OMS and WMS Integration for eCommerce

As online businesses grow in size and sophistication, they require two essential systems: an order management system (OMS) to manage front-end order processing and a warehouse management system (WMS) to manage back-end order fulfillment. Eventually you’ll need tight OMS and WMS integration for eCommerce to provide the data you need to run your business. But it’s an evolutionary process.

What is a OMS and WMS?

An OMS is designed to accept orders from your various marketplaces and online outlets, validate those orders, manage returns, track inventory and fulfillment, and handle all billing-related details. A WMS is designed to manage the day-to-day activities in a warehouse. It guides inventory receiving and put-away, optimizes picking and shipping of orders, and advises on inventory replenishment. A WMS is not an OMS. When an order comes into the WMS, it should be good to go. For instance, backorders should be flagged within the OMS before sending to the WMS as an order to be fulfilled.

To check on order or inventory status, you can log into your fulfillment partner’s portal. Or, the OMS and WMS systems can be connected, so you can update your own OMS system with this information through a regular API feed from the WMS to the OMS.

What is the importance of an OMS system as you grow?

OMS and WMS integration for eCommerce may not be as important for eTailers still in the traction stage of their growth cycle. For instance, if you’re only selling via a Shopify website, there’s really no need to “manage” the orders. You just need a fulfillment partner to pull orders off Shopify and ship them. You would connect to your provider’s system to access order status and inventory data, and to download reports.

But what if you start selling on multiple marketplaces (Shopify, Amazon, eBay, etc)? In this case, having your own OMS can avoid some difficult situations. For instance, if you only have 100 of a particular SKU, but you have 4 channels where you sell that product, do you make all 100 available on all sites? If so, you could have a backorder situation. Sure, the warehouse could send a partial shipment and the send the rest of the order when the inventory arrives, but that’s two shipments for one order. Not ideal.

Or, what if you get fraudulent orders? If orders flowed directly to the fulfillment house, you would not know this until after the fact.

With an OMS you are the aggregator of all inbound orders, with an ability to see and control how and when those orders are processed. Aggregated orders are sent to the fulfillment warehouse via API. The same API feed allows you to query the WMS system for updates on tracking data, inventory and order status so that your internal OMS is the system of record – and it matches the data in the WMS.

How do you know when you need an OMS?

Once you start selling through 2–4 different online marketplaces, including your own, you’ll want to have an internal OMS system to manage and control those orders. With 4 marketplaces, you don’t want to log into 4 different systems to know how many orders you have in each marketplace and how much inventory you have to support those orders. You want one OMS system with the ability to run a wide variety of reports and group them by order source (500 from Amazon, 300 from Shopify, etc.).

With an OMS, visibility and control become simpler, and quite necessary, when you have multiple sales channels.

Scalability applies to IT systems, too!

When thinking about what fulfillment partners can support your online business, scalability is a significant factor. Most eTailers think of scale in terms of physical infrastructure. Do they have nationwide fulfillment warehouses? Can they automate operations for high-volume order fulfillment?

But scalability applies to information systems, too. Here, a different set of questions apply. Does the fulfillment company have experience integrating OMS and WMS systems to process and manage orders from multiple online marketplaces? Do they have in-place EDI connections to retailers to support a true multi-channel fulfillment environment?

Don’t assume that, because a fulfillment partner can pick and pack on order, that they are equally adept at managing the critical data integration side of the business. As part of your due diligence, talk to the fulfillment provider’s IT team and dig into the details of how they would get you the data you need for full visibility and operational control.

If you’re looking for a fulfillment provider that comes is experienced in systems integration for eCommerce, talk to a Staci Americas expert.