Distributed Order Management System (DOM)

Distributed Order Management System (DOM)

Today’s consumers now engage with a company through multiple channels simultaneously in a physical store, on an online website or mobile app, through a catalog, or through social media. They can access products and services by calling a company on the phone, by using an app on their mobile smartphone, or with a tablet, a laptop, or a desktop computer. Each piece of the consumer’s experience should be consistent and complementary.

Traditional order management systems (OMS) – aren’t flexible enough to support multiple channels, fulfillment methods, locations and return points. Instead they operate in silos, connecting only single channels to single inventory sources. This limits inventory visibility throughout the supply chain. When merchants don’t know how much inventory is available and where it is located at all times, it is difficult for them to make and keep delivery promises or route orders to optimal fulfillment locations.

To improve the customer experience, merchants must gain real-time inventory visibility across all their channels. A single, holistic view of all inventory allows companies to optimize order fulfillment, allocation, and distribution. That’s where Omni-channel retail model came into existence.

Omni channel retail is a business model in which all existing channels become completely integrated to offer customers a seamless shopping experience.

This Omni channel retail strategy is empowered by centralized data management, which means that the distinctions among channels, both physical and online ones, are blurred. Distributed Order Management System (DOM) is that middleware which optimizes order fulfillment across a complex network of systems and processes. It relies on a single, global view of inventory across an entire organization to intelligently manage orders so they are fulfilled accurately and cost effectively. Distributed order management technology improves the efficiency of your supply chain, allowing you to better meet customer expectations.

Unlike traditional order management, DOM is much more dynamic. It uses more modern technologies that allow your company to be more agile. It treats all parties involved in order replenishment process as if they are in the same organization, even though they aren’t. Merchants benefit from more information of and visibility into their supply chain which alleviates some of their former pain points.

DOM solves common fulfillment problems, which allows for accurate fulfillment of drop shipped items, optimized shipping costs by using the most affordable shipping processes, supplier fulfillment to stores in smaller, more frequent batches, and purchasing from the most affordable supplier always.

With visibility across the entire supply chain, there’s no more guessing or wondering the status of your orders. This makes it easier for you to communicate to your customers too.

According to Gartner’s report on warehousing and fulfillment 2015, a distributed order management system is a type of order management system that has the following four components:

  • A central view of inventory: An enterprise-level view of inventory – in stores, distribution centers, 3rd party providers, in transit vendors.
  • Complete customer info:  Details of the customers such as address etc.
  • Rule engine:  This is the ‘brain’ – a set of rules to decide and orchestrate how orders are to be fulfilled from available inventory.
  • Capability to instruct: This means that the system has the capability to relay orders to other systems in distribution centers, suppliers or stores to use available inventory and carry out the physical fulfillment process.

While this may sound like the perfect solution to all your fulfillment woes, it is important to note that a DOM system is not for everyone.

You need DOM if you have a wide network of manufacturing facilities, multiple distribution centers – i.e., a fairly comprehensive supply chain. However, if you are a mid-level or small sized retailer with a more localized network, then a DOM system is probably not for you.

Post by Corporate Rishi
March 31, 2020

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