What is a 3PL warehouse management system?

If you’re wondering what a 3PL warehouse management system is – in simple terms, it’s a software solution that helps companies manage their warehouse operations.

In a bygone era, warehouses used either pen and paper or spreadsheets to manage stock inventories, receiving and putaway, orders, picking, movements, shipping, and payments.

Today, if a business wants to survive, it has to meet the 21st-century demands that require instant decisions, actions and activities. In short, if a business does not move goods and materials through its warehouses in the most efficient and cost-effective way with the most up-to-date technology and warehouse management software, it will quickly join the dinosaurs in extinction.

For expert advice and service to match your company’s size and WMS requirements, please get in touch. 

What is a warehouse management system?

The combination of policies, processes, and software solutions required to organise the effective and efficient functioning and management, is known as a warehouse management system.

A warehouse management system facilitates real-time end-to-end inventory management, including visibility during the entire supply chain, receiving, putaway, movement, orders, packing, shipping, payment, and delivery to the client. It maximises labour and space utilization and business flow.

 What is a 3PL service provider?

The term is an acronym for “third-party logistics” providing services like warehouse management software solutions, logistics, and order fulfilment. Retail and eCommerce businesses can outsource these complex services to a 3PL service provider more cost-effectively and with greater efficiency than having to establish and maintain an in-house IT department, finance department, logistics department, stock control department, etc.

 What are the main types of 3PL providers?

3PL providers offer diverse services and they come in many different shapes and sizes. Some offer general services, some specialised services only, while others offer end-to-end solutions.

Here is a summary of the main types to help you decide what you require.

Standard 3PL Providers

Standard 3PL companies provide only basic services and logistics like storing, transporting, and distributing goods on your behalf.

Service Developer 3PL

Service developer 3PL companies mostly specialise in software solutions, IT security, and product tracking until delivery to the client.

Customer Adapter 3PL

Customer adapter 3PL companies manage existing logistics and solutions on behalf of the client.

Customer Developer 3PL

Customer developer 3PL companies develop new solutions or adapt and improve existing systems for their clients.

 Which are the main services offered by 3PL providers?

  • Software solutions, information, and data security. This includes SaaS warehouse management systems.
  • Transportation.
  • Warehouse/Distribution.
  • Forwarder.
  • Shipper.
  • Financial management.

 What is different about a 3PL warehouse management system?

The centralised SaaS (Software-as-a-service) Warehouse management systems provided by 3PL companies manage all warehouse operations and can be cloud-based, or on-premises, and can be accessed securely at any time, anywhere from any smart device.

A reputable 3PL warehouse management system like  ProWMS Advanced Warehouse Management Software and ProERP Enterprise Resource Planning Software  are tailored to your needs to automate and streamline complex operations; reduce costs; generate real-time data; create stock visibility, location, control, bulk- wave- or individual picking, exception handling, storing, and movement; facilitate immediate decision-making; efficiently manage logistics and fulfilment; manage finances; enable focused marketing and sales; and much more.

It eliminates manual processes and client communication by automating the entire system, eliminating errors and speeding up fulfilment. It automatically notifies you of any changes or requirements, generates and sends invoices, and sends text messages or emails to clients to keep them informed of the progress of their orders.


What are the main characteristics of a good 3PL warehouse management system?

3PL warehouse software such as ProWMS Advanced Warehouse Management Software and ProERP Enterprise Resource Planning Software  feature advanced functionalities to manage procurement, receiving, storage, location, bulk pick and sort, integrated carrier connectivity, kitted product picking, and despatch processes with full audit trail, and many more.

Here are some of the top functions of 3PL WMS software:

Integration with other software solutions

 ProWMS Advanced Warehouse Management Software and ProERP Enterprise Resource Planning Software  seamlessly integrate with other software, resource planning, accounting, and electronic data interchange; as well as supplier and customer software, allowing different portals to view inventory levels, place orders, make management decisions, and conclude fulfilment.

They facilitate constant interaction with suppliers, shippers, and clients.

Complete inventory visibility, traceability, movement, and control in real-time.

It provides instant information that enhances stock organisation, identification, and storage location; and accurately logs movements of incoming and outgoing goods as they occur, giving complete control over stock availability and limiting stock losses.

It also automates asset control, such as pallets, equipment, etc.

Efficient inventory tracking

Different options are allowed to track goods with handheld devices, via voice picking, barcodes, UPC codes, SKU, batch, package, parts, descriptions, and serial numbers, making it much easier to track every movement and manage inventory.

Inventory tracking is automated, eliminating manual tasks and errors. Up-to-date data is instantly and securely available anywhere on a smart device for management decisions and auditing purposes.

Enable planning of efficient pick paths and slotting

Optimal operator routes for picking and replenishment, and coordinating with other schedules mean reduced costs and greater efficiency. Operators can easily identify tasks and integrate them with other functions, maximising load management, slot management, cross-docking, packaging, and shipping.

Automated order fulfilment

Orders are automatically compared to real-time stocks, packing and shipping instructions are issued, and client communication, invoice and payment procedures are automatically completed. Stock levels are instantly adjusted and instructions are issued for replenishment if required.

Automated 3PL Billing

Billing can become a complex process when dealing with large numbers of diverse orders and clients. Rather than manually tracking transactions, and completing and sending invoices, accurate and instant automated billing eliminates errors, speeds up transactions and payments, and improves client relations.

Automated Report Scheduling

Detailed customer reports, stock level audits, despatch reports, financial reports, and much more can be scheduled or accessed at any time.

Customisable Solutions

There is no one-size-fits-all solution in eCommerce WMS. Each company has different challenges, policies, procedures, products, client bases, logistics requirements, etc. and the 3PL warehouse management system has to be adaptable and tailor-made for each.

The best 3PL WMS solutions allow for multi-client architectures, individualised billing functionality, marketing and communication systems, and several other value-added services as you need them to help you run your enterprise smoothly and to mesh with other systems.


Why would a company or eCommerce business outsource to a 3PL provider?

There are several reasons why you might decide to outsource your WMS solutions, rather than establishing and maintaining in-house departments. Here are just a few of those reasons.

  • Your company has grown beyond its capability to manage your own WMS and you do not want to invest a large amount of capital to meet the demands of an ever-changing physical or online business environment.
  • You want to maximise efficiency, accuracy, and cost-effectiveness, without complex systems and extensive training.
  • You want to focus on your core businesses and sales strategy, rather than logistics, stock management, and financial management.
  • You want to expand your business or warehouse abroad and do not want to invest large amounts into warehouse management, minimise risk and maximise potential.

What are the benefits of using 3PL WMS software?

The benefits are numerous, from automating processes, to greater efficiency, and access to a vast range of solutions as you require them. Here are just a few of the main benefits of using 3PL WMS software

Established Technology, Infrastructure and Expertise

You immediately gain access to established infrastructure, expertise, and tailor-made solutions meeting your specific needs,

You will have immediate access to the latest technology and software solutions without extensive purchasing or operating costs and licencing fees.

There is no delay in startup times that you would have when establishing or adapting your own in-house systems.

Greater flexibility

3PL WMS can be scaled up or down as you change your business model, when your needs change, or even during changing seasonal demands.

3PL WMS providers can quickly allocate specialist staff to deal with specific challenges and varied software and management options without the major upheaval and operating costs that a company might experience when handling its own WMS.

Complete visibility within a single system

It is much easier for a 3PL WMS provider to integrate various systems and services, providing you with a single dashboard to view all the latest data you require at any given time.

Secure cloud-based hosting of software and data

Cloud hosting is the way to go if you want fast, scalable, and super-secure access to all your services and data from anywhere in the world. Here are just some of the benefits.

Easy, secure access

Instead of using sophisticated and expensive equipment, you can securely access information such as stock availability, shipment status, inventory progress,  document verification, and much more from any smart device with internet access.

Fast and reliable computing power and data access

With 3PL WMS providers like Principal Logistics, you get a dedicated resource pool and secure data storage, rather than sharing computing power with others. It ensures stable performance with no downtime, except in rare circumstances.

Greater security.

3PL WMS providers using cloud hosting services operate on multiple virtual machines that are less prone to hardware malfunctions and cyber attacks.

Security measures are constantly updated and you will always benefit from the latest technology and security software.

Flexible Payment Schemes

3PL WMS packages usually work on the basis that you only pay for the services you use. You may add services or reduce them at any time as your requirements change.

Centralised Supply Chain Management

All end-to-end supply chain activities, from procurement to delivery, are managed on the same system with full integration with all your other software.

How to choose the right 3PL WMS software solution

It is also unfortunately true that as with any other enterprise, all 3PL WMS software and providers are not equal and it is very important to do your homework before choosing the right WMS partner. Here are some hints on what to consider when choosing a 3PL WMS provider.

  • Do they have the latest technology with constant updates and upgrades; and do they take the initiative to constantly develop software solutions?
  • Can they facilitate seamless electronic data interchange between the various internal and external software systems you already have? This would include ERP systems, supply chain management systems, accounting programmes, and barcode scanning systems, together with any others you may have invested in.
  • Do they provide the highest level of security?
  • Will their WMS easily streamline and automate processes to reduce manual intervention, errors, and costs without extensive adaptations and training?
  • Can they accommodate your needs across multiple platforms and customers, and facilitate communication with clients and suppliers?
  • Do they provide multiple system support when there is a malfunction or breakdown somewhere along the line?
  •  Will their service free up your time and resources and increase efficiency and customer satisfaction?
  • Can they accommodate scalable functions as you grow or for seasonal demands?
  • Can they fulfil the regulatory requirements for documentation, packing, shipping, etc?
  • Does their software incorporate automated and integrated billing functions?
  • Do they meet all your needs at an affordable cost?

For expert advice and service to match your company’s size and WMS requirements, contact us online or by telephone on +44 (0) 161 888 2580.