By Order processing automation streamlines your business operations, cuts costs, and boosts customer satisfaction. Here’s what you need to know:
- Automates manual tasks from order entry to shipping
- Reduces processing time from days to hours
- Cuts errors and frees up staff for higher-value work
- Improves accuracy to 99.7% and reduces costs by 10-15%
Key steps to implement:
- Analyze current processes
- Choose the right tools
- Implement changes gradually
- Train your team
Essential features to look for:
- Real-time inventory tracking
- Multi-channel order management
- Smart order routing
- Automated payment processing
- Shipping integration
| Benefit | Manual Processing | Automated Processing |
|---|---|---|
| Processing Time | 8.6 hours | 4.6 hours |
| Accuracy Rate | 82% | 99.7% |
| Cost Reduction | – | 10-15% |
| Scalability | Limited | High |
By automating order processing, you’ll handle more orders efficiently, reduce errors, and improve customer satisfaction – all while cutting costs and freeing up resources for growth.
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What is Order Processing?
Order processing is the backbone of any business that sells products or services. It’s the series of steps that happen from the moment a customer places an order until they receive their purchase.
Steps in Manual Order Processing
Here’s what manual order processing typically looks like:
- Order Placement: Customer submits an order via phone, email, or in person.
- Order Entry: Staff manually inputs order details into a system.
- Inventory Check: Employee verifies if items are in stock.
- Payment Processing: Staff processes payment manually.
- Order Fulfillment: Workers pick and pack items.
- Shipping: Staff arranges shipping and updates order status.
- Confirmation: Employee sends order confirmation to customer.
Problems with Manual Methods
Manual order processing comes with a host of issues:
- Time-consuming: Staff spend hours on data entry and order management.
- Error-prone: Human mistakes lead to incorrect orders and unhappy customers.
- Costly: Manual processes eat up resources and slow down operations.
Let’s look at some hard facts:
- Finance teams waste up to 520 hours per year on tasks that could be automated.
- Companies lose 20-30% in yearly revenue due to inefficiencies.
- 18% of manually created order forms contain mistakes, with 5% having wrong pricing.
Why Automation Helps
Automation tackles these problems head-on:
- Speeds up processing: Orders go from placement to shipment faster.
- Reduces errors: Automated systems minimize human mistakes.
- Cuts costs: Less time spent on manual tasks means more savings.
Real-world results speak volumes:
- A global footwear brand automated 98% of their orders using Deck Commerce OMS, saving over 1,000 hours.
- Native Shoes cut their return processing time from minutes to seconds, saving 1,700 hours annually.
"Even with increased eCommerce volume in 2020, this past holiday was one of the quietest holidays technology-wise thanks to Deck Commerce." – Sr. Manager Enterprise Applications, Global Footwear Brand
Basics of Order Processing Automation
Order processing automation uses technology to handle tasks that were once done by hand. Let’s look at the key parts, tools, and connections that make it work.
Main Parts of Automation
The core elements of order processing automation include:
- Order Entry: Systems capture order details from various sources (online stores, phone orders, apps) without manual input.
- Inventory Management: Real-time stock updates prevent overselling and stockouts.
- Payment Processing: Automatic verification and processing of payments.
- Fulfillment: Auto-generation of picking lists and shipping labels.
- Shipping: Integration with carriers for real-time tracking and updates.
Tools That Power Automation
Several technologies drive order processing automation:
- Order Management Systems (OMS): Centralize order handling across channels.
- Artificial Intelligence (AI): Helps with tasks like order routing and fraud detection.
- Machine Learning: Improves accuracy over time by learning from past orders.
- Cloud Computing: Enables real-time data access and processing from anywhere.
Connecting With Other Systems
For automation to work well, it needs to link up with other business tools:
| System | Purpose | Benefit |
|---|---|---|
| ERP | Syncs order data with financials | Keeps accounting up-to-date |
| CRM | Ties orders to customer profiles | Improves customer service |
| E-commerce Platforms | Pulls in online orders | Ensures all sales channels are covered |
| Warehouse Management | Coordinates picking and packing | Speeds up fulfillment |
By connecting these systems, businesses create a smooth flow of information. This cuts down on errors and speeds up the whole process.
For example, Extensiv‘s Orderbots show how powerful these connections can be. They can:
- Shop for the best shipping rates in real-time
- Split orders across warehouses
- Route orders to the most efficient fulfillment centers
This level of automation helps businesses handle more orders without adding staff.
"When I was gearing up to launch the business, I was looking for someone who would automate fulfillment for us. I chose ShipBob, and it turned out to be a very easy and scalable solution. Everything was automated, from setting up my store, to sending product, to fulfilling orders." – Josh Hollings, Founder & CEO of Drop FX
Advantages of Automated Orders
Automating order processing brings several key benefits to businesses. Let’s explore how it can improve operations and customer satisfaction.
Faster and More Accurate
Automated systems process orders much quicker than manual methods. They cut down order cycle times from days to hours:
| Manual Processing | Automated Processing |
|---|---|
| 8.6 hours | 4.6 hours |
This speed boost comes with improved accuracy. By removing human data entry, businesses minimize errors in order details, inventory updates, and shipping information.
Saving Money
Order automation leads to big cost savings:
- Reduces labor costs for manual data entry
- Cuts down on expensive mistakes
- Lowers overall processing expenses
A study by the American Productivity and Quality Center found that companies using automated sales order systems saw a 67% drop in costs.
Happier Customers
Quick, error-free orders result in more satisfied customers. Automation allows for:
- Real-time order status updates
- Faster shipping times
- Fewer customer service issues
Josh Hollings, Founder & CEO of Drop FX, shared his experience:
"I chose ShipBob, and it turned out to be a very easy and scalable solution. Everything was automated, from setting up my store, to sending product, to fulfilling orders."
Ability to Grow
Automation helps businesses handle more orders without adding staff. This scalability is key for growth:
- Process higher order volumes efficiently
- Expand product lines without operational hurdles
- Enter new markets with ease
Manuel de la Cruz, CEO at Boie, noted:
"ShipBob offers fast order processing, which is important when we’re getting hundreds of orders each day. We wouldn’t be able to fulfill the volume we’ve seen — up to nearly 13,000 orders per month — on our own."
How to Set Up Order Automation
Setting up order automation can help your business process orders faster and more accurately. Here’s how to get started:
Check Current Methods
Begin by looking at how you handle orders now. Find steps that take too long or cause mistakes. For example, manual data entry often leads to errors.
A McKinsey report found that automating order management can cut processing time from 2-3 days to just 1-2 hours. This shows the big impact automation can have.
Pick the Right Tools
Choose software that fits your needs and works with your current systems. Look for these key features:
| Feature | Benefit |
|---|---|
| Integration | Connects with your sales channels and inventory |
| Real-time updates | Keeps stock levels accurate |
| Customization | Adapts to your specific workflow |
| Scalability | Grows with your business |
For instance, Jotform offers over 10,000 customizable online form templates to help automate various parts of order management.
Add Automation Step by Step
Don’t try to change everything at once. Start small and build up. Here’s an example approach:
1. Automate order capture
Set up online forms or integrate with your e-commerce platform to automatically collect order details.
2. Link inventory management
Connect your order system with inventory to update stock levels in real-time.
3. Streamline shipping
Automate carrier selection and label printing based on order details.
Train Staff for New Methods
Make sure your team knows how to use the new system. Offer hands-on training and create clear guides. This helps everyone adapt to the changes and use the tools correctly.
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Key Features of Good Automation Systems
A good order processing automation system can make a big difference in how well a business runs. Here are the main features to look for:
Up-to-Date Stock Information
Keeping track of what’s in stock is key. Real-time inventory tracking helps businesses:
- Avoid selling items that aren’t available
- Know when to reorder products
- See which items sell best
For example, ShipBob’s system lets companies split inventory across locations. This helps them figure out which products do well in different areas.
"ShipBob’s analytics tool is a game-changer and it’s helped me grow my business tremendously." – Courtney Lee, founder of Prymal
Handling Orders from Many Sources
A good system can take orders from different places like:
- Online stores
- Marketplaces (Amazon, eBay)
- Physical shops
This means all orders end up in one place, making them easier to manage.
Smart Order Routing
This feature helps decide the best way to send out each order. It can:
- Pick the closest warehouse to the customer
- Choose locations with enough stock
- Save on shipping costs
Automatic Payment Handling
Dealing with payments can be tricky. Automation helps by:
- Processing payments quickly
- Reducing mistakes in handling money
- Keeping payment info safe
Working with Shipping Partners
Good systems connect with shipping companies. This makes sending out orders smoother by:
- Printing shipping labels automatically
- Updating tracking info for customers
- Choosing the best shipping method for each order
"Now, we’re working with a tech-enabled 3PL that seamlessly provides data to help us make business decisions." – Courtney Lee, founder of Prymal
Solving Common Automation Problems
Switching to automated order processing can be tricky. Here are some common issues and how to fix them:
When People Don’t Want Change
Staff might resist new systems. To help:
- Explain why the change is needed
- Get key team members on board early
- Start small and build up
A study by Towers Watson found that companies good at managing change are 3.5 times more likely to do well.
"Change can be tough, but it’s very important for success in today’s business world." – Owen McGab Enaohwo, Author
Moving and Connecting Data
Linking old data with new systems can be hard. Here’s what to do:
- Clean up data before moving it
- Use tools that can handle different data types
- Test thoroughly before going live
| Common Data Issues | Solutions |
|---|---|
| Messy data | Clean and standardize |
| Different formats | Use integration tools |
| Security concerns | Encrypt sensitive info |
Mixing Automation with Human Work
Don’t remove humans completely. Keep a balance:
- Let machines handle routine tasks
- Have people deal with complex issues
- Train staff to work with new systems
Keeping Data Safe and Following Rules
Protect customer info and follow laws:
- Use strong encryption
- Set up access controls
- Stay up-to-date with data laws
"With effective change management, you can introduce new processes without disrupting your team or organization." – Asana Professional Services Team
Checking Progress and Making Improvements
To make sure your order automation system works well, you need to keep an eye on it and make it better over time. Here’s how:
Important Numbers to Watch
Track these key performance indicators (KPIs) to see how well your automated order processing is doing:
| KPI | What It Measures | Why It’s Important |
|---|---|---|
| Order Cycle Time | Time from order to delivery | Shows speed and efficiency |
| Order Fill Rate | % of orders shipped in full and on time | Indicates reliability |
| Order Accuracy Rate | % of orders without errors | Reflects quality control |
| Cost per Order | Total fulfillment costs / Number of orders | Helps control expenses |
| On-time Shipping Rate | % of orders shipped on schedule | Shows punctuality |
Using Data to Get Better
Look at your KPI data often to spot trends and fix issues:
1. Find problem areas:
If your order cycle time is too long, look for bottlenecks in your process. Maybe you need to speed up picking or packing.
2. Set goals:
Aim for a 90% perfect order rate. This means only 10% of orders have issues.
3. Compare with others:
See how you stack up against similar businesses. If they’re doing better, learn from them.
Keep Making Small Changes
Don’t try to fix everything at once. Make small, steady improvements:
- Test new ideas: Try out different picking methods or packing stations to see what works best.
- Ask for feedback: Talk to your team and customers. They might spot issues you’ve missed.
- Update regularly: Keep your software up-to-date to take advantage of new features.
"By using these KPIs and metrics, you can monitor and improve your order processing and fulfillment performance, and achieve your logistics management goals." – Logistics Expert
What’s Next for Order Automation
Order automation is changing fast. Let’s look at what’s coming:
New Tools Coming Soon
Blockchain and IoT are set to change how orders are handled:
- Blockchain: Makes order tracking more secure and clear.
- IoT: Helps track products from factory to customer.
Amazon is already using IoT in its warehouses. Their robots can find and move items quickly, cutting order processing time by 50%.
Guessing What Customers Want
AI is getting better at predicting what customers will buy:
- Looks at past orders
- Checks social media trends
- Watches weather forecasts
Zappos uses AI to guess shoe sizes. This cut returns by 10% in 2022.
Making Orders More Personal
Companies are using data to tailor orders:
| Personalization Type | How It Works | Result |
|---|---|---|
| Custom Products | Ask customers questions | BarkBox makes 120,000 different boxes each month |
| Smart Recommendations | Use order history | Amazon sees 44% of customers buy recommended items |
| Tailored Communication | Send personalized emails | L’Oréal’s Color&Co matches hair dye to each customer |
"Consumers don’t just want personalization, they demand it. With store and product loyalty more elusive, getting it right matters." – McKinsey
To stay ahead, businesses should:
- Keep an eye on new tech like blockchain and IoT
- Use AI to predict customer needs
- Find ways to make each order feel personal
Real Examples
Let’s look at how companies have put order processing automation into action and what we can learn from them.
Success Stories
1. Decathlon UK: Sports retailer Decathlon improved its order processing at its Northampton logistics center.
- Handles 3,000 online orders daily
- Uses picking shelves from Mecalux Group
- Serves both online shoppers and retail stores
Zsolt Kabai, Project Manager at Decathlon UK, noted: "The shelving’s high quality and distribution have meant a serious increase in our picking productivity."
2. Motocard: This Spanish motorcycle gear retailer overhauled its supply chain to handle more online sales.
- Manages 15,000 items
- Fills 900 orders per day (40% online, 60% in-store)
- Implemented Easy WMS for better management
Jordi Colilles, Digital Director of Motocard, shared: "With Easy WMS, we’ve streamlined all our processes. Consequently, 90% of items ordered before noon are dispatched that same day."
3. SAM Outillage: This French tool manufacturer automated its order management system.
- Uses a mini-load system and Easy WMS
- Ensures product deliveries within 24 hours for orders received before 4:00 p.m.
- Increased productivity by 25%
Candice Aubert, Logistics Manager at SAM Outillage, stated: "The automated warehouse from Mecalux has helped raise our productivity by 25%."
4. APD Schlauchtechnik: This company worked with Workist to automate order entry.
- Processes 650 documents automatically per month
- Achieved 100% extraction rate for document data
- Freed up staff for growth-focused tasks
Sebastian Anders, Executive Assistant to the Management Board, explained: "The result was that capacities could be freed up and redirected towards addressing sustained growth and expanding our consulting service."
What We Can Learn
- Integrate systems: Connecting order processing with other business systems (like warehouse management) can boost efficiency.
- Focus on speed: Fast order processing leads to quicker dispatches, improving customer satisfaction.
- Measure improvements: Track key metrics like productivity increase or time saved to show the value of automation.
- Free up staff: Use automation to move employees from data entry to more valuable tasks.
- Choose flexible solutions: Look for tools that can adapt to your specific needs and grow with your business.
Wrap-Up
Order processing automation is no longer a luxury—it’s a must for businesses aiming to stay competitive. By streamlining operations, companies can boost efficiency and improve customer satisfaction.
Key takeaways:
- Time savings: Automation cuts order processing time from days to hours. For example, some businesses have reduced processing time from 2-3 days to just 1-2 hours.
- Cost reduction: Companies can expect to see a 10-15% decrease in costs after implementing automation.
- Accuracy boost: Automated systems can achieve a 99.7% accuracy rate, minimizing errors and returns.
- Future-ready: By 2025, about 70% of organizations are expected to use structured automation in their processes.
To get started with order automation:
- Analyze your current processes
- Choose the right tools for your needs
- Implement changes gradually
- Train your team on new systems
Remember, the goal is to free up your staff from manual tasks so they can focus on growth and customer service. As Sebastian Anders from APD Schlauchtechnik noted after automating their order entry:
"The result was that capacities could be freed up and redirected towards addressing sustained growth and expanding our consulting service."