May 09, 2019
Identifying the elements of order routing in a Distributed Order Management (DOM) system
By: Jason Acimovic

How to route omnichannel customer orders to reduce costs, increase revenue and maximize customer satisfaction.

Cindy has been recently appointed the chief operating officer (COO) at Thriftstore Inc. She is overseeing the development of order routing logic for their newly implemented distributed order management (DOM) system. She has been asked to use intelligent order routing for the delivery of products. However, before she begins, she must consider several factors, such as what exactly an order routing engine does. How can better order routing logic improve Thriftstore Inc.’s bottom line? What are specific strategies that order routing engines use to decide how to fulfill each customer’s order? How should Cindy decide which of these strategies are right under different conditions?

More than a third of Thriftstore Inc. customers shop through multiple channels when making a single purchase, involving both brick-and-mortar stores and retailers’ websites. More than ever, savvy omnichannel customers expect a seamless experience across these channels when researching, buying, receiving and returning items. Many retailers have risen partly to the challenge by integrating their own and their partners’ inventory systems to enable complete system visibility. However, achieving visibility is only a first step. Omnichannel retailers must also determine how, when and from where each customer’s order should be filled in an intelligent way. If this order routing is not well thought out, the omnichannel retailer will incur huge costs related to unnecessary markdowns, split shipments, and long-distance airplane shipments as well as reduced customer satisfaction and sales due to avoidable in-store stockouts.

Order routing optimization is not just for the computer programmers who code the order routing software; it is also for the managers who are responsible for shipping costs, store revenue and brick-and-mortar stock-out rates. With a plethora of order routing software solutions in the market that differ wildly in terms of quality, accessibility, flexibility, sophistication and computational efficiency, everyone whose job relates to fulfillment should know about order routing. Since Cindy would be procuring, implementing, maintaining, developing or managing customer satisfaction related to order routing logic in the company’s DOM solution, she should be well versed with the intricacies of omnichannel order routing. Otherwise the wrong order routing software may be purchased; it may be the right software but implemented incorrectly or maintained suboptimally, or in-house solutions may fall prey to common pitfalls. All of these undesirable outcomes can lead to sky-high shipping costs as well as lost revenue due to markdowns and lost sales.

Are your omnichannel customers always asking for more? Are your shipping charges going through the roof? Are your customers unhappy with the brick-and-mortar store experience because too many items were shipped to online customers and are now out of stock in store? Is your imbalanced inventory leading to higher fulfillment costs and stock-out rates? Is your order routing engine vendor promising to optimize one cost, only to have another cost skyrocket as a result? The Accenture Academy courses Basics of Order Routing in Distributed Order Management (DOM) Systems, Principal Costs Incurred by Suboptimal Order Routing in a Distributed Order Management (DOM) System, Simple Order Routing Strategies in a Distributed Order Management (DOM) System, Sophisticated Order Routing Strategies in a Distributed Order Management (DOM) System and Opportunity Cost Approach within an Order Routing Engine will introduce you to intelligent order routing and provide a solid foundation that will take your omnichannel fulfillment engines to the next level.

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