Understanding the Importance of Order Management & Inventory Control
August 14, 2023 - 12 minutes readEverything you need to know to streamline your business operations
As a retail or eCommerce business owner, having a firm handle on your order management and inventory control strategy is vital.
Without having a clearcut system to ensure you make the best choices when it comes to ordering stock and keeping your inventory control processes flowing, you will stunt your business’s growth, damage your brand reputation, and drain your budget.
Fortunately, we live in a tech-driven digital age where we have the tools to track essential insights and streamline order management and inventory control processes.
Let’s consider the importance of order management and inventory control while looking at some tips, tricks, and best practices.
Ready? Let’s dive in.
What is order management?
At its core, order management is the process of picking, packing, and shipping goods to your customers.
Order management is the end-to-end process from warehouse to consumer address and the various steps in between. Armed with the right tools, it’s possible to automate key parts of the order management process while uncovering trends and insights that will ultimately boost your productivity while saving you money.
What is inventory control?
Next up, we have inventory control. At its core, inventory control is the process of efficiently managing your stock once it arrives at your storage space or warehouse.
Inventory control is centered around the continual storage, merchandising, and movement of your retail or eCommerce stock. Like order management, working with the right tools will help you efficiently quantify your stock levels, help you keep track of your storage efforts, and optimize key parts of the process.
FYI: While order management and inventory control have striking differences, the two concepts also have some overlap. By making both strategies as efficient as possible, you will streamline your business’s operational processes, boosting your bottom line in the process.
Why is improving your order management and inventory control processes important?
Now that we’re up to speed with the basics of order management and inventory control, let’s consider why getting a firm grip on these processes is so crucial to your ongoing commercial success.
Your stock forms your foundation
The products you offer to your customers are what define you as a brand or business. The stock you decide to invest in and sell through your store is essentially your lifeblood—your very foundation.
That said, managing your orders and handling your inventory with confidence, accuracy, and intelligence will ensure you keep scaling while enjoying a consistently healthy return on investment (ROI).
Financial health
If you consistently invest in stock that perishes or fails to sell, you will drain your budget and minimize your profits.
Redundant space in your warehouse will create inefficiency while leaving less room for inventory that will result in healthy profits. With access to the right inventory control insights, it’s possible to track essential sales and stock handling data with ease, giving you the tools to make decisions that will reduce unnecessary costs while keeping your finances flowing.
Brand reputation
Consistently delivering on your promises is one of the cornerstones of ongoing success as a retail or eCommerce business.
Without developing a cohesive order management strategy, glaring holes in your processes will start to form and your fulfillment rates will start to dwindle. With the right strategy and the data-driven tools to track, manage, and distribute your order management resources, you will ensure you meet your delivery promises, even during the busiest of periods. Armed with the ability to streamline your picking and packing processes while optimizing your shipping strategy, you will ultimately improve the customer experience (CX)—boosting your brand reputation in the process.
Planning and ordering accuracy
Sharpening up your order management and inventory control strategy will empower you to make informed decisions when it comes to striking the perfect balance between supply and demand.
Gaining access to an interface or dashboard where you can interact with visual data based on order fulfilment, sales, and stock levels will help uncover patterns or trends based on best-selling products, seasonal popularity, and customer buying behaviors.
Using this information to your advantage, it’s possible to make accurate stock sourcing predictions based on seasonal trends or patterns while promoting the right products via your online store as well as your most engaged social media platforms.
Read: The art of upselling: how to maximize your profit and improve the shopping experience for tips on how to keep your most valuable inventory moving.
Growth without teething
One of the biggest roadblocks most eCommerce or retail business owners experience is operational ‘teething problems’ when experiencing growth.
To remain productive and successful, your order management and inventory control processes need to scale with your business. As demand increases, you will need to optimize your storage space, expand your shipping and fulfillment processes, and ensure you’re making the most valuable decisions when it comes to procuring new stock.
If you’re bogged down with laborious manual processes and a half-baked order management and inventory control strategy, you will start to spiral out of control quickly. But, with the right systems and methods in place, you will reap all the rewards of commercial growth without the kind of operational teething problems that waste time and money.
“The only thing worse than being blind is having sight but no vision.”— Helen Keller
Essential order management and inventory control tips
The importance of taking charge of your inventory control and order management processes is undeniable. Now let’s look at some practical tips to get your strategy in shape by working with the right tools.
Source your products from the right places
When it comes to optimizing your order management strategy, you should regularly assess your suppliers for consistency or quality.
Tracking supplier delivery performance as well as inventory quality will help you identify any partnerships that offer a poor ROI. That said, you can replace poor suppliers and product sources before they slow down your order management processes and sap your budget.
Have a ‘critical stock’ in place
Working with modern order management and inventory control software will give you an accurate overview of the stock that offers you consistently healthy profit margins.
Using this information to your advantage, you should set aside space for a curated selection of critical stock. These carefully-sourced items are essentially the backbone of your business. Whether it’s your best-selling items, products that people strongly associate with your brand or even spare parts for internal machinery related to your order management chain, you should always ensure these critical stock items are available when you need them the most.
Reduce lag times
Delivery drivers waiting around for orders to be prepared and loaded will have a negative impact on your productivity levels, not to mention your brand reputation.
Keeping an eye on order fulfillment trends will allow you to swiftly pinpoint any issues that are causing ‘lag’ times within your order management chain and take targeted measures to tackle the problem before it gets out of hand.
Prioritize reducing lag times and you will be far better equipped to deliver on your promises, improving your reputation while improving customer loyalty rates (which will boost your long-term profits).
Empower everyone
With your newfound order management and inventory control processes in place, you should ensure that everyone in the business is fully onboard.
In addition to running through each new process and the concepts behind them in detail, you should host small workshops to train everyone on the tools and platforms that will empower them to perform to the best of their abilities.
With everyone pulling in the right direction and able to use your new tools and solutions to their advantage, you will enjoy the best possible ROI for your efforts.
Final thoughts…
“I think a simple rule of business is, if you do the things that are easier first, then you can actually make a lot of progress.”— Mark Zuckerberg
Investing in your order management and inventory control strategy will ensure your retail or eCommerce business sits on solid foundations. Putting the right processes in place and working with tools designed to streamline your operations while giving you a deeper insight into behavioral or performance trends will accelerate your commercial success in a competitive environment.
These days, shooting in the dark and hoping for the best won’t get you where you need to be. Working with the right tools for the job will make keeping a handle on your ordering and inventory management processes easier. It will also make you far more efficient.
At Agiliron, we offer tailored order management and inventory control solutions. Get in touch with one of our solution experts to learn how inventory and order management software can help you operate more efficiently and increase your revenue.
