Locus’ Guide to Optimal Last-Mile Order Management System

When Alice in Alice in Wonderland fell into a rabbit hole, she came across a strange, absurd, and alternate universe she had never witnessed in her life.

Like Alice, the whole world fell into a rabbit hole called COVID-19 for a few years. But the difference is that the alternate world has become the new reality. The new reality is the sudden spike in online shopping; in this new world, a fair share of consumers prefer to shop online. In research done in early 2023 of 17,218 consumers worldwide, 43% of consumers in the US prefer to shop online rather than in-store.

And what can be said about consumers in the digital economy? They are empowered by connected technology, their expectations around services are growing daily, and they want the best prices in the market without compromising quality.

With online orders flowing in, we need systems, processes, and technologies to help businesses ease the pressure on their supply chains. Order management software (OMS) helps bridge the gap between supply chain management and customer experience to ensure successful delivery experiences.

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What is an Order Management System (OMS)?

Before getting into OMS in detail, it is worth looking at what order management is. E-commerce order management is the end-to-end process of handling the lifecycle of an order. In the last few years, order management has depended on cumbersome enterprise resource planning (ERPs) and spreadsheets that slow down the movement of goods. These systems are outdated and unfit to support the fast-paced market of today.

Hence the need for an order management system. OMS is often a standalone software application integrated with ERP systems that deliver consistent customer service by automating every step of the product journey. It allows managers to keep track of orders coming from multiple sales channels and fulfillment points.

What are the stages of an Order Management process in the last mile?

There are four stages for an order management process in the last mile. They are:

1. Order Creation

In this stage, a customer places an order online or in-store. Once the customer places the order, it is sent to the pickers, carriers, or delivery agents through a central Warehouse Management System (WMS).

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2. Order Processing

This is a stage where the order is packed, grouped, organized, and sorted together using a delivery management system based on setup rules like ZIP codes. Based on the ZIP codes for the order, it is then picked up or assigned to the driver who serves that area daily.

3. Order dispatched and sent for delivery

During this stage, the warehouse managers use route planning software to create optimal routes, stops, and detailed navigation for different orders. With these detailed instructions and route recommendations, the drivers/delivery agents deliver the orders to the designated customer destinations.

https://locus.sh/blogs/delivery-route-planning-is-crucial-for-drivers

4. Order returns

Lastly, order returns are a critical stage in order management. The order returns management starts once the customer requests for return, cancellation, or replacement. In this phase, the items ordered are returned at the doorstep, in-store, in lockers, or in other convenience stores. Based on the request, a delivery business either sends a replacement for the order and gets the order back or refunds the amount. A comprehensive and delightful customer delivery experience is incomplete without a seamless returns experience.

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What are the features to look out for in an Order Management System?

OMS bridges the gaps between order entry, processing, accounting, tracking warehouse operations, and business intelligence. It uses real-time data to oversee sales, inventory, and fulfillment processes. 

How complex the OMS system is depends on the requirements of the business. Here are some features of OMS to consider while looking for a solution for your business.

1. Order tracking

The function of an OMS is to make life easier for not the business alone but also its customers as well. The most fundamental and critical feature an OMS should have is order tracking. By tracking orders, companies can sell orders via several channels as it centralizes sales, saves time, and increases productivity. 

2. Route optimization

A good OMS can generate optimal delivery routes that minimize shipping costs and speed up deliveries. Whether planning routes for shipping or returns, it only takes a few minutes to factor in the constraints involved in order fulfillment and develop a quick and cost-efficient route. 

3. Analytics and Insights

Once your business begins to grow, it will be challenging to maintain end-to-end visibility in your last mile with a bird’s eye view. With siloed information or separate fragments, ensuring smooth and efficient workflows across different departments isn’t easy.

A good OMS enables your businesses to monitor all orders from a unified system, analyze all inter-departmental information, and make data-driven decisions. This helps your business reduce shipping costs, improve delivery speed, make delivery fulfillment predictable, improve customer experience, and save money in the long run. 

Want to minimize shipping costs for each delivery and make it more profitable? Read this now!

4. Capacity Planning and Management 

There are two needs for a business with respect to capacity planning and management – one is to on-demand allocation of tasks, and the other is securing capacity for the future. With a good Order Management System, businesses can secure the capacity for sick days, holidays and peak shipping days when needed the most. Also, it enables fleet managers to build delivery plans and assign on-demand tasks in a few clicks based on driver shifts, availability, and vehicle capacity without any manual intervention. 

5. Customer Support Integration

Another critical feature to look out for in an OMS is its customer support integration. A company’s OMS must be integrable with any software so that a business can easily access its information on past orders and work on them. Most importantly, if an issue arises with the company that uses OMS, the customer support team should track it down and resolve it as soon as possible. This makes the OMS more reliable to invest in and use.

Time To Value And Its Importance For the Last Mile

Why is order management so important in the last mile?

There are two essential reasons why last-mile order management is critical.

• To deliver orders quickly 
• To accommodate large volume of orders during peak season
• To make deliveries more predictable and delightful 

Customers want their orders as quickly as possible. In a recent survey of 1066 consumers in the US, 40% of them expected their online delivery to take two to three days, and 27% wanted their orders to reach them on the same day or the next day. Businesses must focus on getting their deliveries to customers quickly to stay competitive. But is this enough? The answer is no. 

More than speed, customers want a delightful delivery experience and predictability in deliveries. Say, your business makes an order to a customer on time but fails to make it there the next time. Your consistency in making quick and on-time deliveries is only 50%. Consistent on-time delivery experience makes customers like it and recommend it to others. And when they recommend it to others, your NPS score improves, building a loyal customer base. 

Net Promoter Score (NPS): What Is It? & How To Calculate

4 Ways Locus’ Last-mile Order management software benefits your business 

The movement of goods from the warehouse to the final delivery destination constitutes the last mile. It is also the most elusive and challenging part of the supply chain. An OMS for the last mile can help keep costs in check and provide a range of operations like delivery scheduling, task allocation, routing, and real-time tracking. Here are some of the ways Locus’ AI-powered OMS solution can help optimize the last mile:

https://locus.sh/blogs/calculate-transportation-costs-logistics

1. Revenue Generator

A robust order management system can help shippers not miss out on orders during peak season. Due to the sheer volume of orders that pours into the order management during this time, it is imperative that shippers implement a robust OMS or DMP solution with built in OMS to make sure all orders are assigned and accommodated.

2. Customer Loyalty

An intelligent OMS can make sure no orders go unassigned and unaccommodated and are delivered on time due to smart route and capacity planning features. This helps shippers deliver stellar customer experience and build loyalty among their customers and increase brand value.

3. Efficient planning and execution

With the help of AI-driven logistics planning, brands can manage their delivery operations with ease. Route Planning Software helps with timely order scheduling, resource allocation, and route optimization, making last-mile planning fast and efficient. 

Read Also: Last-mile Delivery logistics 

4. Adds sustainability to your last-mile deliveries 

Locus’ time-slot management system allows logistics managers to plan last-mile operations more systematically. It lets customers pick the most convenient time slots for their deliveries or home service requests. Using these inputs from customers on their preferred time slots, businesses can effectively cluster deliveries for optimal load capacity, higher drop density, and lesser number of vehicles on the ground. This helps them in minimizing the empty miles driven by the fleet. 

With Locus’ time-slot management feature, businesses can batch forward and backward shipments of the same service areas and time slots. This enables them to minimize the distance traveled per order. More importantly, it helps businesses provide sustainable delivery time slots that facilitate carbon-efficient route plans, embedding sustainability into the last mile.

Summing up! 

Order management processes are long and tedious, but businesses have many OMS options to choose from—everything from manual order management systems to more comprehensive solutions. Adopting the right OMS system for your business improves the scope of automation, reduces errors, and enhances the end customer experience.

Are you looking to make your last-mile order management efficient and customer-friendly? Schedule a demo!

References

1. https://www.statista.com/statistics/1271829/expected-delivery-time-online-purchases-united-states/#:~:text=Expected%20delivery%20time%20of%20online%20purchases%20in%20the%20U.S.%202021&text=According%20to%20a%202021%20survey,take%20two%20to%20three%20days.
2. https://www.statista.com/statistics/1271829/expected-delivery-time-online-purchases-united-states/#:~:text=Expected%20delivery%20time%20of%20online%20purchases%20in%20the%20U.S.%202021&text=According%20to%20a%202021%20survey,take%20two%20to%20three%20days.