What is an Order Management System?

There are many people who use or know about sales order management systems and purchase order management systems but do not know the difference between them. This article reviews the sales order management system and the purchase order management system. In addition, I will introduce the issues that order management systems can solve.

Table of Contents:

• What is a sales order management system?
• What is a purchase order management system?
• An order management system that streamlines both operations
• Summary

What is a sales order management system?

Sales order management refers to the process of accepting orders from customers and linking them to shipments. An order management system is a tool that automates order-taking duties. By automating sales order management, you can increase the efficiency of your order-taking operations and make it easier to refer to in subsequent processes such as shipping and billing.

Especially on e-commerce sites, order management is important because orders and sales occur at the same time, as well as billing and collection processing. In addition, the number of orders handled is enormous, so in order to properly manage orders, it is necessary to consider the connection to purchasing and manufacturing processes. If you use a system to manage orders, you can easily link it with other operations, which will significantly help improve the efficiency of your business.

Advantages of Sales order management system

The first advantage of a sales order management system is that it can be linked to other systems to automate the entire business. As mentioned before, if the data registered in sales order management can be centrally managed and used in other processes, you do not need to enter the same data over and over again.

Furthermore, in the case of an e-commerce site, the implementation of a system can significantly reduce the amount of labor required by the operator. This is because the customer enters the initial order data, and if linked with the inventory management system, it will automatically perform inventory allocation and delivery date answers. 24-hour customer service is possible because the EC site operator does not have to be involved.

As business automation progresses, the number of tasks involving people will decrease, which will reduce human error. In addition, a significant reduction in labor costs can be expected.

The second benefit is that it improves customer satisfaction. By implementing the system, the man-hours are reduced, so the ordered products can be delivered to the customer as soon as possible. In the case of EC sites, it is also a great advantage for customers to be able to order 24 hours a day, anywhere.

What is a purchase order management system?

A purchase order is an activity responsible for product purchasing, raw material purchasing, subcontracting, and direct shipping. The ordering process starts with the inventory control staff examining the inventory of goods, products, parts, and raw materials to identify the need for inventory replenishment, which leads to the preparation of a purchase requisition.

A purchase order management system is a tool that automates tasks such as creating purchase requisitions, selecting suppliers, and creating purchase orders. With a purchase order management system, you can reduce the time to create purchase requisitions and purchase orders.

Advantages of purchase order management system

The workload of purchase orders is large, and the consequences of an error can be enormous. The impact is not only on the company but also on customers, suppliers, and subcontractors, resulting in loss of trust in the company, missed sales opportunities, and even claims for damages. By using a purchase order management system, you can reduce such mistakes.

Furthermore, by linking the purchase order management system with the inventory management system, you can place orders while checking the inventory in real-time. This will help to reduce errors such as stock-outs. In addition, a purchase order management system can be linked to accounting systems and internal systems of suppliers and subcontractors. This will further improve the efficiency of operations and reduce purchasing costs.

An order management system that streamlines both operations

Even if companies have a sales order management system or a purchase order management system, e-mail and fax are still used when sending and receiving order slips between companies. Therefore, many companies continue manually entering order slips into their order management systems.

This is where the sales and purchase order management system comes in handy. A sales order and purchase order management system centralizes order and supply operations in the cloud. And it can be accessed and used not only by one company but also by suppliers and subcontractors. Since each person in charge of receiving and placing orders can check the contents on the cloud and proceed with their work, it is superior to using a sales order management system and a purchase order management system separately. And this can further improve efficiency.

Issues that can be solved with an order management system

In this section, I will introduce three specific issues that can be solved with an order management system.

Personalization

Sales ordering and purchase ordering operations are complex in the work process, and manuals are often cluttered. Managing in Excel and spreadsheets is at its limit. However, with the order management system, anyone can easily manage the business according to the system’s guidance. It will be easier to eliminate the transfer of people, take over, and educate newcomers. Even if the person in charge is not available, we can handle the order.

Filing of sales and purchase orders

Connecting the order management system to the accounting system eliminates the need to file sales and purchase orders. If you are sending and receiving sales or purchase orders via email or fax, filing these documents is required by tax law. However, there is no need to file anything entered in the order management system because the data is stored in the database.

Identifying customer needs

When you use an order management system, your orders are reflected in the system in real-time. This makes it easier for you to get fresh information and read the needs of your customers. Also, with a cloud system, you can access and check the system from anywhere with your PC or smartphone. This helps prevent the loss of sales opportunities.

What is Sales Management?

Summary

A sales and purchase order system is a tool that allows you to manage your order and supply operations centrally in the cloud. In addition to the functions of the sales order management system and the purchase order management system, the system brings efficiency improvements to both the company and its business partners through inter-company collaboration with business partners.