A warehouse management system is the well-known solution to managing and streamlining day-to-day operations in the warehouse. But what is a 3PL logistics warehouse management system?
Since the rise of retail, ecommerce-based online shopping, some companies and inventory owners prefer to outsource their warehouse operations to third party logistics (3PL) providers. This is where the ‘3PL’ comes from.
Stick 3PL in front of ‘warehouse management system’, and you have a warehouse management system designed for 3PL providers.
Since 3PL logistics providers must cater to the needs of multiple clients, they will need warehouse management software that is capable of doing the same. This means that the software must cover an extremely comprehensive scope of complex operations, as well as allowing customers to monitor their own inventory.
What is 3PL Logistics?
The term 3PL stands for ‘third party logistics’ and refers to the outsourcing of logistics services and order fulfilment.
Services that third party logistics companies might offer include supply chain processes like inventory procurement, storage, distribution, packaging, and shipment.
Reasons that retail or eCommerce businesses might outsource to a 3PL provider include:
- Their company has grown beyond its means to manage in-house
- They’re looking at ways to keep costs down while maximising efficiency and accuracy
- They want to focus on their sales strategy and not the complexity of the logistics industry
What does 3PL Warehouse Management Software do?
A 3PL warehouse management system is the centralized software used by a 3PL provider to manage all of their warehouse operations.
It can be on-premise, cloud-based, or SaaS-hosted. It streamlines complex operations, lowers operation costs, and improves decision making.
The best 3PL warehouse management software is bespoke and tailored to the business’ individual operational needs. It is also developed from scratch to meet the needs of their follow-on, or third party customers.
The many-to-many relationship a 3PL system must cater for is complex and systems that have been modified from single-owner models to 3PL models often have system gaps.
Features of 3PL WMS Software
Any 3PL warehouse management system, whether cloud, SaaS-hosted, or on-site, should have the following minimum features:
- Full Real-time Stock Traceability, Visibility & Control
- EDI Framework for Interfacing Directly to Customers & Suppliers
- Business Handling & Storage Rules per Client/Product, Class/Product
- Storage & Billing Capture up to & Including Invoicing Stage
- Value Added Services – Captured on Handhelds
- Auto Report Scheduling – Automatically Produce Customer Reports
- Web Front End – with customised Customer & Supplier Views
- Crystal Reports Plugin – Varying Docket Layouts per Customer
- Asset Control (Chep Pallets, Cages, etc.)
- Load Bay Management with Slot Management & KPI’s
- Cross Docking
- Interfaces to Routing & Transport Systems
- Management of Value-added Services (e.g. Co-packing)
- Interface ASNs with Retailers
3PL Warehouse Management System Integrations
The best warehouse management systems should be able to facilitate seamless electronic data interchange between a range of internal and external software systems.
This includes Enterprise Resource Planning (ERP) Systems, Supply Chain Management Systems, Order Management Systems (OMS), Transportation Management Systems, Barcode Scanning Systems, accounting programs, and ecommerce platforms.
Good 3PL WMS software should be able to accommodate the needs of your business across multiple platforms, facilitating communication with clients and vendors.
3PL Logistics Warehouse Operator Challenges:
- Optimising Stock Picking & Order Accuracy
- Process Optimisation
- Value-added Services Agility
- Phasing out Redundant Technology
- Real-time Reporting
- Rules & Regulations Alignment
- Effective Team Communications
- Partner Collaboration & Systems/Process Alignment
Tell me the benefit of using third party logistics software?
Automated Warehouse Processes
Human errors are eliminated by introducing software and/or hardware into repetitive manual processes. Warehouse workflow is streamlined, making processes faster and increasing customer satisfaction.
Customisation and Scalability
3PL software can be customised and scaled to suit the needs of individual clients and changing market demands. It is easy to adjust sales volumes and requirements and accommodate seasonal peaks.
By outsourcing to 3PL logistics service providers, you don’t need to worry about building an infrastructure from scratch. Their warehouse operations are already fast and efficient, with all the connections in place to handle your inventory and ensure deliveries are made on time.
Effective Financial Management
A 3PL provider can grant you financial transparency through dedicated software modules, which automatically generate accurate invoices for billable activities.
Flexible Payment Scheme
The 3PL model works on the basis that you only pay for the customer orders that are successfully processed and completed.
An integrated 3PL warehouse management system will give you real-time data about anything, from anywhere. From any mobile, handheld device (HHT) with an internet connection, you can see information about anything from stock availability and shipment status, to inventory progress and document verification processes.
Real-time visibility also means that you can track inventory and sales alongside the 3PL provider’s performance.
Improved Customer Satisfaction
Track orders, payments and shipments to give your customers delivery reports. Returns processes will also be made more straightforward with 3PL technology and you can offer shipping benefits, such as same-day and two-day shipping.
Supply Chain Management
Manage supply chain activities from procurement, all the way through to shipment and order delivery, all from one place.
6 things to consider when choosing the right 3PL software solution
If you are thinking about outsourcing to 3PL, you should consider both the 3PL provider and the software they use. Look at the following things and make sure they are tailored to your business requirements:
- Up-to-Date Technology – modern WMS solutions can streamline and automate processes to reduce errors and costs
- Scalable Functionality – choose a 3PL software that offers room for growth
- Labelling Compliance – choose a 3PL provider that understands and can fulfil the regulatory requirements behind your packing process
- Multiple Customer Architecture – the 3PL software should manage inventory and order fulfilment for multiple customers
- Billing Functions – having this feature ensures that invoices are not lost or left unpaid and it helps automate putaway, receiving, storage, and shipping
- Great Value – look for software that meets your needs but is still affordable and offers additional features
Read more in our ProSKU warehouse optimisation case studies.
Our 3PL Logistics customers rely on our robust and flexible WMS Warehouse Management
Software to reduce operational OpEx, improve processes and introduce value-added services
to generate new revenue streams.
Request a no-obligation demonstration today – call us on 0800 170 1161 or contact us online.