Direct answer. The OMS (Order Management System) is software that centralizes and orchestrates the lifecycle of a customer order, from its creation on an e-commerce site, a marketplace or in-store, through to delivery, deciding in particular from which warehouse or point of sale it should be shipped.
The conductor of multichannel orders
The OMS has grown in importance with the proliferation of sales channels (website, marketplaces, physical stores, social media) and delivery options (in-store pickup, shipping from a warehouse or from a store). Its core function is to provide unified visibility over available stock, regardless of its physical location, and to automatically decide where an order should ship from to be delivered at the best cost and within the best lead time. An order can thus be split between several shipping sources if an item is only available in two different locations.
The OMS sits upstream of the WMS in the software chain: it decides which order ships from which site, while the WMS then manages the physical execution (picking, packing, shipping) once the order has been passed to it. It also differs from the ERP, which manages order data at a more global level (invoicing, accounting) without necessarily arbitrating in real time between several available stock sources for the same order. Finally, it acts as a buffer between sales channels and execution systems: it is often the OMS that centralizes the tracking visible to the customer, from payment through to delivery confirmation.
Not every company needs a dedicated OMS: a single-channel business with one warehouse can make do with the order module of its ERP or WMS. The OMS becomes useful once a company sells across several channels and has several stock points to arbitrate between, a configuration that is increasingly common with the growth of click and collect and store-based delivery.
FAQ
What is the difference between an OMS and a WMS?
The OMS decides where an order should be shipped from among several possible stock sources (warehouses, stores). The WMS takes over once that decision is made: it manages the physical execution of picking at the relevant warehouse, through to actual shipment.
Why does an e-commerce business need an OMS?
As soon as it sells across multiple channels (website, marketplace, store) with several stock points, an e-commerce business needs an OMS to get a unified view of available stock and route each order to the most relevant source, with no apparent disruption for the customer.
Related terms
WMS · ERP · TMS · WCS · Track & trace · Interoperability.
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