Feb 16, 2023 | Blog
As a business owner, you are faced with many challenging growth stages. But when using a 3PL with an inventory management system, logistics doesn’t have to be one of them. Streamline your supply chain and boost your business success with inventory optimization through a 3PL provider. As customer demands and expectations skyrocket, it is costly to be left with long stockouts or delays in shipping. Say goodbye to stock shortages and forecast errors, and hello to real-time visibility, cost savings, and expert support when partnering with an expert 3PL. In this article, we will cover the power of a 3PL inventory system and how it can take your business to the next level!
What is Third-Party Logistics (3PL)?
Third-party logistics (3PL) is an outsourcing solution for companies to handle their supply chain and logistics operations. Instead of managing storage, transportation, and delivery in-house, a company can work with a 3PL provider to handle these tasks for them. And because providers offer logistical infrastructure as a product, you can utilize their expertise, technology, and resources to handle any logistical needs you might have. This means you save money, improve your supply chain efficiency, and have more time to focus on core business activities!
What is a 3PL Inventory Management System?
Inventory management software is a solution used by third-party logistics providers to manage the storage, movement, and tracking of inventory across fulfillment centers for their clients. The system helps 3PLs to efficiently track inventory levels, manage stock movements, generate reports, improve forecast accuracy, and provide real-time data to clients. With this software, you gain inventory management visibility and get your logistics operational challenges streamlined. You’ll also likely see a reduction in manual errors, and improved accuracy of inventory data.
How Does 3PL Software Help eCommerce Businesses?
Cost Reduction
3PL software can help eCommerce businesses to reduce costs by streamlining operations, reducing forecast errors, and improving efficiency. By outsourcing logistics operations to a 3PL provider, eCommerce businesses can also reduce the need for in-house logistics staff and infrastructure. An example of this would be an eCommerce business that can use 3PL software to automate order fulfillment processes, reducing manual labor and the risk of errors. Plus, because they ship in bulk 3PLs can get negotiated pricing and reduce your shipping costs as well!
Increased Transparency
Real-time data from 3PL software provides visibility into inventory tracking, delivery status, and other logistics operations. This increased transparency helps eCommerce businesses make informed decisions and avoid stockouts or overstocking. As an example, an eCommerce business could access real-time data on their inventory across fulfillment centers and delivery status through 3PL software, enabling them to make informed decisions and provide better service to eCommerce customers.
Customer Experience
By outsourcing logistics operations to a 3PL provider, eCommerce businesses can focus on improving their customer experience. This software can help to streamline delivery processes, reduce shipping times, and provide accurate tracking information to customers. Meaning, an eCommerce business could use 3PL software to track delivery times, monitor shipping, provide more shipping options, and provide eCommerce customers with real-time updates on their orders.
Real-Time Visibility
3PL software provides real-time data on inventory levels, shipping status, and other key metrics. This way an eCommerce business can use 3PL software to track inventory optimization and inventory needs in real-time, enabling them to quickly respond to changes in demand and avoid stockouts.
Scalability
Software that offers the above benefits also allows for scalability because of the additional technological resources which speed up workflows. Then if a company also outsources logistics operations to a 3PL provider, eCommerce businesses can focus on their core business activities, while their 3PL handles the logistics. This way they have access to additional inventory storage space, delivery vehicles, and shipping options, which are all assets that the business itself didn’t need to purchase.
3PL Inventory Management Services and Benefits
Third-party logistics (3PL) inventory management services offer several key benefits for both off and online businesses. One of the main benefits is cost savings, as outsourcing logistics operations to a 3PL provider can reduce the need for in-house logistics staff and infrastructure. Another benefit is improved efficiency, as 3PLs use specialized software and technology to streamline operations, reduce manual errors, and improve forecast accuracy. With real-time data and visibility into inventory levels, delivery status, and other logistics operations, 3PL inventory management services can also increase transparency and help businesses make informed decisions. By outsourcing logistics operations, businesses can also focus on their core activities and improve their customer experience by providing faster and more accurate shipping information. Additionally, 3PLs can help online businesses to scale their business operations by providing access to additional resources and technology.
What are the Core Competencies 3PLs Provide?
3PLs provide a range of core competencies to their clients, including:
- Storage and warehousing: A 3PL warehouse offers inventory storage solutions for inventory and raw materials, handling the management and organization of these items.
- Transportation and delivery: 3PLs handle the transportation of goods, including pick-up, delivery, more shipping options, and tracking of shipments.
- Order fulfillment: 3PLs manage the process of picking, packing, and shipping orders to customers.
- Supply chain management: 3PLs help to optimize supply chain operations by providing real-time data and visibility into inventory levels, delivery status, and other logistics operations.
- Technology and innovation: 3PLs use specialized software and technology to streamline operations, reduce forecast errors, and improve accuracy.
- Cost optimization: 3PLs help to reduce costs by optimizing logistics operations and providing access to additional resources and technology.
- Customer service: 3PLs provide support to customers by handling inquiries, tracking shipments, and providing real-time updates on orders.
What is the Difference Between a 1PL, 3PL, and 4PL?
A 1PL refers to a company that handles its own logistics operations in-house. This includes storage, transportation, and order fulfillment processes. An example of a 1PL is a retail store that manages its own shipping and delivery operations. Think of Walmart which manages its own storage, transportation, and order fulfillment, or Apple, which manages its own shipping and delivery operations. The primary benefit of a 1PL is that the company has complete control over its logistics operations and can ensure that its processes align with its business objectives.
A 3PL refers to a logistics company that provides logistics services to other businesses. This includes storage space, transportation, and order fulfillment processes. The primary benefits of a 3PL warehouse are cost savings and increased efficiency. By outsourcing logistics operations to a 3PL, businesses can reduce the need for in-house logistics staff and infrastructure, and benefit from the 3PL’s specialized software and technology.
A 4PL refers to a logistics company that acts as a logistics integrator, coordinating and managing the logistics operations of multiple 3PLs. An example of a 4PL is Accenture, which provides logistics management services and integrates the operations of multiple 3PLs. As an example look to DHL supply chain who provides logistics management services and integrates the operations of multiple 3PLs for their clients. The primary benefits of a 4PL are improved supply chain visibility and coordination. By integrating multiple 3PLs, a 4PL can provide inventory optimization, delivery status, and other logistics operations, helping businesses to make informed decisions and optimize their supply chain operations.
Other Than Order Fulfillment, How Else Can a 3PL Help My Business?
3PLs aren’t just there to help you store and ship your inventory. They offer a wide range of other benefits as well. Let’s review a few.
Professional Services and Knowledge
3PLs bring a wealth of professional services and knowledge to the table, including expertise in transportation, storage, and supply chain management. By outsourcing to a 3PL, businesses can benefit from their experience and expertise, ensuring that their logistics operations are handled efficiently and effectively.
Cost Savings for Sellers
When you reduce the need for logistics staff and infrastructure, you save money. Logistical infrastructure is expensive, constantly changing, hard to maintain, and there is continually new technology available to utilize. If you let a 3PL take on that cost and pay them a flat monthly fee instead, you can then reinvest that money back into your own business.
Inventory Management
With the software a 3PL warehouse provides, this will likely include advanced inventory management services, including real-time visibility into inventory levels, demand forecasting, and safety stock management. Through software and dedicated staff, you can be sure their inventory is in safe hands and know they won’t overstock or understock.
Expertise
3PLs bring specialized expertise to the table, including knowledge of transportation and delivery, customs regulations, and compliance requirements. By outsourcing to a 3PL, businesses can benefit from their expertise, ensuring that their logistics operations are handled efficiently and effectively.
Business-to-Consumer Fulfillment (B2C)
When working with a B2C business, 3PL companies offer several services which are key to their success. This includes end-to-end fulfillment services, including order management, picking, packing, and shipping. This means a business-to-customer company knows its product will reach their customer quickly and intact.
Business-to-Business Fulfillment (B2B)
3PLs provide fulfillment services for B2B businesses, including order management, improving logistics efficiency, picking, packing, and shipping. B2B businesses can then ensure that they can rent more or less warehouse space as needed so their products can be found in stores across the nation.
How to Find the Best 3PL for Your Business
All this is good, but as a business owner how do I find the best 3PL for my business anyways? There are so many options. How do I know which is the best one?
Research the different 3PL warehouse providers and their offerings, and ask for recommendations from other businesses in your industry. Attend trade shows and conferences to network with 3PL providers and gain a deeper understanding of their services. Reach out to industry associations and trade organizations, such as the National Retail Federation or the Council of Supply Chain Management Professionals.
Develop a detailed RFP and send it to several 3PL providers, asking for proposals and pricing quotes. This will allow you to compare the services and costs of different providers and make an informed decision. Send out an RFP to a select group of 3PLs, such as UPS Supply Chain Solutions, ShipHero, FedEx Supply Chain, or DHL Supply Chain.
Schedule on-site visits to the 3PL facilities you are considering. This will allow you to assess the provider’s operations and processes firsthand and ensure that they have the capacity and capabilities to meet your needs. Schedule visits to 3PL facilities, such as the Amazon Supply Chain fulfillment centers or a ShipHero warehouse. That way you can see the warehouse space and understand exactly how your inventory will be managed.
Contact references provided by the 3PL provider and ask about their experience working with the provider. This will give you valuable insight into the provider’s performance and reliability. Reach out to companies that have used the services of the 3PL you are considering, such as companies that have used the fulfillment services of ShipHero or Flexe.
Want to chat with an expert? ShipHero to the rescue!
Key Takeaways
Inventory management visibility is a huge key to your success as an eCommerce business. You can maximize your profitability and customer satisfaction with a 3PL and its inventory system software! Not only are they an expert in their industry, but when peak season comes around, they’ve got you covered. When you partner with a reliable 3PL provider to streamline your inventory management, and increase transparency, you’ll take your business operations to new heights.
Inventory Management + 3PL FAQs
What Is the Biggest 3PL Company?
The biggest third-party logistics company is DHL Supply Chain, a subsidiary of the German multinational courier delivery services company Deutsche Post DHL Group.
What Is Meant by Inventory Management?
Inventory management refers to the process of overseeing and controlling the movement of goods, including their storage, stock levels, and delivery to customers. The goal of inventory management is to ensure that a business has the right amount of inventory in the right place at the right time, while minimizing the costs associated with storage space and carrying excess inventory. The goal of these common strategies is to help both off and online businesses reduce stock shortages, lower carrying costs, improve customer satisfaction, and increase profitability.
What Is Logistics Inventory Management?
Logistics inventory management is a subset of inventory management that focuses on the coordination of the physical flow of goods, information, and financial transactions within a supply chain. This involves overseeing the storage, handling, and transportation of goods from the manufacturer to the end customer, ensuring that the right amount of inventory is available at the right time and place. The goal of logistics inventory management is to optimize the efficiency and cost-effectiveness of the supply chain while meeting customer demands and improving overall business performance.
Feb 16, 2023 | Blog
Running an e-commerce business or a retail operation is no easy feat.
From managing inventory to fulfilling orders, the logistics involved can be overwhelming and time-consuming. But what if we told you that there’s a way to streamline your logistics operations and take back control?
With third-party order management, you can do just that. It’s the ultimate solution for businesses looking to improve their logistics efficiency and customer satisfaction. But what exactly is 3PL order management and how does it work?
What is 3PL Order Management?
3PL Order Management is a game-changer for businesses looking to level up their logistics. It is the process of managing customer orders from the point of sale to delivery and involves a wide range of tasks, including receiving orders, processing them, picking and packing products, and shipping them to customers. It’s a powerful solution that streamlines and automates order fulfillment and removes many manual processes other companies can be stuck in today. This means while your 3PL partner handles order management, you can focus on growing your business. With 3PL order management, you can kiss logistics stress goodbye and say hello to streamlined, efficient, and profitable operations.
How Does 3PL Order Management Work?
Let’s say that John runs an eCommerce business that sells outdoor gear. His business has been growing rapidly, and he’s finding it difficult to keep up with the logistics and distribution side of things. So, he decides to work with a 3PL provider to handle his order management. Once John’s 3PL provider receives an order from his online store, the order is automatically imported into the provider’s order management system. The system checks the inventory levels to make sure that the items are available, and then assigns the order to a picker.
The picker goes to the warehouse and uses a barcode scanner to locate and pick the items specified in the order. Once the items are picked, they are taken to the packing station, where they are packaged and prepared for shipment. The 3PL provider then creates a shipping label and invoice for the order, and ships the package to the customer. Along with that, the provider notifies the customer of their order status and tracking information so they can follow the package on its way to them.
In the meantime, the 3PL provider also updates John’s inventory levels in real-time, so he can see exactly how many products he has in stock. They reorder items as needed to ensure that John’s inventory doesn’t empty. And they give him reports on which products sell and which products are stagnant.
This is the beauty of order management. Thanks to 3PL’s expertise and technology, the provider handled the order process efficiently, making sure that the customer received their package on time and that John looked like a rockstar!
Features of 3PL Order Management
Third-party logistics order management systems offer a plethora of features that make them a popular choice for businesses looking to streamline their logistics and supply chain operations.
- Real-time inventory management, businesses to have clear visibility into inventory levels, allowing them to make informed decisions.
- Automated order processing, multi-channel integration, and customizable workflows enable businesses to optimize their logistics processes, improving efficiency and reducing costs.
- Reporting and analytics tools are included to provide businesses with insights into their logistics operations, helping them identify areas for improvement.
3PL order management systems are also scalable, adapting to the changing needs of the business, making them an ideal choice for businesses looking to scale up or down.
Order Management Services Provided by a 3PL
Now that you understand how order management works, let’s dive into the specific order management services which are offered by many 3PLs.
Warehouse Storage
Warehouse storage services are typically a key offering from your potential 3Pl provider. This means they own and operate a warehouse where they store and manage their clients’ inventory. They handle all the receiving, storing, maintaining accurate inventory counts, and organization within this warehouse.
Inventory Distribution
For a 3PL it is key to manage the flow of products from the warehouse to your customers. They will often distribute your inventory between multiple warehouses so they offer faster delivery no matter where your customer is located. This includes managing the shipping and handling of products, as well as providing tracking information and delivery updates to customers.
Inventory Management
Whether it is something you can integrate with or not, most providers use inventory management software to track stock levels. This ensures that the necessary items are available to fulfill orders. If this software can integrate into your online store, it will likely automatically update stock levels as orders are placed. This benefit is a large reason why you want to find a 3PL partner who also has a software offering.
Picking and Packing
Once an order is placed, the 3PL provider’s team will pick the items from the warehouse shelves, using barcode scanning or other identification methods to ensure that they are picking the correct items and quantities. Once the items are picked, they are packed and prepared for shipment. Many top-tier 3PL use robots and automated conveyor belts to reduce human error and speed up the efficiency of this process.
Shipment Tracing and Tracking
Most 3PL providers also handle the shipping and tracking of orders. They create shipping labels, track packages and provide tracking information to the customer so they can follow the package on its way to them. This level of tracking and visibility often offers a large boost to customer satisfaction.
Reverse Logistics
When a customer initiates a return, the 3PL provider will typically receive the returned product and inspect it to make sure it is in good condition. If there is an issue with the product, the 3PL provider will contact the customer to resolve it. Once the return is approved, the 3PL provider will then process the return by updating the inventory, and if necessary, restocking the product. They will also refund the customer or issue a store credit, depending on the customer’s preference and the store’s return policy. If needed, they can often handle the process of disposing or refurbishing the products that can’t be sold again within the compliance of any relevant regulations.
Need the services of a 3PL? ShipHero to the rescue!
Benefits of Letting a 3PL Manage Orders
With an understanding of exactly what is available, you are now armed and dangerous when it comes to sourcing and picking out a 3PL that enhances your business. Here are a few benefits you’ll experience with a strategic 3PL provider in your corner.
Integration Throughout the Supply Chain
By letting a 3PL provider manage orders, businesses can integrate their logistics operations with the rest of their supply chain, which can improve efficiency and reduce costs. This integration can also help to improve inventory management and forecasting, allowing businesses to make better decisions about their supply chain.
Cross Platform Fulfillment
3PL providers can handle orders from multiple sales channels such as e-commerce platforms, marketplaces, and brick-and-mortar stores, allowing businesses to manage orders from multiple sources in one place. This means anywhere you sell from, your orders will be processed in one place so now you have visibility into your entire inventory and orders within one location.
Greater Customer Experiences
In today’s world, the customer experience is key. That’s because a happy customer is a returning customer. When it comes to shipping a customer favorite is the ability for the customer to track their order as it works its way through your 3PL provider’s processes. Plus, you know the 3PL is motivated to get their order to their doorstep quickly and efficiently because they likely have contracted KPIs to do so.
Fast and Efficient Pick and Pack
When advanced automation and robotics are put in place within the picking and packing process, the error becomes greatly reduced. This means that not only do your customers get their orders faster, but you also pay less for it to be shipped out. Especially if your 3PL provider is continually enhancing their warehouse operations with the newest technology.
Enhanced Inventory Visibility
With real-time inventory management, businesses have clear visibility into inventory levels, allowing them to make informed decisions. This can help to reduce stockouts and improve inventory forecasting.
Reliable Order Fulfillment
We’ve already talked about a reduction of human error. When 3PL providers have the resources, technology, and expertise to handle the logistics and distribution side of things, it means you and your customer experience more reliable order fulfillment.
Key Takeaways
Third-party logistics order management is an efficient and cost-effective solution for businesses looking to streamline their logistics operations, manage inventory, and fulfill orders. Their strategic knowledge gives you a competitive advantage and amplifies your business. It is a comprehensive service that covers all aspects of logistics management, including receiving orders, processing them, picking and packing products, and shipping them to customers. Plus with real-time inventory management, automated order processing, multi-channel integration, and reporting and analytics tools, businesses now have the knowledge to make more informed decisions more quickly. This allows businesses to focus on growth while leaving the logistical order management process to the experts.
3PL Order Management FAQs
What Are the Three Types of 3PL Providers?
Third-party logistics (3PL) providers come in three main types:
- Traditional 3PL: These providers offer a wide range of services, including transportation, warehousing, and distribution. They typically handle the entire logistics process, from receiving products at the warehouse to delivering them to customers.
- Asset-Based 3PL: These providers own and operate their own transportation assets such as trucks, ships and planes. They are specialized in the transportation and logistics of goods and usually handle the delivery and transportation process of the products.
- Niche 3PL: These providers specialize in a specific aspect of logistics, such as hazardous materials handling or temperature-controlled transportation. They are experts in their specific field and provide specialized services to businesses that require it.
What Is the Difference Between 3PL & 4PL?
Third-Party Logistics (3PL) and Fourth-Party Logistics (4PL) are both service providers that assist businesses with logistics and supply chain operations, but they differ in their scope and level of services provided.
3PL providers are responsible for handling specific logistics functions, such as transportation, warehousing, and distribution. They typically handle the entire logistics process, from receiving products at the warehouse to delivering them to customers. They own the resources, technology and expertise to manage the logistics process.
4PL providers act as an integrator that assembles and manages the resources, capabilities, and technology of multiple 3PLs, transportation companies, and other service providers to create a comprehensive logistics solution for the customer. They are often referred to as “logistics integrators” or “lead logistics providers” and they act as the single point of contact for their clients, coordinating all logistics activities and managing all the other service providers involved. They don’t own resources but have the capability to manage them.
Feb 16, 2023 | Blog
What is a 3PL?
In today’s business landscape, where challenges abound, a Third-Party Logistics (3PL) partner serves as a skilled assistant for your operations. In the realm of ecommerce fulfillment and online commerce, having the right tools and 3PL systems is crucial. With the ascent of Ecommerce, the efficiency and technology provided by 3PLs have become indispensable. They specialize in logistics tasks such as warehousing, transportation, and inventory management, allowing businesses to focus on their strengths while leaving logistics to experts.
How Does a 3PL Work?
Consider “Fashion Avenue,” a growing retail clothing brand. As the business expands, owner Sarah faces logistics challenges. By partnering with a party logistics provider, a 3PL provider, she crafts a tailored plan encompassing warehousing, transportation, and inventory management. The 3PL oversees logistics, from receiving shipments to timely delivery. This empowers Sarah to focus on fashion curation while accessing real-time data for smooth operations.
Ecommerce Integration with 3PL
Integrating Ecommerce with a 3PL connects your online store with logistics services, facilitating information exchange. This integration enables:
- Directing online orders to the 3PL for prompt fulfillment.
- Reflecting real-time inventory updates on the store based on the 3PL’s stock.
- Generating shipping labels and providing tracking through the 3PL.
- Streamlining customer returns processing.
Integration depth varies by 3PL and eCommerce platform, with options like built-in integrations or API connections.
Dispelling 3PL Myths and Misconceptions
Several myths surround 3PLs:
- Expense Myth: 3PLs often save money through economies of scale and better shipping rates.
- Control Myth: 3PLs enhance rather than control your business; you retain inventory and customer relations control.
- Inventory Myth: Partnering with a 3PL provides visibility and control through real-time data.
- Capability Myth: 3PLs offer varied services, including order fulfillment, reverse logistics, and eCommerce integration.
Differentiating Between 3PL Logistics Partners and Brokers
While a 3PL offers comprehensive tailored solutions, a Broker connects shippers and carriers, offering less control. A 3PL handles intricate technology and tasks, with an advanced 4PL providing higher-level supply chain management.
Industries Relying on 3PL Logistics Partners
Sectors such as e-commerce, retail, healthcare, and automotive trust 3PLs. In the online sales landscape, efficient storage and logistics are crucial. Retailers and ecommerce websites can benefit from 3PL services, including specialized packaging options.
Managing Your 3PL Logistics Partner
Effective management involves clear communication, performance monitoring, and understanding customer orders and product needs. 3PL expertise is invaluable. Business needs and customer satisfaction are paramount.
Monitoring 3PL Partner Performance
Ensure optimal performance by employing Service Level Agreements (SLAs), Key Performance Indicators (KPIs), data reports, and audits. Strong partnerships, order management system and communication with your 3PL are vital.
The Power of Clear Visibility in Supply Chains
Supply chain visibility is a game-changer in today’s logistics landscape. It’s all about tracking products from start to finish. This real-time tracking helps companies make smart decisions, keep customers happy, and improve the way they work. When companies, third party logistics providers and 3PL partners team up, they can share data easily and keep the flow smooth.
New Ways to Ace the Last-Mile Delivery Game
Getting that last mile of delivery right is super important. New ideas like drone delivery, self-driving vehicles, and crowdshipping are rocking the last-mile scene. These innovations speed things up and make customers smile. Businesses teaming up with 3PL pros can use these cool ideas to make that last stretch even smoother.
Sustainability
From eco-friendly boxes to smarter routes, companies are finding Earth-friendly ways to ship stuff. When a business links up with a 3PL partner, they can work together to make the shipping and fulfillment process even kinder to the planet.
Expertly Navigating Global Logistics and Customs
When business goes global, things get tricky. International logistics and customs rules can feel like a maze. But teaming up with a 3PL whiz can help. They know the ropes, from duties to paperwork. With them on your side, global shipping becomes a breeze.
Smart Moves with Data Analytics and AI
Numbers and smart tech are changing the logistics game. Data and AI are like power-ups for entire supply chain. They help businesses know what customers want and find the best routes. Businesses working with 3PL pals can use these tools to make things run even smoother.
Outsmarting Disruptions with Smart Planning
In a wild world, being ready for surprises is key. That’s where risk management and contingency planning come in. They help businesses bounce back when things go wrong. Businesses that partner with 3PL pros can breathe easy. They’ve got backup plans and tricks up their sleeves to keep things moving.
Elevating Shopping Joy with Integrated Logistics
Ecommerce + 3PL = Happy Customers! When shopping is smooth, customers smile. That’s where the Ecommerce business and 3PL magic happens. Orders fly out faster, tracking is a breeze, and returns are a snap. When businesses and 3PL champs join forces, shoppers can’t help but grin.
Tomorrow’s Logistics: Trends to Watch
Logistics is changing fast, and tech is leading the charge. Think blockchain, IoT, and digital twins. These cool ideas make tracking and moving stuff even cooler. Businesses joining forces with other 3PL providers and trendsetters can ride the wave of change and stay ahead.
Building Strong Bonds with 3PL Partners
Great partnerships are gold. That’s true for businesses and their 3PL partners too. Clear talk, shared goals, and teamwork make things awesome. When businesses open up to their 3PL pals and stick to promises, the partnership shines. And when problems pop up, 3PL wizards have solutions ready to roll.
Expanding Product Offerings and Diversifying Sales Channels
Ecommerce businesses often look to expand their product offerings and diversify sales channels to reach a broader audience. The article could explore how partnering with a 3PL provider enables businesses to manage a wider range of products and efficiently handle inventory for various ecommerce sales channels and platforms, such as marketplaces, social media, and brick-and-mortar stores.
Managing Seasonal Fluctuations and Peak Demands
Seasonal fluctuations and peak demands can strain logistics operations. The article could discuss how Ecommerce logistics businesses can leverage 3PL expertise to effectively manage increased order volumes during peak seasons, ensuring smooth operations, timely deliveries, and customer satisfaction.
Enhancing Returns Management and Reverse Logistics
Efficient returns management and reverse logistics are crucial for customer satisfaction. The article could delve into how 3PL partners assist businesses in streamlining the returns process, reducing return shipping times, and inventory levels and optimizing product refurbishment, restocking, or disposal. Learn more about measuring performance of your 3PL system here.
Key Takeaways
Trust in a 3PL elevates business operations, ensuring timely, cost-effective order deliveries. Warehouse services are central to the supply chain. Every aspect of customer experience, from storage to savings, matters.
Ecommerce Integration with 3PL FAQs
How to Integrate with 3PL?
Integration requires communication, collaboration, and planning.
What is 3PL in Ecommerce?
3PL manages warehousing, shipping, and order fulfillment for online businesses.
What are Ecommerce Integrations?
Connections between eCommerce platforms and tools streamline operations.
For deeper insights into choosing the right 3PL software, check this article.
Feb 16, 2023 | Article
A 3PL (Third-Party Logistics) system is a model that offers outsourced logistics and supply chain management services to businesses, including e-commerce companies. These services encompass everything from transportation, warehousing, inventory management, and even fulfillment centers to other related functions.
Third-Party Logistics Definition
The infrastructure within a 3PL is complex and impressive. They have invested in technology, staff, warehouse storage space, and even internet-based tools to streamline logistical operations, offering advantages like flexibility, value, and scale.
Third-Party Logistics (3PL) Basics
When setting up with a 3PL provider, they’ll need details about the products, shipping volume, the shipping carrier partners, preferences, and specific delivery requirements. The efficiency of every 3PL system can be tracked by crucial KPIs depending on your operation size, objective, and capital. This information helps in customizing the service, pricing strategy, and ensuring compliance with various country regulations.
Are 3rd-Party Logistics the Same as Order Fulfillment?
3PL encompasses all logistics and distribution functions, while order fulfillment is a specific aspect that refers to the process of shipping orders fulfilling customer orders.
3PL Services vs. Drop Shipping
3PL services offer control, visibility, and expertise over traditional third party logistics company or drop shipping methods same services. They provide real-time supply chain visibility, performance metrics, and quality control, impacting the bottom line positively.
Benefits of Third-Party Logistics provider
3PL offers numerous benefits, including cost savings, improved efficiency, increased customer satisfaction, capital efficiency, and employee management.
Will Your Business Benefit from Third-Party Logistics?
Businesses facing issues like lack of logistics expertise, high logistics costs, or difficulty in meeting customer demands can benefit from 3PL.
The Third-Party Logistics Process
The 3PL process includes eCommerce platform integration, inventory management, picking, packing, and shipping, same-day shipping, and reverse logistics.
Integration with Other Systems Like ERP or Order Management
When partnering with a 3PL provider, integration with existing enterprise systems is key for efficient operations. The 3PL should have APIs and connectors that allow seamless data sharing between warehouse management systems, ERPs, order management tools, and other platforms. This integration enables real-time inventory updates, order information sharing, and overall visibility across systems. Companies should evaluate integration capabilities when selecting a 3PL partner.
IT Infrastructure and Technology Requirements for 3PL Providers
3PL providers invest heavily in IT infrastructure and technology to deliver optimized logistics and transportation services. They utilize warehouse management systems, transportation management systems, barcode scanning, RFID, IoT sensors, and other technologies. Robust IT capabilities allow 3PLs to provide clients with shipment tracking, warehouse and inventory management, visibility, analytics, and more. When partnering with a 3PL, understanding their technical expertise and how they leverage technology is important.
Cost Structure and Pricing Models of 3PL Services
The cost structure of 3PL services varies but is typically asset-based, user-based, or a hybrid model. Asset-based pricing depends on the resources the 3PL provides like warehouse space, labor, vehicles. User-based pricing charges per service like per shipment or inventory handling. Hybrid models blend both fixed and variable costs. The pricing model impacts the overall costs so companies should analyze different 3PL cost structures.
Risk Management and Mitigating Risks of Outsourcing Logistics
While outsourcing logistics can provide many benefits, it also comes with risks around losing control, integration issues, and dependence on the third party logistics provider alone. Strategies like properly vetting providers, using multiple 3PLs, benchmarking costs, and maintaining oversight help mitigate risks. Companies should also have contingency plans to bring the third party logistics warehouse back in-house if necessary.
How to Evaluate and Select the Right 3PL Provider
Choosing the right 3PL requires researching multiple providers, issuing RFPs, checking references, understanding capabilities, visiting sites, and more. Key criteria include services offered, integration abilities, technology, reliability, costs, security, and industry experience. Taking the time to thoroughly evaluate 3PLs improves the chances of selecting the best fit.
Downsides or Disadvantages of Using 3PL vs In-House Logistics
While 3PL services offer many advantages, potential downsides exist like reduced control, communication challenges, and issues ending the relationship. Companies have to rely on the 3PL yet may lack visibility into day-to-day operations. Rigorous oversight and governance processes can help minimize downside risks when outsourcing logistics services.
Logistics Automation and How 3PLs Leverage Automation
Automation is a major trend in the 3PL industry. Leading logistics and logistics service providers now utilize automated warehousing with robotics, automated inventory tracking, self-driving trucks, and more. This automation provides accuracy, speed, and efficiency benefits. When selecting a 3PL, evaluating their automation capabilities and expertise ensures access to optimized, tech-driven services.
Sustainability and Green Logistics Practices of 3PL Providers
Many 3PLs now focus on sustainability KPIs related to energy, waste, emissions, and more. They implement green practices around packaging, transportation mode selection, facility design, renewable energy, and recycling programs. Companies wanting to improve supply chain sustainability can benefit from choosing an eco-conscious 3PL partner.
Future Trends and Innovations in the 3PL Industry
Experts forecast key trends for 3PL services including further automation, blockchain adoption, predictive analytics, warehouse robotics, self-driving vehicles, increased vertical integration, and cybersecurity focus. Companies should stay abreast of innovations by attending tradeshows, reading industry content, or directly asking 3PLs about emerging capabilities.
Regulations and Compliance Considerations when Using 3PL Services
Companies must ensure 3PLs follow regulations around areas like safety, labor, traceability, and hazardous materials handling. 3PLs should provide compliance expertise related to regulations like C-TPAT, FSMA, hazmat transport rules, and OSHA standards. Non-compliance can disrupt operations and cause penalties, so confirming regulatory capabilities when selecting a 3PL is crucial.
How 3PL Improves Customer Experience and Satisfaction
Leveraging 3PL expertise and infrastructure enhances the customer experience and satisfaction. 3PLs offer faster deliveries through localized warehousing. Their scale enables meeting demand spikes. Tracking and visibility improves communication. Higher inventory accuracy reduces problems like stockouts. Overall, the capabilities 3PLs provide lead to superior customer experiences.
Security Considerations when Partnering with a 3PL
Maintaining supply chain security is critical when outsourcing logistics operations. Companies should ensure 3PLs have strict facility access controls, cargo screening procedures, cybersecurity measures, surveillance systems, and staff background checks in place. Conducting security audits and having contractual security requirements provides oversight of 3PL security practices.
Real-Life Case Studies: Famous Brands Leveraging 3PL
Now, let’s delve into real-life case studies of renowned brands that have harnessed the power of Third-Party Logistics (3PL) to streamline their entire supply chain and operations and enhance customer experiences.
Case Study 1: Amazon Amazon, the global e-commerce giant, is a prime example of how 3PL can revolutionize logistics. By partnering with multiple 3PL providers to outsource fulfillment to, Amazon has been able to ensure timely deliveries, optimal inventory management, and efficient order fulfillment. Their real-time tracking, discounted shipping rates and diverse delivery options have become industry standards, contributing to their unparalleled customer satisfaction rates.
Case Study 2: Nike Sportswear behemoth Nike has embraced 3PL services to optimize its distribution network. By collaborating with 3PL providers, Nike has streamlined its global supply chain operations, reducing lead times and enhancing inventory visibility. This has enabled them to meet customer demands more effectively and fulfill orders swiftly, even during high-demand periods like product launches.
Case Study 3: Walmart Walmart, the retail giant, has tapped into 3PL capabilities to bolster its supply chain efficiency. By entrusting certain its logistics management functions to specialized 3PL partners, Walmart has optimized its transportation and warehousing operations. This has led to reduced costs, improved and cost effective inventory management, and a more responsive supply chain, ensuring shelves are stocked and products are readily available to customers.
These case studies underscore the transformative impact of value added services that 3PL can have on businesses across diverse industries. By outsourcing logistics and supply chain management functions to capable partners, these brands have not only enhanced operational efficiency but also elevated their customer experiences to new heights.
3PLs and Small Businesses: A Power Duo
Small businesses often operate with resource constraints, making it challenging to handle the complexities of logistics and supply chain management. This is where Third-Party Logistics (3PL) providers step in as a crucial ally. These third party logistics service providers offer small businesses access to a network of logistics experts, advanced technologies, and a well-established infrastructure without requiring the small business to invest heavily in these areas.
The Expertise Advantage
3PLs bring their expertise to the table, helping small businesses navigate the intricate world of logistics. Whether it’s optimizing routes for efficient deliveries, managing inventory levels to prevent stockouts, or ensuring compliance with regulations, 3PLs offer a depth of knowledge that can significantly benefit small businesses.
Cost-Efficiency at Scale
One of the primary benefits of partnering with a 3PL for small businesses is cost savings. 3PLs leverage their large scale and volume to negotiate better rates with carriers, secure storage spaces, and access technology platforms that might be cost-prohibitive for individual small businesses. This cost-efficiency allows small businesses to focus their financial resources on core activities, such as product development and marketing.
Seamless Scalability
As small businesses experience growth, their logistics needs evolve. 3PLs are well-equipped to accommodate this growth seamlessly. Whether it’s managing increased order volumes during peak seasons or expanding fulfillment company into new markets, 3PLs can scale their fulfillment services up or down to meet the changing demands of small businesses.
Focusing on Core Competencies
Outsourcing logistics to a 3PL enables small businesses to concentrate on their core competencies. Instead of dedicating time and effort to the intricacies of supply chain management, small businesses can channel their energy into areas where they excel, such as product innovation or customer engagement.
Access to Advanced Technology
3PLs invest heavily in technology to optimize their operations. By partnering with a 3PL, small businesses gain access to state-of-the-art technologies, including warehouse management systems, tracking tools, and analytics platforms. This technology-driven approach enhances visibility, streamlines processes, and facilitates data-driven decision-making.
However, there are potential downsides to consider when embracing 3PL partnerships.
Loss of Control
Outsourcing logistics means relinquishing a certain degree of control over critical processes. While 3PLs are experts in their field, small businesses must strike a balance between granting autonomy to the top third party logistics services provider and maintaining oversight.
Communication Challenges
Clear communication between the small business and the 3PL is paramount. Effective coordination requires transparent sharing of information, aligned expectations, and open channels of communication. Miscommunication can lead to operational hiccups and customer dissatisfaction.
Cost Considerations
While outsourcing logistics can lead to cost savings in the long run, it’s essential for small businesses to evaluate the financial implications. 3PL services come with associated fees shipping costs, which need to be weighed against potential cost savings and operational efficiencies.
Dependency on External Expertise
Relying on a 3PL for critical logistics functions can create a certain level of dependency. While this is often advantageous, small businesses should have contingency plans in place to mitigate risks in case the partnership needs to be reevaluated or changed.
Transition Challenges
If a small business decides to transition logistics back in-house, the process can be complex. Reintegrating logistics functions requires careful planning, coordination, and potential adjustments to the business’s infrastructure.
Pros and Cons of 3PL for Small Businesses
Pros:
- Expertise: 3PL providers are logistics experts, handling the complex processes that might overwhelm small businesses.
- Cost-Efficiency: 3PLs leverage economies of scale, reducing costs for warehousing, transportation, and technology.
- Scalability: As small businesses grow, 3PLs adapt quickly to handle increased order volumes and expansion into new markets.
- Focus on Core Activities: By outsourcing logistics, small businesses can concentrate on their core competencies, like product development and customer engagement.
- Access to Technology: 3PLs invest in advanced technologies that small businesses might not afford, enhancing efficiency and visibility.
Cons:
- Loss of Control: Outsourcing means relinquishing control over critical processes, requiring a balance between autonomy and oversight.
- Communication Challenges: Effective coordination with 3PLs demands transparent sharing of information and aligned expectations.
- Cost Considerations: While cost savings can be substantial, businesses need to evaluate fees against potential benefits.
- Dependency: Relying on external expertise requires contingency plans to mitigate risks of dependency.
- Transition Challenges: Transitioning logistics back in-house can be complex and requires careful planning.
3PL Trends in Business-to-Consumer (B2C) E-commerce
- Same-Day Deliveries: B2C ecommerce business demands speed. 3PLs integrate same-day deliveries and rapid fulfillment to meet customer expectations.
- Personalization: 3PLs help B2C brands create personalized experiences, from custom packaging to tailored recommendations.
- Returns Management: 3PLs streamline fulfillment and manage inventory process for returns, ensuring a seamless process that enhances customer satisfaction.
- Omnichannel Integration: 3PLs enable B2C brands to offer a unified experience across their online store and offline channels.
- Last-Mile Innovations: Drones, robots, and self-driving vehicles become the norm as 3PLs redefine last-mile delivery methods.
3PL Tech Trends: Shaping Tomorrow’s Logistics
- Automation Revolution: Warehouses equipped with robots and AI reduce errors and enhance efficiency.
- Blockchain Trust: Blockchain ensures transparent and secure supply chains, building trust among stakeholders.
- Predictive Analytics: Data-driven insights enable 3PLs to predict demand patterns and optimize operations.
- Sustainability Tech: Solar-powered warehouses, electric fleets, and eco-friendly practices drive green logistics.
- 3D Printing Integration: 3PLs incorporate 3D printing to enable on-demand and customized production.
The Future of 3PL: Beyond Horizons
Tomorrow’s 3PL thrives on hyper-connectivity. AI predicts shortages and optimizes every step. Sustainability isn’t a choice—it’s a necessity. Solar-powered warehouses and electric fleets become standard. E-commerce continues to rise, and 3PLs master the art of returns management. Blockchain ensures trust, and drones reshape deliveries. Small businesses ride the democratizing wave of 3PLs. The future isn’t just about moving goods—it’s about shaping the way goods move.
Conclusion
3PL systems are integral in today’s competitive environment, offering solutions that cater to a variety of needs, from procurement to freight forwarding. By understanding the different aspects, advantages, and potential disadvantages, businesses can make informed decisions that align with their goals, size, and industry requirements.
Feb 16, 2023 | 3PL Warehouse Management, Article
Your business deserves the best. And you can’t get that unless you utilize business processes that work for you. Software is the top resource for “shortcuts” in our world today. When many of us encounter a problem or a task which is terribly time-consuming and manual, what’s the first thing we do? Find an app or software to fix that problem. Warehouse management software solutions can help with laborious warehouse processes such as putaway, inventory control, and cycle counting, whether you’re a 3PL or a DTC brand looking for a 3PL. Here we’ve included insight into the top 3PL WMS software available to enhance your business and how to maximize the benefits they offer. Enjoy!
What is 3PL in WMS?
As you likely know, 3PL stands for Third-Party Logistics. In the context of warehouse management systems (WMS), 3PL refers to a service provider that manages the storage and distribution of goods on behalf of a company. When it comes to WMS, a 3PL provider can use the software to manage their client’s inventory, track and trace goods and shipments, and optimize warehouse operations, inventory visibility, vendor support, and customer support for their clients. This can include receiving, storing, picking, packing, and shipping of goods, as well as providing real-time visibility into inventory levels and order status. The 3PL provider takes care of the physical handling of goods, while the WMS software helps them to manage the inventory, orders, and logistics operations, such as tracking and reporting.
What is 3PL WMS Software?
3PL WMS software is a comprehensive and sophisticated warehouse management system designed to streamline and optimize the operations of third-party logistics companies. It encompasses a wide range of functionalities, such as inventory management, order fulfillment, transportation management, and analytics, all aimed at increasing efficiency, reducing costs, and improving the overall performance of the warehouse.
Benefits of Third-Party Logistics Software
With its advanced features and intuitive interface, 3PL software empowers logistics providers to effectively manage their warehouse operations, from receiving and storing goods, to picking and shipping orders, to tracking and reporting on inventory levels. This technology is an essential tool for companies that rely on third-party logistics providers to manage their warehouse and supply chain operations, as it enables them to gain real-time visibility into their inventory, improve their operational efficiency, and enhance customer satisfaction.
How to Maximize the Benefits of 3PL WMS Software
Implementing 3PL software is just the first step in maximizing the benefits it can bring to your warehouse operations. To truly get the most out of your software, it’s essential to customize it to your specific needs. This means configuring the system to optimize it for your warehouse operations, such as automating repetitive tasks, creating custom reports, or integrating with other software. By customizing the software to your specific needs, you’ll increase efficiency and get the most out of the software.
Another key tactic to keep in mind is continuously monitoring and analyzing data. By regularly monitoring the system’s performance and analyzing the data it generates, you’ll identify areas for improvement and make adjustments as needed. Additionally, you can use the data to make informed decisions and optimize your operations. By doing this, you’ll keep your warehouse operations running smoothly and efficiently.
Much 3PL software also has mobile apps that allow you to access and manage your warehouse operations from anywhere, at any time. This can be especially useful for warehouse managers and supervisors who are always on the go. Utilizing this mobile capability can help you stay on top of your warehouse operations even when you’re away from the office.
Another benefit of 3PL software is the ability to plan and optimize your inventory. The software can provide real-time data and analytics, which will help you keep track of what products sell well and what products don’t. This will allow you to make informed decisions about what products to order and how much of each product to stock. By doing this, you can optimize your inventory and reduce the costs associated with overstocking or stockouts.
Finally, good 3PL software can also help you improve customer service. By providing real-time data on inventory levels and order fulfillment, you’ll provide accurate and up-to-date information to customers. This will allow you to resolve any issues quickly and improve customer satisfaction.
ShipHero’s WMS can do all this and more, check us out!
The Role of AI in 3PL WMS Software
Artificial intelligence can make warehouse work safer and more efficient. WMS for 3PL synthesizes vast amounts of data at every moment and can find the relevant answers to your employees’ and clients’ questions before they even think to ask. As soon as employees log into their dashboards on their mobile devices, they will see which items they need to pick for today’s orders and where they can find these items. With its streamlined integrations, the WMS instantly uses the input from the scanners every time an employee scans the item, so that it updates the inventory in real-time. Inventory management software can do its job much faster with the help of artificial intelligence, rather than if employees had to enter all the inventory data into Netsuite or Oracle manually. The real-time updates lead to cost savings and flexibility for 3PL providers and eCommerce enterprises alike.
Automation rules the day in many industries, including supply chain management (SCM) and fulfillment centers. Data collection, data interchange, and analytics help business owners make decisions about everything from warehouse workflows to retail pricing. The best WMS for 3PL providers, like the best freight broker software, will even make their own decisions if you authorize them to do this. For example, you can automate the reorder process to the extent that you let the WMS decide which stock levels should trigger a reorder of certain items.
Artificial intelligence algorithms are the modus operandi of search engines like Google. An AI algorithm in an order management WMS functions in a similar way, except that they are searching within the data set of your company’s warehouses or the supply chain of which your warehouse is a part, instead of the entire searchable internet. Of course, the more comprehensive WMS suites also have applications where they can analyze data from the World Wide Web. These algorithms can study market trends among brick-and-mortar stores and online retailers. These market trends can help with predictive forecasting.
AI analytics applications are very efficient at researching multiple trends that you would not think to research. While you are busy concentrating on what is going on within the walls of your warehouse, your WMS can research trends in weather and in the price of airline tickets. Therefore, it can accurately predict how much room you will need to make in your warehouse for cute swimsuit coverups (in a summer where travel is affordable and an area where temperatures are hot) or backyard “splash park” type sprinklers (where the weather is hot and when prices are high and the labor market is in the doldrums, so no one can afford to travel). It can even study which cooking videos are trending on YouTube in which areas so that it can guess where and when customers of the eCommerce companies that store products at your warehouse are going to start buying konjac noodles so that they can make low-carb fettuccine alfredo. Your warehouse will have exactly as many boxes of konjac fettuccine as it needs by the time you have even navigated to Wikipedia to find out that the konjac plant is also called the voodoo lily, devil’s tongue, and elephant yam, among other colorful names, and that you can, in fact, make noodles out of it.
How to Get Started with 3PL WMS Software
Whenever you start with new software you must define what you need the software to do for your business. That way, once you have identified software that fits your needs, you can set it up to improve your business processes based on the KPIs you need to see improvement from. This software is often used for automating repetitive tasks, creating custom reports, or integrating with other software. And don’t forget your team. Training your team on how to use the software is crucial to ensure the smooth implementation and operation of the system. Once implemented, monitoring and analyzing the data generated by the system will help you identify areas needing adjustment and a regular maintenance cycle will ensure continuous uptime.
Future Trends in Warehouse Management
According to the Start Us Insights website, warehouse management systems are one of the biggest trends in warehouse management in 2023. WMS ranks behind warehouse automation as the second most important warehouse management trend of the year. Other notable priorities this year are inventory tracking, wearables, the Internet of Things, immersive reality, warehouse security, sustainable warehousing, and fleet management.
WMS software is not new, and it is always evolving. Software developers are continuously analyzing the copious amounts of data they receive from warehouses that use their products and are always finding ways to make the WMS better serve the needs of the clients who use the software and of society at large. For example, if you have been using the same WMS for several years, you may find that its user interface is more intuitive than it was when you first implemented it several software upgrades ago. You might also find that it offers a greater variety of features and pricing plans.
Only the oldest warehouse employees remember what it was like when warehouses had to operate without computers, and employees had to keep a record of everything by using pen and paper. The older generation will also tell you what an adjustment it was when computers first came to warehouses. Today, mobile devices are ubiquitous in warehouses, so developing user-friendly and versatile mobile applications for warehouse management is a priority. Ensuring that WMS works with every iPhone, Android, or other mobile device is the key to successful warehouse management.
The partnership of analytics and automation is another trend that is helping 3PL providers operate more efficiently. The new versions of WMS keep track of where every person and every machine goes in the warehouse at every moment and how long each product stays on the shelves. Based on this, they can generate maps for how you can better arrange your warehouse and can guide you through the process of changing your warehouse layout, either just to improve efficiency or because you have signed a contract with a new client and need to make room in your warehouse to accommodate the new client’s stock. Analytics and automation can also help you ship products from the appropriate warehouses as quickly and inexpensively as possible. An algorithm can figure out whether, on a given day, the customer that just ordered the low-carb fettuccine will receive it more quickly if it arrives by plane from the Denver warehouse or by truck from the Atlanta warehouse.
Warehouses can only be profitable if the planet can support a human population. Therefore, environmental sustainability is as much a priority in 3PL as it is in other industries. Warehouses endeavor to reduce packaging and to use packaging materials made from biodegradable or recycled content when possible. They can also organize their operations so that all the trucks that leave the warehouse are full, instead of spending all that fuel to transport only half a truckload of freight. This may involve timing outgoing shipments strategically or partnering with other warehouses to share truck space.
What Features Should You Look For in a 3PL WMS Software?
When purchasing a 3PL WMS software, it’s essential to look for specific features which will enable you to optimize your warehouse operations and gain a competitive edge in the market. Here are a few lesser-known tips and tricks to keep in mind:
- Scalability: Look for a solution that can scale your business as it grows. This will ensure the system can handle an increase in volume and complexity without any disruptions.
- Automation: Automation is key to increasing efficiency and reducing errors. Look for a solution that offers automation capabilities for tasks such as inventory management, order fulfillment, and transportation management.
- Integration: The ability to integrate with other systems and software is crucial to achieving a seamless and efficient warehouse operation. Look for a solution that can integrate with your existing systems, such as your ERP or accounting software.
- Real-time data and analytics: Real-time data and analytics is crucial for making informed decisions. Look for a solution that offers real-time data and analytics capabilities, allowing you to monitor inventory levels, track orders, and gain insights into your operations.
- Mobile compatibility: With an increasing number of warehouse workers using mobile devices, look for a solution that is mobile-compatible, allowing you to access and manage your warehouse operations from anywhere, at any time.
- Cloud-based: Cloud-based systems are increasingly popular as they can be accessed from anywhere with an internet connection, which can be more cost-effective than on-premises solutions.
Customizability of 3PL WMS Software
Every warehouse operates in its own unique way. Therefore, it helps to be able to customize business software. If you have been working at the warehouse for a long time, you probably remember how cumbersome it was when you first started using QuickBooks to keep records at the warehouse. Over time, you were able to adapt and customize it so that it fits the needs of your company. The eCommerce companies that partner with your warehouse have probably had a similar experience with business software. They have probably customized their own shopping carts and other features to something that works for them.
If it were generic and not customizable, then WMS would offer little advantage over simply entering data manually into spreadsheets, except that it would be faster. One of the benefits of using WMS for 3PL, instead of just using generic business software, is that you can customize many of the features so that they accurately reflect your warehouse processes. For example, you can customize customer billing and order fulfillment features, since the details of these processes vary from one 3PL provider to another and one warehouse to another.
With WMS for 3PL, you can customize the analytics features so that the software asks the right questions about the data. Sometimes customization features of WMS for 3PL are called decision support tools. They let you enter “what if” scenarios and then predict outcomes based on the data. The more sophisticated decision support tools can even propose scenarios to analyze and predict.
WMS for 3PL also makes it easy for you to customize the workflows in your warehouse. Without customizable WMS, cycle counting is an endless and tedious process. With customizable WMS features, you can decide based on the data which counts you need to do and at what intervals to do them. You can automate cycle counting with your WMS. Even better, the software doesn’t miss a beat if you change the layout of your warehouse and then have to pick up where you left off with the counting process. Because everything integrates so smoothly with the warehouse employees’ mobile devices, nothing seems out of the ordinary to them, because the WMS adapts so smoothly to changes in your warehouse.
How Much Does a 3PL WMS Software Cost?
The cost of 3PL WMS software can vary widely depending on the vendor, features, functionalities, warehouse size, and number of users, and it can range from a few thousand dollars for a basic system to tens of thousands of dollars for a more advanced solution, you should also consider the ongoing costs such as maintenance, support, updates, and additional modules. Do your research, compare different options, consider the benefits the software will bring to your operations, and find the one which best fits your needs and budget, considering also that some vendors may offer lower upfront costs but have higher ongoing costs, while others may have a higher initial price but offer more features and support.
Best 3PL WMS Software
1. Shiphero
ShipHero’s WMS (Warehouse Management System) software streamlines and automates the process of managing warehouse operations with its advanced features and intuitive interface. You can easily track and manage inventory, fulfill orders, and optimize operations for maximum efficiency and productivity. Using ShipHero’s WMS software saves you time and money because you can customize ShipHero’s WMS software to meet the specific needs of your business whether managing a small stockroom or a large distribution center. The software also provides real-time visibility into inventory and operations, allowing you to quickly identify and address any issues that may arise. This avoids stockouts, reduces errors, and improves customer satisfaction.
2. WithoutWire
WithoutWire’s WMS software is a cloud-based solution that helps companies manage and optimize their warehouse operations. It offers a range of features such as inventory management, order fulfillment, and real-time tracking to help businesses increase efficiency and productivity in their warehouse operations. WithoutWire software has a focus on the fashion and apparel industry, offering specific features tailored to this market such as style and size matrix management, and pre-pack functionalities. They also utilize RFID tracking and automated warehouse robots to enhance their speed.
3. Logiwa WMS
Logiwa provides a range of features such as inventory management, order fulfillment, real-time tracking, and advanced reporting to help businesses increase efficiency and productivity in their warehouse operations. This software offers advanced features such as multi-client and multi-warehouse management, and integration with multiple sales channels and shipping carriers, which can help companies to streamline their order fulfillment operations, and manage more complex logistics operations. Additionally, Logiwa WMS also offers an advanced barcode scanning functionality and mobile device compatibility, which allows for real-time inventory tracking and warehouse operations management.
4. Synapse WMS
Synapse WMS provides a range of features such as inventory management, order fulfillment, real-time tracking, and advanced reporting to help businesses increase efficiency and productivity in their warehouse operations. Synapse software offers advanced features such as multi-channel integration, EDI integration, and RFID scanning, which can help companies to streamline their order fulfillment process, and manage more complex logistics operations. Synapse also offers a more robust analytics and reporting functionality, which can help businesses make data-driven decisions about their warehouse operations.
5. 2Ship
This company focuses on leveling the playing field within shipping. Their software will search all carrier rates so you can select the best service for the best price. It is a multi-carrier shipping platform built for eCommerce businesses that help business owners know their products will be shipped in good hands. Plus through their software, you can track shipping from any carrier and you have access to performance indicators to measure their efficiency. Please note, while this is not a WMS software, it is focused on relieving your stress when it comes to your shipments so it’s a worthwhile platform to consider.
What 3PL WMS Software Does Your Business Need
Choosing the right 3PL WMS software requires a strategic approach that involves defining your business objectives, researching different software options, considering scalability, and looking for automation capabilities and integration options. By taking the time to carefully evaluate different options and considering the key factors that are essential to your business, you can ensure that you select a 3PL WMS software that is tailored to your specific needs and will help you achieve desired outcomes such as increased efficiency, reducing costs, and improved performance of your warehouse.
Security Measures in 3PL WMS Software
Cybersecurity and data privacy are major concerns for business owners in many industries. We have all heard news stories about class action lawsuits against businesses that suffered data breaches, leading to data theft that resulted in financial harm to the company’s customers, vendors, or employees. The dangers of data theft are even more serious for companies that, in the course of their work, must store data belonging to many different individuals and businesses. Cybersecurity is important for all businesses, but it is especially important for eCommerce businesses and 3PL providers. To get a sense of how much you stand to lose from data breaches, think about the financial losses your company would suffer if a single item were stolen from your warehouse, and then think about what you would lose if a Social Security number or bank account number got stolen from your company’s devices. The theft of a piece of identifying information or financial data harms your company more than the theft of a pair of sunglasses or a lemon juicer. Now think about how many bank account numbers, credit card numbers, and pieces of identifying information such as Social Security numbers, birth dates, and passwords are stored in your system. Clearly, you have a lot to lose.
Businesses should review their cybersecurity policies periodically, sometimes with the help of cybersecurity consultants. Even though new computer viruses, and new protections against them, are developing all the time, some data security best practices remain consistent across time. For example, cloud-based software is more secure than storing sensitive data on the hard drives of your devices. If you use cloud-based business software, including cloud-based WMS for 3PLs, then your warehouse’s data is safe on the cloud even if hackers are able to breach your company’s devices.
Another way that 3PL providers can protect their data is to require employees to use strong passwords and to update them on a regular basis. For example, the WMS might require each employee to update his or her password after a certain number of logins or every 90 days, whichever happens sooner. It should only accept passwords that are strong. Characteristics of a strong password are that it has at least one capital letter, one lowercase letter, one number, and one special character. The password should be at least eight characters long, and it should not contain numbers in sequence, nor should it include words found in the dictionary. Some WMS for 3PL also have employees set up security questions, which the system prompts them to answer after entering their password. The WMS can propose a list of security questions from which employees can choose, such as, “What street did you live on in third grade?” or “What is your paternal grandmother’s name?” The purpose of these security questions is that the answers to them are unlikely to change (unlike “What is your favorite food?” or “How old is your youngest child?”), but other people are unlikely to be able to guess them or look them up (such as “What city were you born in?” or “When is your wedding anniversary?”).
Two-factor authentication is an increasingly prevalent feature in business software in general and in WMS for 3PL in particular. With two-factor authentication, an employee must confirm, through another device such as a mobile phone, that he or she is trying to sign into a company computer. The leading WMS for 3PL companies offers online support and phone support for questions about security matters relating to the software.
Key Takeaways
The WMS you choose for your company should not only fit your needs but also be easy to use. The goal here is to find software that gives you more power and time back in your day. While the initial setup of any software can be painful, the WMS you choose will likely have a consultant to help walk you through every step of the setup. If you want to speak to an eCommerce WMS expert, come chat with us at ShipHero!
3PL WMS Software FAQs
What is a Tier 1 WMS?
A Tier 1 WMS, or Warehouse Management System, is a type of software that is typically used by larger organizations or those with more complex warehouse operations. These systems tend to have a wide range of functionalities and capabilities and are typically more expensive than other types of WMS software. They are often used by companies that operate multiple warehouses, have a high volume of SKUs or require advanced features like RFID and real-time tracking. They also tend to integrate with other enterprise systems such as ERP, CRM and eCommerce platforms. Tier 1 WMS solutions are often provided by large, well-established software vendors, and are known for their robustness and scalability. They are designed for large companies with a significant investment in warehouse operations and logistics.
What are the Four Types of 3PL?
There are several different types of third-party logistics companies (3PL), but the four main types are:
- Traditional 3PL: These providers offer a wide range of logistics services, including transportation, warehousing, and distribution. They typically handle the entire logistics process from start to finish, taking on the role of a full logistics provider.
- Dedicated contract carriage: These providers focus on transportation services, such as trucking and rail, and manage a dedicated fleet of vehicles for a specific customer. They typically handle all aspects of transportation, including scheduling, routing, and compliance.
- Lead logistics provider: These providers act as a coordinator and managers of logistics services, working with multiple service providers to create a comprehensive logistics solution for a specific customer. They are typically responsible for managing the overall logistics process and coordinating with other service providers.
- Value-added logistics: These providers focus on providing specialized logistics services, such as packaging, assembly, kitting, and labeling. They typically handle only a specific aspect of the logistics process, but they add value to the overall logistics solution by providing specialized services that the customer may not have in-house.
It’s worth noting that some providers may offer a combination of these services and that the line between these categories can sometimes be blurred, depending on the specific 3PL provider and the services they offer.
What Are the Latest Trends in WMS?
The integration of artificial intelligence (AI) and robotics, IoT devices, and cloud technology is revolutionizing the warehouse management system (WMS) industry. AI and machine learning algorithms are used to optimize warehouse operations and provide real-time data and analytics. Robotics are used to automate tasks such as picking, packing, and transportation. And IoT devices allow for real-time monitoring and tracking of inventory and equipment, and cloud-based WMS allows warehouse managers to access their data and control their operations from anywhere at any time and also allows for easy scalability. These trends enable warehouse managers to optimize their operations, improve efficiency, and reduce costs.
