Order routing
Order routing is the logic that decides which location fulfills each order, based on rules such as stock, distance, cost or capacity, and reroutes it if conditions change.
Definition
Order routing decides which location in a fulfillment network fulfills an order. An Order Management System (OMS) compares warehouses, stores and suppliers and picks the best option based on stock, distance, cost, capacity and the delivery promise. This happens automatically and in real time, within seconds of the order being placed.
How order routing works
Routing follows a routing strategy, a set of rules that reflects the retailer’s priorities:
- Fences: requirements a location must meet, such as having all items in stock or shipping before the cutoff time.
- Ratings: rankings of the remaining locations, for example by distance, shipping cost or workload.
The location that passes all fences and scores best receives the order.
Rerouting and order splitting
If conditions change, for example a store runs out of stock or a location is overloaded, rerouting runs the strategy again, manually or automatically. If no single location can fulfill the whole order, it’s split across several locations. If none meets the requirements, the order is marked as unroutable.
Benefits for retailers
- Lower fulfillment costs: orders ship from the location with the lowest cost to serve.
- Faster delivery: the closest suitable location fulfills the order.
- Fewer cancellations: orders only go where stock is available.
- Better use of the store network: stores become fulfillment locations.
Rule-based vs. agentic routing
Classic routing follows fixed rules. In an Agentic Order Management System, AI agents turn goals such as cost, speed and margin into routing decisions and adjust them as conditions change. In fulfillmenttools, this is covered by Advanced Order Routing and the Order Routing Agent.