Distributed Order Management Software offers supply chain execution excellence in the omni-channel world environment

As omni-channel retailing grows in popularity, supply chain execution managers are beginning to take more and more interest in Distributed Order Management, or DOM for short.

DOM is something that has been around for a number of years. It first materialized in the late 1990s but didn’t really take-off in a big way. However, in recent years, with the escalation of omni-channel retailing, DOM is becoming increasingly popular as a way of helping business to manage and prioritize the options for maximizing order fulfillment.

Automating the multiple sourcing decision making process

Used correctly, DOM is a way of automating the logic of multiple sourcing with a view to satisfying a customer’s needs and requirements, while at the same time, optimizing the degree of profitability for each and every transaction.

The retail sector is turning to DOM in droves, using it to sit on top of existing order management systems (including ERP software) and to bring in a new system of prioritizing order processing; something that typically needs doing especially when business have gone through long periods of mergers and acquisitions whereby conflicting priorities have been allowed to co-exist side by side, negatively impacting on efficient supply chain execution.

DOM is not well understood by many supply chain professionals

Although Distributed Order Management is becoming more and more popular in supply chain execution circles, there are still a high number of supply chain professionals who don’t understand it very well, so here in this short article, we here at Supply Chain Station will reveal a little more about it workings and how best to deploy it for maximum efficiency.

DOM is a specific breed of software that allows users to make a combination of sophisticated decisions about processing customer orders. Some of the criteria that DOM can deal with include things like: multiple sourcing options, multiples location preferences, selecting price range options, choosing from various delivery availability options, etc.

DOM works well in both retail and B2B environments

But it’s not just in the retail sector that DOM has its uses, it is also now being taken up in the B2B sector too. Businesses can us DOM to select which sources it will use to obtain products from in a way that ensures no one particular location will run out of stock on a particular line item. It can also weigh up factors such as what the respective shipping costs will be for all of the various options it has at its command, and select the ones that offer the lowest cost in order to protect profits, whilst also ensuing that the client receives the product when and where it’s expected. It promotes supply chain execution excellence from everybody’s perspective; the manufacturer, the retailer and the client as well.

DOM requires complete visibility throughout the supply chain

In order to be truly effective, DOM software has to have complete visibility throughout the supply chain, including across things like capacity, costs, inventory levels, sourcing options and rules etc. Through the DOM’s control panel, supply chain personnel can build a matrix of priorities that the program uses to evaluate each and every order; apply the various priorities, and come up with the optimum sourcing solution for each individual order. The priorities can be changed to reflect current circumstances in markets and industries around the world, and can be specifically crafted on a client by client basis to reflect the individual customer’s or end user’s preferences.

An example of DOM in action

To illustrate the sort of thing that DOM can do, let’s examine a simple scenario involving a national US company that has outlets right the way across the US from East to West coast. The ideal location to ship from is on the east side as this represents the lowest costs. But as time marches on throughout the day, the further west the chosen dispatch location; the later in the day that shipment can be made. So rather than having to impose a deadline of say noon, in order to facilitate same day dispatch; by moving the dispatch point further west, the deadline can be pushed further back.

Assuming that the business in question is prepared to sacrifice an increase in shipping costs to maintain its same day dispatch promise to more clients, setting the DOM parameters to this type of priority would be the desired solution.

The perfect solution for “order hub “scenarios

DOMs can be used to manage and prioritize orders in a “order hub” situation.  This is particularly useful where there are a number of potential sources for a particular product, say within a conglomerate that has been built up through various mergers and acquisitions. If the organization wants to present one united face to the client, DOM can be set and used to make the appropriate decisions.

Another helpful aspect about a Distributed Order Management system is that it can oversee other supply chain programs. This is particularly useful where a number of individual facilities of a large national corporation, each operate their own bespoke supply chain execution programs. DOM can simply be installed on top of the existing programs to make the final decisions according to current priorities.

Manufacturers moving towards DOM solutions

Outside of the retail industry DOMs are also coming into their own in the B2B sector, whereby manufacturers want to be able to simplify the decision making process. They want a solution that means they don’t have to continually flit backwards and forwards from terminal to terminal, taking valuable time and therefore money in order to try and figure out the optimum decisions for client orders from various ERP programs based on individual customer’s requirements.

A DOM system is the ideal solution and can be used to oversee existing ERPs systems, creating total visibility across supply chains and making automated decisions, thereby providing great supply chain execution without having to go to the expense of reinventing the wheel.

Custom made for supply chain excellence in the omni-channel world

With the proliferation of omni-channel retailing, DOM presents the perfect way making the right decisions at the right time, and providing supply chain execution excellence which will not only help to keep the customer satisfied, it will also help to maintain efficiency, profitability and improve the bottom line.

If you work in an organization that operates on an omni-channel marketing basis, have you yet considered installing a Distributed Order Management software system? Having read this article will you now be prepared to persuade your company to go down this route? If not; why not?

A brief resume of your thoughts and any concerns you may have would be appreciated and could be shared with your peers.

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