The Power of Distributed Order Management Systems for Omnichannel Retail
Omnichannel retail has completely transformed how consumers shop and engage with brands. Offering seamless experiences across channels is now table stakes. But this also imposes immense complexity for retailers to manage orders, inventory and logistics across a diverse fulfilment ecosystem. This is where a distributed order management system (DOMS) becomes relevant.
According to Grand View Research, the global distributed order management software market is poised for robust growth in the coming years. The report forecasts that revenues in this market will reach $3.8 billion by 2023, reflecting a compound annual growth rate of 9.1% over the forecast period. This rapid growth highlights the increasing strategic importance of distributed order management technology to enable omnichannel fulfillment capabilities in a complex retail landscape.
What is Distributed Order Management?
Distributed order management refers to the software systems that determine how and where customer orders get fulfilled from across various fulfilment points, whether stores, warehouses, suppliers or 3PLs. It acts as the “middle office” by intelligently routing orders based on business rules like:
- Inventory availability and location
- Proximity of fulfilment point to customer
- Order profitability per location
- Delivery timelines
- Capacity, workload balancing
By taking a holistic view of enterprise-wide fulfilment capabilities, DOMS enables retailers to meet customer expectations, optimize operational costs, and provide differentiated channel experiences.
Key Features of Distributed Order Management Systems
Here are some of the core capabilities offered by robust DOM systems:
- Global inventory visibility across the fulfilment network
- Dynamic order orchestration and routing based on rules
- Real-time, low-latency order promising
- Carrier connectivity for shipping status
- Seamless integration to order capture systems
- Flexible workflow and automation configuration
- Analytics on fulfilment performance and profitability
With these capabilities, DOMS serves as the “control tower” coordinating seamless omnichannel order fulfilment.
The Advantages of Distributed Order Management
Implementing distributed order management provides retailers with several advantages, including:
- Lower Logistics Costs — Optimal order routing minimizes shipping distance costs.
- Higher Order Profitability — Fulfilling from the most cost-efficient node boosts the margin per order.
- Inventory Optimization — Reduced safety stock needs with network-wide visibility.
- Faster Delivery Times — Fulfilment from local inventory enables same-day or instant delivery.
- Consistent Experiences — Orders captured anywhere can be fulfilled from optimal points.
- Reduced Backorders — Orders are routed based on real-time inventory across the network.
As consumer expectations escalate, retailers need enterprise-class fulfilment capabilities. Distributed order management serves as the critical middleware synchronizing channels, inventory and logistics — providing the foundation for execution.
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FAQs
Q: What are the key capabilities of a distributed order management (DOM) system?
A: Core capabilities include intelligent order orchestration, global inventory visibility, real-time order promise, rules-based order routing, omnichannel order capture, fulfilment optimization, and scalability.
Q: How does a distributed order management system differ from traditional Order Management Systems (OMS)?
A: Distributed Order Management (DOM) software manages orders across multiple fulfilment points, warehouses and channels, unlike centralized OMS. It enables omnichannel fulfilment.
Q: What benefits does implementing a DOM provide?
A: Key benefits are lower logistics costs, higher order profitability, reduced backorders, better inventory optimization, faster delivery times, and consistent cross-channel experiences.
Q: How complex is it to integrate DOM with surrounding systems?
A: DOM requires tight integration to OMS, WMS, stores, POS and other systems. API-based integration is typically used for connecting DOM.
Q: What order volumes and throughput does DOM support?
A: Enterprise-grade DOM solutions are highly scalable — supporting peak order volumes of 100,000+ per day and sub-second order routing.
Q: Can DOM be implemented in phases for large retailers?
A: Yes, phased rollout by region or brand is recommended. Core DOM gets implemented first and then enhanced gradually.
Q: Does DOM also support B2B order orchestration?
A: Yes, leading DOM systems provide B2B capabilities like multiple shipment routing, customized business rules, approvals, etc.
Q: How can DOM improve ecommerce order fulfilment?
A: DOM enables fulfilling online orders from optimal inventory locations to shorten delivery times and reduce logistics costs.
Q: What analytics capabilities should a DOM system provide?
A: Analytics on fulfilment KPIs, performance by location, order profitability, real-time monitoring, and self-service reporting.
