Third party logistics (3PL) providers are organizations that offer warehousing, fulfilment and distribution services to businesses in a variety of industries including retail, wholesale and manufacturing. These companies face very unique operational challenges. They need to work as an extension of their customers, whilst keeping full control of their internal systems and processes to ensure maximum efficiency and profitability. They must balance conflicting factors such as cost, flexibility and productivity to sustain the value they offer to their customers.
However, achieving this balance is no easy task if you’re managing multiple clients and products across several facilities sometimes in different time zones, speaking diverse languages and using various currencies. You could be handling one customer’s product range spread across many warehouses or managing a warehouse containing multiple products from different customers.
This article discusses some of the main operational obstacles 3PL businesses face and how a Warehouse Management Systems (WMS) can help with overcoming all of them:
Transportation Costs
Transportation costs account for a large portion of 3PLs overheads. In addition to monitoring ever-rising fuel prices, 3PLs usually try to minimize transportation costs by using a well-established distribution network usually comprising of conveniently located facilities spread across a country. A Warehouse Management Solution can help with decreasing transportation planning time and achieving cost savings through order consolidation, load optimization, bestway routing, tracking and proof of delivery. Furthermore, a purpose-built WMS can integrate to a TMS, leveraging the data model that has client specific information, including their unique routing requirements.
Package weight is another cost that can significantly affect shipping prices. A WMS solution with volumetric calculation capabilities can calculate each order to determine the smallest box it can be placed in, thus reducing packaging and ultimately transportation costs.
Customer Services
With 3PL’s, customer service is twofold: exceptional service is expected by both your client and their customer. Clients want access and control of the products they store within your facilities. Their customers expect fast delivery and end to end visibility of purchased goods.
Your WMS empowers your clients with detailed visibility and control of their inventory under your management. By providing accurate, real-time data on orders, receipts, items and invoices, a WMS reduces obsolescence, safety stocks, and work in process. Additionally, a purpose-built WMS provides 3PLs with access to large volumes of client data that can be leveraged into valuable business information. These insightful reports can be custom built and automated to suit your client’s requirements and preferences.
A WMS also facilitates delivery of complete orders on time, every time. Increased fill rates and decreased cycle times allow you to avoid errors, shipping delays and backorders that threaten client and end customer relationships.
A real-time RF driven WMS is also self-checking. As transactions occur, the system verifies the activity and may even alert users with queries if the system detects a potential problem.
Supply Chain Visibility
Sophisticated technology solutions are fast becoming prerequisites for optimal operations management. A WMS provides enterprise-wide visibility and the ability to pull from multiple fulfilment sources. It also offers real-time information about product availability, order status, and shipment tracking.
Visibility into your entire supply chain assists in identifying gaps and inefficiencies and raise awareness of potential disruptions in advance, thus reducing any negative operational impact. Real-time visibility to key inventory, order and performance can significantly strengthen managerial decision-making.
Which WMS should I choose?
iWMS Australasia provides scalable HighJump solutions to streamline your 3PL business. Our easy to deploy software has a high level of configurability for true multi-tenancy (clients, facility, workflows, language). Our solutions have been fully Unicode-enabled and ships with twelve languages out of the box. Live implementations in each of these languages are available as well.
A purpose-built HighJump WMS will be architected to include concatenation of key identifiers with the client ID (such as item or pallet codes) to provide a truly unique identifier. Furthermore, it will allow you to determine and report on the profitability of each client in your business for both direct and indirect costs. It enables 3PLs to have a single work queue across multiple clients, interweaving tasks based on proximity and priority of work. Work will be assigned based on a holistic operational view thus maximizing efficiency.
Contact us today to find out how a WMS can optimize your processes, dramatically increase efficiency and drive down costs—empowering operational excellence, on-time customer orders and, ultimately, customer satisfaction!