if the customer contacts you through telesales, or through online sales on the web? Is your staff able to respond accurately to the customer's query? In the process are you really making money in these deals? What do you need to ensure that you are not in a situation where you are in the dark about orders and inventories, and maybe even customers?

We know that customer orders drive a supply chain. A primary requisite for any e-commerce business is that it employs systems that manage orders and inventory levels efficiently.

When customers demand service through multiple channels, order promising, tracking and fulfillment become more complex and intensive. Multiple channels could mean customers calling in through the web; phone, fax or email and usually different people attend to these calls in an organization.

Disparate order processing can lead to serious gaps in demand and fulfillment. If order commitments are not honored throughout the enterprise a consolidated order status at any point of time can be difficult to view and this difficulty may in turn to be communicated to the customer.

Consolidating orders into a single interface for submission, tracking, routing, fulfillment, and order status queries, can help all employees access vital information from a common interface thus ensuring visibility in the entire process. And if this visibility is in turn communicated to the customer, it means that the customer has a complete picture of the status of his order until the final delivery. Customer order history implies viewing and managing pending orders by status, accessing order numbers by invoice numbers, tracking number or customer.

Order management services:

Order management services are a critical component of customer service - enabling internal communications within an organization and facilitating collaboration among trading partners to ensure that all customer orders are fulfilled and delivered when promised.

Profitable order management features can afford the following:

  • Consolidated order management that lowers costs in turn.
  • Advanced order commitment and tracking that can in turn help improve customer service.
  • Allocation of inventory and products in a profitable manner.
  • Automation of workflows through order management processes· Order visibility (order tracking)·
  • Optimized price lists and customer quotes to maximize margins ·
  • Consolidation of order data to support enterprise forecasting and replenishment initiatives·
  • Significant increase in the visibility of demand and future requirements·
  • Elimination of repetitive tasks and physical paper handling ·
  • Addition of the value of availability to a product·
  • Reduced lead times, reduced administrative workloads and the use of multi databases·
  • Optimization of catalog price lists for profitability.

Inventory management:

One of the largest costs to any business is that of inventory or stock at hand. Whether a manufacturer, retailer or distributor, the amount of inventory held directly impacts your bottom line in more number of ways than you can imagine. Having too much cash tied up by not stocking up on items that customers need, can have a major impact on your business.

A product that is in excessive demand is usually extremely difficult to manage. Supplying the right amount of products implies that an accurate demand forecast is essential. This impacts the entire supply chain. A similar situation exists at the warehouse level and even the manufacturer end.

Continuous replenishment in a warehouse can become a mammoth task if consumer response is not studied accurately. To facilitate efficient consumer response based on consumer demands, warehouse data, sales forecasts, and inventory planning, it becomes imperative that such companies consider inventory management seriously. Making accurate demand and supply predictions is an ideal situation that anyone in the supply chain management arena could dream off.

Inventory management can remove barriers between manufacturer and retailers and establish a closer relationship between them. Ideally inventory management should be easy as the main aim is to reduce inventories. If items wanted are not at hand or even if merchandize wanted is reordered often, sales will be lost to competitors. Precise control of inventory is an essential ingredient for a successful company.

The 3 main aims in inventory management are:

  1. Improved customer service
  2. Reduced inventory investment
  3. Increased productivity

Benefits of inventory management:

  • Complete control of inventory.
  • Complete information about the value of the inventory·
  • Complete visibility on Quantities on hand, Quantities committed and Quantities sold·
  • Response time to demand changes reduced·
  • Increased sales
  • Knowledge of the exact size of merchandizing inventory·
  • Frequent analysis of purchases, sales and inventory records.
  • Removal of unnecessary use of warehouse space used by unneeded part of inventory.
  • Reduction in excess merchandize stock.
  • Taxes and insurance premiums paid on excess merchandize inventory avoided.

By providing timely accurate information pertaining to inventory location, movement and valuation, receipt of goods, sale and return of goods and profits you can make sure that your inventory is visible throughout a network.

With inventory management you can set your product catalog to hide products that are not in stock, or change prices based on the amount of products available in the warehouse. The quantity available can be displayed to the shopper and this can prevent unnecessary confusion when the shopper adds items not available to a shopping cart. The store buyer can be automatically notified about low inventory levels.

IT is a key enabler in the transformation of purchasing into a strategic business function. The challenge is to find a way to put these technologies to use and create value and competitive advantage.

Contact us for innovative ideas and solutions in creating and building online stores with advanced features like Order management and Inventory management. Check out our e-store packages.

Link to the Viking case study in the site
Link to the article on webenabling the distribution network in the site
Link to supply chain article in the site
Link to CRM article in the site

 


 
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