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Want to improve operational efficiency? Increase order automation.
Want to improve operational efficiency? Increase order automation.
Brian Ballard
by Brian Ballard

Every business strives to improve operational efficiency in an effort to reduce overhead and free up resources for strategic initiatives.  One of the ways that retailers accomplish this is by reducing or eliminating the number of times a person has to interact with an order before it is fulfilled.  This concept, often referred to as Order Automation, has the added benefit of reducing fulfillment times. This further enables retailers to compete with the Amazons of the world and addresses customer expectations of increasingly shorter delivery times.

This article evaluates some of the common causes of failed order automation and provides some recommended approaches for mitigation.  We hope that it inspires you undertake your own evaluation and look internally for opportunities to improve operational efficiency and the customer experience by increasing order automation.

Reasons why orders don’t automate and recommended solutions

Every business is unique and orders fail to automate for many reasons.  When they do fail, each occurrence generally requires that the customer be notified to resolve the issue.  This often results in a negative experience and wasted customer service or operations cycles.

Below are a few common reasons for order automation failure.  Depending on the nature of your business and whether it operates in a B2C and/or B2B capacity you may find that some, but not all, resonate with you.

  • Inventory Availability Discrepancies: Many retailers have issues with customers placing orders for products that are no longer available by the time the order is sent for fulfillment.  This can be reduced or mitigated by taking a few actions:

    • Implement an inventory feed from the back-office system of record to all customer-facing order entry systems.  Ensure the schedule is regular enough to account for fast-moving inventory.

    • Create inventory thresholds that trigger out of stock or low stock indicators when an item is nearly unavailable.  This is especially important for fast-moving inventory.

    • Finally, when the customer places the order, validate inventory via a real-time query to the system of record.  If there is inventory available, reserve it to ensure that it is available when the order is routed for fulfillment.

  • Declined Credit Cards: Many retailers that have longer fulfillment times often elect to wait fully authorize a customers credit card until the order is ready for shipment.  In these scenarios the full authorization is usually executed as part of the settlement process.  Often times these organizations also push credit card verification to the back office as well.  If a credit card is declined for any reason the retailer cannot complete fulfillment without customer intervention.  Consider taking the following actions at the time the customer provides their form of payment enabling them to make corrections before submitting their order:

    • Implement mod-10 verification directly in the order entry system.

    • Verify the credit card with the payment provider to ensure that the credit card information entered is valid.

    • Authorize the credit card for the full amount of the order to ensure that there are sufficient funds for settlement.  If full authorization isn’t possible with your business consider partial authorization.

  • Invalid Shipping Addresses: Similar to the declined credit card scenarios, many organizations do not verify customers’ addresses until after the order is submitted.  In addition to preventing an order from being shipped, an invalid address can impact tax calculation and cause an order to be put on fraud hold (especially if it is a P.O. Box).  

    To address this, consider using a service like Experian (EDQ) or your tax service to validate and cleanse the customers’ address at the time they enter it.  This will give them the opportunity to select from a list of options and ensure that the correct address is entered before the order is placed.

  • Incorrectly Configured Products: Often times order entry systems rely on local rules engines to determine whether or not a product configuration or configured bundle of products can be purchased.  These rules engines are often disjointed from the fulfillment systems and many times result in orders being placed for configurations that cannot be fulfilled.  Like the other examples, this typically necessitates that a customer service agent call the customer and help them through their configuration or cancel the order.

    This challenge is often difficult to solve and there are many products in the market that are designed specifically for configurable products such as SAP CPQ or Logik.io.  However these solutions may be overkill for many scenarios.  Before purchasing a new product, consider integrating your order entry systems directly with the system of record for master data.  Implement the configuration rules in the system of record and feed them to the order entry system so that they use the same set of rules that are used by the fulfillment systems.

  • Poor Conditional Handling of Orders: Many retailers allow customers to enter notes or special instructions that help dictate how their order should be handled, fulfilled, or shipped.  However, they are often just plain text fields with no conditional logic for routing.  In many organizations an individual must physically process the instructions and route the order accordingly.  Many times, however, customers don’t enter instructions at all and instead elect to call their sales/customer service representative or abandon the order all-together in favor of purchasing elsewhere.

    To avoid this identify commonalities in special instructions and implement an interface in the order entry system that enables the customer to select from a list of special instructions before placing their order.  Then implement logic in the back-office systems to handle these instruction codes in an automated fashion.  This won’t address edge cases but should handle the majority of scenarios.

So What?

Increasing order automation can be a great way to improve operational efficiency, particularly for retailers.  If implemented correctly this may impact your business in the following ways:

  1. Allow re-positioning of resources to focus on other strategic initiatives that will either drive revenue or further improve operational efficiency.

  2. Lower the time it takes to fulfill an order improving competitive positioning against other retailers like Amazon.

  3. Improve the end-consumer’s overall user experience in interacting with your brand, likely leading to an increase in repeat business.

  4. Enable reduction of now-unnecessary resource overhead.

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