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What’s Unique About 3PL Warehouse Management Systems?

Opening a warehouse in another country can be risky — it requires a significant investment, and there are no guarantees that it’ll be profitable. However, there are ways to maximize your chances of success. Since trying to find warehousing solutions and staff in a foreign country can be very costly and time-consuming, companies often employ third-party logistics (3PL) companies that can provide warehousing, workforce and order processing solutions.

With the experience of 3PL services providers, the warehouse has a much higher chance of paying off, and the entire process is much easier. But while many companies use 3PL providers, there are problems that can arise in the process. Most notable is the fact that companies don’t have as much control over the warehouse management processes, sometimes having to settle for little to no knowledge over the way that it’s managed.

Luckily, with the software solutions that are available today, it’s much easier for 3PL companies to provide extensive visibility to shippers that use their services. Third-party logistics companies that implement modern technology are much more likely to be chosen. This trend is set to continue in the future, as technology is now a vital part of the value proposition that 3PL companies must be able to offer.

When logistics service providers offer 3PL services to multiple clients (which is also known as multi-tenant warehousing), the complexity of the processes is greatly increased. Since the goods and materials of multiple clients are sometimes stored and processed at the same location, 3PL providers must have a system for keeping track. But with the help of a comprehensive warehouse management system (WMS), this process becomes much more manageable, in turn helping 3PL companies increase productivity and client satisfaction.

So what can a WMS bring to third-party logistics companies? Well, there are numerous key features that can be very beneficial. Here are a few features that particularly stand out:

Real-Time Visibility

The ability to see data in real time is an essential feature that’s expected of any serious third-party logistics company. Shippers using 3PL services want to have the opportunity to easily 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. According to the 20th Annual Third-Party Logistics Study, 80% of 3PL providers and 84% of their customers agreed that it would be very helpful to have an automated way for shippers to log in and see requests from their 3PL in order to approve of decisions, activities and documents.

It’s clear that a big part of 3PL services revolves around providing inventory visibility to their clients, so it must be a part of any third-party logistics provider that wants to stay competitive. Luckily, many of today’s warehouse management systems 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.

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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 at any time, 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 absolutely necessary.

Inventory Tracking by Ownership

While third-party logistics WMS are a tool for management, because of the way that 3PL companies need to interact with their customers, warehouse management systems serve just as important a role for customer service.

Because of the need for constant interaction between 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 a customer where their goods currently are, the 3PL provider won’t be able to keep that customer for very long.

Luckily, it becomes much easier to track and manage the goods with the help of a comprehensive 3PL warehouse management software solution. It allows you to track goods by UPC, SKU, batch, package, parts and serial number. While it may seem that so many tracking options is excessive, the truth is that when you have to operate multi-tenant warehousing, having all the tools possible at your disposal is a good idea.

This is why a barcode system to track goods is absolutely essential. It streamlines warehousing and tracking tasks, reducing the number of manual tasks and increasing the efficiency and accuracy of operations. A report by Auburn University RFID Lab showed that inventory accuracy at the stock-keeping unit (SKU) level is about 6%5, while an RFID can get this number up to 95% or even higher.

Another important part of inventory tracking is the ability to log all the inventory activity in and out of the warehouse, as well as in-warehouse transfers. This can be very beneficial when the need to perform a complete audit arises. When operating a warehouse for multiple clients, any errors must be quickly identified and fixed, and that requires extensive recordkeeping of every activity. Luckily, today’s warehouse management systems provide many benefits that can not only improve the efficiency of warehouse operations, but help provide excellent customer service in the process.

Advanced 3PL Billing

When you’re providing 3PL services for multiple clients, billing becomes a very complicated process. Manually tracking each individual transaction and then compiling them into bills for each client is a process that can take days to complete, wasting precious time and resources that could be used to make day-to-day operations better. And that’s not to mention the strain that it can cause to the relationship with the customers. Since there are so many transactions that need to be processed manually, errors are almost unavoidable. Mistakes in billing look very unprofessional, and can even look dishonest, which is never a good thing when trying to build trust with a client.

That’s why a comprehensive 3PL warehouse management system is so important. It provides all the tools necessary to establish an accurate billing system that dramatically cuts the time that billing takes up, while simultaneously improving its functionality.

Because of the way that a 3PL WMS is able to use barcode scanners, it becomes much easier to track every single transaction, as well as every movement in, out of and within the warehouse. With this ability, accurate invoices can be generated at any moment using real-time data.

Get our Warehouse Management Systems Comparison Matrix.

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