Order fulfillment is a multistage process that involves picking, packing, processing and shipping the customer’s orders. There are many moving parts in order fulfillment, and any hitches can result in customer complaints. Fortunately, there are many best practices and proven tips for operating your 3PL business.
One of the best ways for clients to manage their inventory and order fulfillment process is to hire a third-party logistics company. 3PL companies provide access to 3PL logistics software that helps you oversee your work and automate many of the tedious parts of the order fulfillment process.
Keep reading to learn more about third-party logistics software and what to consider when shopping for one.
What is a 3PL Warehouse Management System?
A 3PL warehouse management system is software that assists in a company’s logistics operations. Some of its core features include:
- Warehouse task management
- Process detailing for picking, packing and shipping
- Delivery trackers
- Shipping route optimization
Why Should You Use 3PL Software for a Small Business?
3PL software for small businesses comes with many benefits. Here are some of the reasons why you should use 3PL software for small businesses:
Save Time and Money
3PL software can track orders, generate invoices and process payments automatically, reducing the time needed to do these often lengthy tasks. In addition to saving time, automating these tasks means you don’t have to pay for additional data entry clerks, reducing your operational costs.
Reduce Human Error
Manual data entry and processing are prone to errors, especially if the information passes through many people. 3PL software automates the process to prevent costly mistakes and human error.
Fulfill Your Clients’ Needs
Different companies have different needs, which is why 3PL software is highly customizable. You can modify the features according to client requirements and scale up by adding extra features as your company grows.
Make Better Informed Decisions
3PL software comes with reporting tools that give you insights into inventory, staff performance and other key company information. These reports help you make better decisions based on accurate real-time data.
What is Inventory and Order Fulfillment Software?
Inventory and order fulfillment software is a system that handles your product stock and buyer orders. It ensures that all orders are fulfilled without delay to guarantee they arrive on time.
Here are some key features of inventory and order fulfillment software:
- Purchase order tracking
- Shipping order creation
- Real-time visibility for inventory
The Three Types of Logistics Management Software
Before the internet, companies were forced to manage their inventory and order fulfillment processes manually. Though third-party logistics was an option, different pieces of the supply chain puzzle operated independently, resulting in a wide error margin. Modern software systems have made it possible for the logistics industry to not only streamline but integrate and automate the various aspects of order fulfillment through various types of 3PL software.
Here are the three primary types of 3PL software you may come across:
- WMS (warehouse management systems)
- ERP (enterprise resource planning) systems
- SCM (supply chain management) suites
Let’s take a closer look at the three types of 3PL software:
Warehouse Management Systems
3PL warehouse management systems (WMS) increase the productivity and efficiency of 3PL’s warehouse operations. By speeding up work routines and streamlining the picking, packing and shipping process, a 3PL WMS can save companies a lot of money. Simply put, warehouse management systems help companies run various warehouse tasks, from material receiving to order fulfillment.
While different warehouse management systems offer different things, most have some features in common. One of the most common features in a WMS is warehouse design, which helps you maximize inventory storage, define pick and pack areas and speed the process up.
Most warehouse management systems can also track inventory, create packing lists and send delivery updates to buyers. More advanced features found in standalone warehouse management systems include cold storage management, RFID tag support and freight tracking.
While it is easy to imagine what functions warehouse management systems provide based on the name alone, things are not quite so clear with enterprise resource planning (ERP) systems. Think of ERP systems as the “glue” that combines your client’s business processes and divisions into a unified dashboard. This includes things like inventory, order fulfillment, accounting, human resources (HR) and customer relationship management (CRM).
Though each system has its differences, they all feature a shared database where employees in different divisions (such as accounting or sales) can all access the information they need to fulfill their roles. The shared database from ERP software improves your data integrity, letting you create the most accurate reports. Additionally, ERP automates several data entry processes to help you save time and money.
In order to generate a report, employees pull data from one system instead of manually merging information from separate spreadsheets and databases. Because the system is responsible for report generation, you improve operational efficiency and report accuracy. The implementation time for an ERP is a long and arduous process so be prepared for some downtime and hiccups as you implement ERP software.
The process that begins with product development and ends with order delivery is called the supply chain. Supply chain activities include everything from product development and production to warehousing, inventory management and shipping. A supply chain management suite is a system that helps you manage your entire supply chain. It can track the flow of merchandise, shipping data and financial information during the entire production process.
In the past, supply chain models were segmented into individual activities like procurement and manufacturing. These old models were limited because you still needed to manually move information from one activity to the next.
These days, SCM suites merge all the activities from production to shipping in one dashboard so you don’t have to spend time transferring information. Additionally, this unified dashboard lowers your expenses and makes the software easier to use. Most modern SCM solutions also use electronic data interchange (EDI) to transfer information to your business partners.
What Are the Benefits of Using 3PL Software?
The success of your logistics business is largely determined by client satisfaction. Today, customers expect their orders to arrive as soon as possible, and they also want to track their orders during the entire shipping process.
For small businesses, these operations can often be managed in-house but for larger businesses, outsourcing the order fulfillment process to a third-party logistics provider is the best way to ensure accuracy and efficiency for high-volume supply chain operations.
The benefits of using 3PL software include:
Time Saved Through Automation
3PL software saves logistics providers and their clients a lot of time through various task automations and process integrations. 3PL software can track orders, handle payments automatically and save reports and invoices in one place rather than spread it across multiple databases.
eCommerce platform integrations with 3PL software, such as Shopify and Amazon, automatically capture orders and add the information right into your database.
Reduced Costs on Both Ends
3PL software’s numerous automations reduce costs for logistics providers because they pay less for data entry clerks. In turn, these cost savings mean lower shipping costs for clients.
Lower Risk for Error
When different stages of the order fulfillment process are handled manually, there is a risk for error at each stage and when data passes from one stage to the next. 3PL software automatically stores and processes all the data to prevent costly human errors.
Customization and Scalability
The beauty of 3PL software is that it can be customized and scaled to suit the needs of individual clients. This makes for no-hassle transitions if your company adds inventory, opens a new distribution center, or enters another market.
Insight Into Your Clients’ Business
3PL software reports the entire supply chain activity from production to shipping. This means you can see what’s happening in any part of the business at any time.
A third-party logistics deal requires trust because clients are giving their entire supply chain to another company. 3PL software lets clients track logistics performance and current inventory to ensure everything is going as it should be.
Improved Customer Support
3PL software can track orders and payments from beginning to end, which means that your customers will be able to track shipments in real-time and easily make returns. 3PL software also makes it possible to offer expedited shipping options like same-day and two-day shipping.
3PL software offers end-to-end order tracking, giving customers the ability to track all deliveries in real time. This software also ensures your same-day and two-day shipments arrive on time by routing last-mile deliveries from the nearest fulfillment centers to the customer.
Every business is unique, so switching to a 3PL provider may make more sense for some companies than others. If you’re considering moving to third-party logistics, keep reading to find out what you need to keep in mind when shopping for 3PL software solutions.
The Role of ERP Software in the Logistics Industry
A logistics business consists of many moving parts that can be tough to manage without assistance. Here are some issues that may arise when you manage a logistics company:
- Lack of transparency in the production and delivery process
- Discrepancy between inventory records and actual supplies
- No real-time shipping trackers
ERP software is one of the best solutions to address these issues. Here’s what ERP can do for your clients:
- Provide a real-time inventory monitoring system to eliminate discrepancies
- Give you a transparent view of the entire supply chain process
- Offer real-time shipping trackers to customers
Best Practices for Order Fulfillment Software for Small Business
Implementing order fulfillment software is one thing, but using it properly is another. Here are three important best practices to improve your order fulfillment process:
Keep Track of Your Entire Inventory and Stock
While 3PL software keeps track of your entire inventory automatically, some things may slip through the cracks. Set aside time every few months to thoroughly inspect your warehouse, ensuring that your records and real-world conditions match, to prevent unnoticed inventory discrepancies.
Follow Up on Customer Orders
Part of order fulfillment is ensuring that customers are happy with their orders. Send an email or notification a few days after delivery to ask customers what they think about the items they received. This helps you gauge customer satisfaction and possibly uncover issues before they can complain about them.
Write Detailed Product Descriptions
Adding your products’ weight, dimensions and other relevant shipping details helps customers buy in confidence. It also helps your team look shipping details up quickly when they need them.
6 Things to Look for When Choosing 3PL Software
Working with third-party logistics companies means the client is handing over the entire order fulfillment process to somebody else. Making the wrong choice could end up costing your company money in the long run. If things go really poorly, you might end up losing clients, which could cause your business to suffer.
When looking for the best 3PL software, here’s what to search for:
Your 3PL provider of choice should have the best technology at their disposal. The most advanced third-party logistics software can save you a lot of money and reduce errors through automation.
Most businesses outsource to a 3PL company because they’ve grown too large for an in-house logistics department. If you plan to work with growing companies, choose 3PL software that can scale with their business.
Product Packaging and Labeling Standards
Logistics businesses need to obey certain rules and regulations about product packaging and labeling. Good 3PL software will help you fulfill these requirements and prevent issues in the future.
Support for Multiple Client Accounts
There may be several 3PL software users in a single company because each division needs access to the data stored there. Good 3PL software should offer multiple user accounts so people from different divisions can log into the app at the same time.
A common feature in most 3PL technology solutions, billing functions are essential in ensuring that invoices are never lost or left unpaid. This type of software automates putaway, receiving, storage and shipping so that the charges for these services are always accurate and on time.
Many clients work with 3PL providers so they don’t have to pay for logistics software. Find 3PL software with affordable prices and advanced features so you can give the best value and service to your clients.
There are many 3PL software choices on the market, and they cater to different needs. If you’re planning to become a 3PL provider, research what kind of logistics software your potential clients prefer and match your software to the client’s needs.
Choose ShipHero – the Best 3PL Software
ShipHero is the leading software for 3PL providers looking to simplify operations and meet eCommerce demand. Here’s why you should use ShipHero to power your 3PL operations.
ShipHero offers a browser-based dashboard where you and your clients can view orders, inventory and reports. ShipHero’s software also offers a customizable user interface, matching your dashboard with your branding.
ShipHero provides your clients with real-time inventory visibility. Our software also alerts you when stocks are low and lets you create purchase orders at any time.
Order Management Software
Your customers’ support team can easily find, modify or view the status of any order. With ShipHero, your customers can easily get ahead of any issues with their orders to keep their customers happy.
Easy to Automate
Quickly set rules that use any number of conditions to determine how orders are prioritized, handled, boxed and shipped.
The Bottom Line
The benefits of 3PL software are undeniable. Whether you are a 3PL provider looking to streamline and automate your processes or a company looking to hand over control of order fulfillment, 3PL software solutions are the key to improving speed, accuracy and customer satisfaction.
When choosing 3PL software, consider a variety of options. A standalone warehouse management system may be adequate if you simply want to manage the day-to-day operations of your supply chain process more efficiently. If you hope to optimize all aspects of your supply chain beyond simple warehousing, an integrated SCM system may be more beneficial. If improved billing and reporting systems are your primary concern, an ERP-based product might be best.
The key to finding the best 3PL software is to take the time to examine your company’s needs and find a software solution to meet them. Don’t forget to include the option for customization and scalability as well.
Choosing 3PL Software FAQs
How do you choose the best 3PL software platform?
To choose the best 3PL software platform, you need to research what your clients need and find the software that fulfills these requirements at a reasonable cost.
Who uses warehouse management system software?
Warehouse management system software is used by many companies, from manufacturers to food and beverage brands.
What are the main criteria for selecting a 3PL provider?
The key criteria for selecting 3PL providers and 3PL software are:
- Up-to-date software technology
- Labeling regulation compliance
- Multiple account support
- Invoicing tools
- Great value for money