Opening a warehouse in another country requires significant investment and could even end up not drawing a profit! That’s why many businesses turn to third-party logistics providers (3PLs) to run their overseas warehouses for them. With proper 3PL warehouse management software, the chances of success go way up. Integrating a successful 3PL warehouse management system is a guaranteed way to help save time and money.
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What This Article Covers:
Why (And Why Not) Adopt 3PL
It’s well-known that including 3PL service providers can boost warehouse success rates and simplify your supply chain. While many companies use 3PL providers, some problems can still arise.
One such pitfall is the lack of direct control over warehouse management processes. This lack of control can lead to client companies needing more knowledge about how a warehouse runs.
Luckily, with the software solutions available today, it’s much easier for 3PL companies to provide extensive visibility to shippers that use their services. As 3PL management companies implement modern technology, a rise in their adoption is sure to become a trend.
When a 3PL company provides services to multiple clients (known as multi-tenant warehousing), the complexity of their warehouse operations rises. Implementing a comprehensive warehouse management system grants a 3PL company organized data on warehouse stock with an easy way to keep track of goods belonging to multiple clients.
Integrating one of these software solutions makes this process manageable and helps 3PL companies increase productivity and client satisfaction.
What Is a 3PL Warehouse Management System?
As a whole, warehouse management systems (WMS) are fulfillment software that streamline the time-consuming processes that go into running one or more warehouses. As with all warehousing systems solutions, there is no one-size-fits-all.
Integrating WMS with 3PL in mind leads to different packages than something meant for a single warehousing enterprise. Multi-client architectures, 3PL billing functionality and other value-added services are examples of additions that mesh well with 3PL integration. Before making any decisions, find out what you need to supply your 3PL with to keep them running smoothly.
3PL companies are there to make your life easier. You can provide them with updated tools and efficiency upgrades anytime. Smoothing out any bumps they may experience sets you up for success in the future.
Key Features
What can a WMS bring to third-party logistics companies? Well, there are numerous vital features that can be very beneficial. Here are a few standouts:
Inventory Visibility
Seeing data in real time is essential for any third-party logistics company. Shippers using 3PL services want to have the opportunity to access reports, view progress and track inventory remotely with the help of web portals.
Providing access to customers is beneficial to 3PL companies as well. Most shippers and third-party logistics service providers agree that access to real-time insights from their 3PL management system will help them make better shipping-related decisions. A big part of 3PL services revolves around providing 3PL inventory management visibility to their clients.
It’s clear that a big part of 3PL services revolves around providing 3PL inventory management visibility to their clients. Luckily, many of today’s warehouse management solutions seamlessly integrate with enterprise resource planning or enterprise accounting software solutions, which can provide visibility through a web portal. These portals allow clients to view inventory levels, place orders and perform other tasks.
This type of software provides warehouse visibility, displaying multi-state warehouses with inventory shown. Source
The easy access that’s made possible with 3PL web portals eliminates the need for time-consuming tasks such as manually generating customer reports. Instead, clients can log in securely and access the data anytime using any device.
Added functionality such as in-advance shipping notices (ASNs) and the ability for customers to schedule picking and shipping demand by themselves makes the portal not only convenient but necessary.
Inventory Tracking
While third-party logistics WMS are a tool for management, these warehouse manager systems serve another critical role in customer service.
Because of the need for constant interaction between freight shippers and 3PL companies, a WMS that can instantly provide information, such as the location of the goods, is essential. If a 3PL company can’t tell customers where their goods currently are, customer retention will drop.
With the inclusion of comprehensive 3PL warehouse management software, it’s much easier to track and manage goods. Many of these solutions allow tracking via UPC, SKU, batch, package, parts and serial number. While many options seem excessive, having multiple tools available is valuable in a multi-tenant warehousing situation.
Such complex inventory control systems show why a barcode system to track goods is essential. It streamlines warehousing and tracking tasks, reducing the number of manual tasks and increasing the efficiency and accuracy of operations.
Another important part of inventory tracking is the ability to log all inventory activity in and out of the warehouse, including in-warehouse transfers. Data about these in-house movements can be very beneficial when the need to perform a complete audit arises. Extensive record keeping is critical to quickly identify and correct errors, especially in multi-tenant warehousing.
Luckily, today’s warehouse management systems provide many benefits to improve efficiency and customer service. Beyond this, companies can also use 3pl inventory management software to provide better transparency into inventory processes.
3PL Billing
Billing becomes a complicated process when providing 3PL services for multiple clients. Manually tracking transactions and compiling them into bills is a process that can take days to complete. Such an undertaking wastes time and can even strain customer relations.
With so many transactions needing to be processed, errors are bound to appear. Billing mistakes look unprofessional and can even seem dishonest, which is a critical error when building trust with a client.
That’s why a comprehensive 3PL warehouse system is so important. It provides all the tools necessary to establish an accurate billing system that dramatically cuts the time billing takes up while simultaneously improving its functionality.
Accounting accessibility is often an important feature in 3PL WMS. Source
Because a 3PL WMS can use barcode scanners, it’s much easier to track every single transaction and movement out of and within the warehouse. With this ability, you can generate accurate invoices at any moment using real-time data.
Order Fulfillment
3PL companies are fulfillment experts. They take on many headache-inducing fulfillment practices to save clients time and hidden fulfillment costs that come with running their operations.
Integrating a WMS to streamline fulfillment processes makes these cumbersome duties easier on your 3PL partner. When responsibilities such as replenishing shipping supplies, purchasing equipment for the fulfillment services center and leasing new warehouse space fall to a 3PL, a WMS with fulfillment options is a great choice.
ECommerce 3PL assistance is on the rise as demand for products continues to grow. Integrated 3PL WMS solutions allow all electronic sales channel points to report directly to the 3PL for order fulfillment when orders come in. This data is then compared against real-time inventory stocks and can help with shipment automation.
Logistics Management
3PL companies come in many different shapes and sizes. Some provide general solutions, while others focus on more specialized ones. Your business and client partnership can help guide you to a specific WMS choice.
A general 3PL company focuses on just that, general logistics. Many of the topics above are necessary inclusions for general third-party logistics providers.
A niche 3PL provider specializes in a particular industry or market. For example, a niche 3PL provider in the hazardous materials (HAZMAT) market needs MSDS (material safety data sheet) functionality. Cold storage warehouse operations can implement a WMS that allows FIFO and FEFO picking to suit their needs better.
Supply chain transportation statistics and metrics accessibility through WMS. Source
It would be best to keep your general or niche needs in mind when choosing a WMS. Please spend some time defining your particular requirements, and then look at our requirements template to narrow down the best solution.
Multiple System Support
According to Statista, the 3PL market has expanded by 29% within the last ten years. With such explosive growth in the usage of 3PL warehouse and inventory management software, 3PL companies are taking steps to create the best possible software solutions.
One significant benefit is that 3PL companies know what they need to be successful. Instead of waiting for new software to come out, they take the initiative and create software suites that tackle the many problems they face. Expect increased efficiency, intuitive design and advanced services from emerging 3PL management software as time passes.
3PL companies stepping up to the plate and designing software offers many other significant benefits. One such advantage is the reduction of downtime when integrating these new solutions. With intuitive software built specifically for 3PL companies, you can expect less downtime when orienting around the implementation of new software.
Final Takeaways
Third-party logistics are here to stay and provide a wealth of benefits for companies that integrate their services. Freeing up time and resources while maintaining efficiency and customer satisfaction is paramount in healthy supply chain management.
As shipping and warehousing demands rise 3PL centric warehousing, inventory and transportation management solutions will continue to grow in accessibility and strength. If you haven’t considered adopting a 3PL-focused WMS solution, now is the time. Get started by navigating our comparison report to find the right software solution.
How has implementing a 3PL warehouse management system improved your warehouse solutions? Let us know down below!