Order Management System – 5 Key Requirements for Companies Who Sell Through Distributors

Brands that sell through distributors or extended value chains have exclusive order management needs. The model of their business affects the specific types of information that the company need to collect, the business processes required to support their sales execution, and the leveraging of all this knowledge for forecasting and demand analysis.

SalesBabu has been supporting the order management needs of different vertical manufacturers like electronic components and semiconductor manufacturers for years. 

Over that time, we’ve experienced a great deal about the requirement for an efficient sales order management and demand management solution from our customers, since many of them sell through distributors or extended value chains.

Based on the feedback and our experience, we found that OMS is organized into these five specific categories:

#Multiple Customers:

In the ordering process, one of the foremost requirements is the need to track more than one customer. The end buyer and the sell to the customer may vary along with the ship to company and location. This information about different customers impacts the whole business process, the required order and pricing management, and the forecasting and demand analysis. This is actually kind of important and unique to the organization that we’re working with, or at least vendors that sell through distributors or through extended value chains.

#Complex Shipping Terms:

Regarding shipping functionality, we’ve identified an additional requirement. In the technology industry, it’s common practice to use the shipping accounts and terms of your customers rather than your own.

This means that companies selling through distributors often rely on their customers’ shipping accounts. Shipping terms and conditions can vary based on specific customer requirements, such as the ship-from or ship-to locations, shipment weight, and the need for re-shippers.

These shipping requirements must be communicated through the order and the customer’s profile, all the way to the shipping dock. The shipping dock could be an outsourced fulfillment center in an inventory hub or a key supplier providing logistics services. The challenge lies in collecting and capturing the shipping terms for these often complex extended value chains.

#Flexible Pricing Models:

Another important area relates to pricing. There can be a single customer, distributor, OEM with multiple price points for the same product where either they might get a discount based on specifically negotiated terms for end buyers, or a rebate based on sales later on. This pushes a requirement for different pricing models and terms for the same ship-to customer for the same product based on who the end buyer is.

#Booking/Billing/Backlog Metrics:

The fourth influential area of focus rotates around the requisites for distinctive metrics and management procedures. Such encompasses detecting booking billing backlog, obtaining fundamental variables for change, estimating historical scheduled delivery records, and determining performance in sticking up to the scheduled responsibility for customers.

Within the technology industry, the efficiency process mostly lies way beyond the direct supervision of internal operations team members. Although, the commitment for maintaining external suppliers lies squarely on the shoulders of the team members. Hence, it is vitally important to execute scheduled dates and commit to them as per the expected planning.

Moreover, sustaining details of how efficiently these responsibilities are executed becomes a fundamental part of the clients delivery performance criteria. Manually maintaining such criteria can drain a worthy amount of time per week, underscoring the necessity of automation in such activities.

#After-sale Inventory Tracking:

The fifth pivotal requisite is associated with tracking inventory post-sale. Such a process includes tracking the journey of stock till hubs, VMI (Vendor-Managed Inventory) storage facilities, or the distribution channels.

Although, incorporation of POS (Point of Sale) information lies as important for exhibiting the status of the inventory and noting the stock utilization in cases where a JIT (Just-in-Time) system is draining the stock. Further considerations involve stock rotation, the right to replace, cost price guarantees, and discount availability.

Irrespective of the certain scenario, monitoring inventory after a sale delivers as an important demand indicator, authenticates pricing plannings, and grants feedback on the assembling of inventory among the channels. Moreover, certifying the ultimate end clients who consume the inventory is necessary for both pricing and demand evaluation.

Eventually, understanding possible liabilities associated with the returns or rebates is a pivotal aspect of such a process.

Conclusion

These five themes form the initial core product vision for SalesBabu OMS. We see the potential to add even more value in future versions in addition to these themes. For example, forecasting is probably part of your CRM system already. 

But, if you are doing a forecast by the end buyers, there are lot of data to filter through to compare the reality of your sales orders to your forecast plan. To judge the forecast and come up with the forecast for the supply chain team to use for their build plan is also needed. 

We easily identify and reports the specific data needed to streamline this process. In addition, our software provides the data you need, which significantly impacts how revenue is determined in this business model.