Order Management
Quick facts
| Category | End-to-end customer order tracking |
|---|---|
| Used by | Manufacturing, medical devices, pharmaceuticals, aerospace, automotive and other production-based industries |
| Also called | None widely standardized |
| Related standards | None specific |
| Related processes | Sales management, work order management, shipping management, customer management |
| Semantic match | order management, sales order processing, order status tracking, order fulfillment visibility |
What is Order Management?
Order management is the process of tracking a customer order from the moment it is placed through every stage of fulfillment, giving real-time visibility into order status regardless of which department currently holds responsibility for the next step.
Once an order is entered, order management coordinates its progress through inventory allocation, production if applicable, shipping and final delivery, ensuring that everyone involved, from sales to operations to finance, is working from the same current status.
Because orders touch so many different functions, effective order management depends on close integration with sales, inventory, production and shipping systems, rather than existing as an isolated tracking tool disconnected from the processes it is meant to coordinate.
Why is Order Management important?
Without centralized order tracking, different departments may have conflicting information about an order's status, leading to miscommunication with customers and delays in identifying problems.
Real-time order visibility allows organizations to proactively manage exceptions, such as a material shortage threatening a delivery date, rather than discovering the issue only when the customer asks for a status update.
Consistent order tracking also supports better reporting on order backlog, fulfillment performance and on-time delivery, informing both day-to-day operations and broader business planning.
How does Order Management work?
A typical order management process includes:
- Order entry. Record the customer order with items, quantities and requested delivery dates.
- Allocation. Reserve inventory or trigger production based on order requirements.
- Production or fulfillment. Coordinate any necessary manufacturing or picking activity.
- Shipping. Track the order through packing, labeling and dispatch.
- Status visibility. Provide real-time order status to sales, customer service and the customer.
- Closure. Complete the order and hand off to invoicing.
Order Management vs. Sales Management
| Comparison | Order Management | Sales Management |
|---|---|---|
| Scope | Tracking a confirmed order through fulfillment | The full sales cycle, including quoting and customer relationships |
| Primary focus | Status visibility and coordination across departments | Winning and managing customer business |
Real-world examples of Order Management
A manufacturer's order management system flags a material shortage that could delay a customer order, allowing the team to proactively communicate a revised delivery date rather than being surprised by a missed commitment.
A contract manufacturer tracks order backlog across all active customers, using that visibility to plan capacity and prioritize production for orders approaching their delivery deadline.
An electronics company gives its customer service team direct access to order status, allowing them to answer a customer's delivery question accurately without needing to check separately with production or shipping.
Regulations and standards related to Order Management
Order management is not itself a regulatory requirement, though accurate order records support broader traceability, since a specific customer order is often the reference point connecting a shipment back to the materials and production records behind it.
How QT9 helps with Order Management
QT9 ERP order management capabilities
- Centralize the processing of customer orders with real-time visibility from entry to delivery.
- Connect orders directly to inventory, production and shipping data.
- Track order backlog and on-time delivery performance across the business.
- Give sales and customer service teams accurate, current order status.
- Automatically flag exceptions, such as material shortages affecting delivery.
- Support reporting on fulfillment performance and customer profitability.
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Common mistakes with Order Management
Common mistakes include tracking order status in disconnected systems across departments, creating conflicting information about where an order actually stands.
Other problems include failing to proactively flag exceptions, such as inventory shortages, allowing delivery delays to surface only when a customer asks rather than being identified and communicated ahead of time.
Frequently asked questions
Related quality management terms
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