Definition: Order Management System

What is an Order Management System?

An Order Management System (OMS) is a software application that manages the lifecycle of an order. It automates and handles the order fulfillment process, such as order capture, inventory management, order processing, shipping coordination, and after-sales service. OMS can also act as a central hub and consolidate order-related information from various channels and systems, offering merchants a comprehensive view of every customer's order in one place.

Some examples of OMS systems are Zoho Inventory and Netsuite Order Management.

What are the common features of an OMS?

Here are some common features of an Order Management System (OMS):

  • Order Capture: Allows users to capture and record customer orders from various channels, such as online storefronts, mobile apps, call centers, and in-store POS systems.
  • Inventory Management: Tracks and manages inventory levels in real-time, providing visibility into stock availability, locations, and replenishment needs.
  • Order Processing: Automates the processing of orders, including order validation, payment processing, fraud detection, and order confirmation.
  • Shipping and Logistics: Integrates with shipping carriers to generate shipping labels, manage shipping options, calculate shipping costs, and track the delivery status of shipments.
  • Customer Communication: Provides automated order notifications and updates to customers, including order confirmation, shipment tracking, and delivery notifications.
  • Returns and Exchanges: Manages the return and exchange process, including issuing return labels, handling product returns, processing refunds or replacements, and updating inventory accordingly.

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