Enhanced Order Processing and Exception Handling

The Strategic Impact of Automation

Efficient order processing and exception handling procedures are crucial to maintaining competitive advantage and customer satisfaction. With rising consumer expectations for quick service and flawless execution, automating these processes has become a strategic priority. This detailed guide explores the value automation brings to order processing and exception handling, offering insights into its implementation and benefits to retail operations.

Understanding Order Processing and Exception Handling

The Foundations of Retail Efficiency

Order processing and exception handling are fundamental components of a robust retail operation. They ensure that from the moment a customer places an order to the point of delivery — and in every exceptional scenario in between — the retailer has a smooth, efficient workflow.

Order Processing. This encompasses the entire sequence from order entry through picking and packing to shipping and delivery. It is the workflow that fulfills customer demands.

Exception Handling. This covers the procedures for managing deviations from the normal order processing flow - including stock shortages, payment issues, or shipping errors - which require immediate attention to preserve service quality and operational continuity.

Traditional Management Techniques

Current Practices and Areas for Improvement

Retail businesses manage order processing and exception handling through manual entries and semi-automated systems. These tasks are typically divided among customer service teams, logistics staff, and operations managers, who rely heavily on traditional tools like spreadsheets and email communications.

This traditional approach affects workload. A report by McKinsey suggests that employees spend around 30% of their time managing email alone, which involves communications related to order and exception management. In addition to being time-consuming, these manual processes are prone to errors that can affect your bottom line and customer satisfaction.

Real-World Examples in Traditional Order Processing and Exception Handling

Example 1: A Boutique Clothing Retailer

Company Profile. A mid-sized boutique clothing retailer with online and brick-and-mortar operations based in Chicago.

Order Processing Practices. Store staff members manually enter online orders into an inventory management system. Each order is then physically checked for item availability, which can lead to delays or errors in updating stock levels.

Exception Handling Practices. When stock discrepancies occur (e.g., an item sold online that is no longer available in-store), the customer service team manually contacts the customer via email to offer alternatives or a refund. This process relies heavily on the responsiveness of individual team members and often leads to customer dissatisfaction due to delayed communication.

Challenges. This manual system requires significant labor hours for data entry and customer interaction, which increases operational costs and limits the ability to scale efficiently. The lack of real-time data integration often results in stock-outs and order cancellations, which damages customer trust and brand reputation.

Example 2: A Large Online Electronics Marketplace

Company Profile. A major online retailer specializing in consumer electronics with a global customer base.

Order Processing Practices. The company uses a semi-automated system in which orders are automatically pulled into its Order Management System (OMS) from various sales platforms. Inventory synchronization is handled through an integrated system that updates real-time stock levels across all channels.

Exception Handling Practices. Exception handling is partly automated. The system automatically flags orders that cannot be fulfilled due to inventory issues or credit card payment failures. Customer service agents are then alerted to handle these exceptions through predefined workflows, which include contacting customers and resolving payment issues.

Challenges. While the automation of data entry and stock synchronization reduces errors, reliance on manual intervention for resolving exceptions can still delay order processing. Additionally, the need for customer service agents to manually step in and manage these issues increases the workload and potentially affects the customer experience during peak times.

Comparing Manual and Automated Approaches

While manual systems have been the backbone of many retail operations, there is undeniable competitive pressure to make your processes faster and more accurate. 

Manual System Challenges

• High error rates due to manual data entry
• Significant time spent on repetitive tasks
• Inability to scale efficiently as business volume grows

Advantages of Automation

• Operational cost reductions from minimizing manual labor and streamlining processes
• Accuracy enhancements and lower error rates in order processing
• Real-time data that helps in making informed decisions quickly

Opportunities for Automation in Retail

Automation can transform every aspect of order processing and exception handling by improving efficiency and precision. Key areas for automation include the following:

Automated Order Entry. Utilizing AI and machine learning to input data directly into order management systems reduces errors and accelerates processing.

Real-Time Inventory Management. Integrating sales channels with inventory data enables instant stock-level updates, preventing order fulfillment issues.

Smart Exception Alerts. These systems automatically flag discrepancies, and corrective measures are triggered without human intervention.

Making the Business Case for Automation

The transition to automated systems is supported by a compelling business case that highlights significant operational and strategic benefits:

Operational Cost Reduction. According to PwC, automation can cut operational expenses related to order processing by up to 40% by reducing the need for manual labor and decreasing the incidence of errors.

Scalability and Flexibility. Automated systems are highly scalable, allowing businesses to handle increased order volumes without proportionate staffing or manual workload increases.

Enhanced Customer Experience. Automation significantly improves customer satisfaction and loyalty by ensuring accurate, timely order processing and proactive exception handling.

Future-Proofing Retail Operations

As retail continues to evolve, integrating automated processes in order processing and exception handling stands out as a crucial strategy for future-proofing business operations. Automation not only brings substantial cost savings and operational efficiencies, but it also enhances the overall customer experience, paving the way for sustained business growth and success.

Rivet Enhances Automated Order Processing and Exception Handling

Rivet, Traverse Systems’ business process automation solution, combines software and professional services to assist in automating your order processing and exception handling activities. It streamlines communication and increases your efficiency by introducing industry-standard practices to your

• Over, short and damaged items (OS&Ds)
• Return to vendor items (RTVs)
• Trouble Processing
• Purchase Order (PO) Expedite Processing

Rivet incorporates and accommodates your existing documents, data, and, where desired, data repositories and applications. It gives you complete visibility into your order and exceptions processes, including:

• Who is working on resolving the issue
• What stage of the process the order is in
• How long the resolution process has been underway

Riven eliminates the bottlenecks associated with manual input through the seamless handling of order prioritization, accuracy assurance and exceptions management. It automatically alerts appropriate personnel of erroneous, incomplete, or late tasks. And its customizable dashboards give you visibility into the status of processes, risk exposure, and the need for action.