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Logistics and supply chain operations have become more critical in today's fast-paced business environment. Your logistics business's success relies heavily on client satisfaction, and meeting customer expectations for quick deliveries and real-time order tracking is now the norm. Through our client relationships, we have seen a growing demand for 3PL software to support firms in meeting these expectations and remaining competitive in the market.
Due to the effect that giants such as Amazon have had on the eCommerce sector, customers now expect quick and efficient order fulfilment. If these standards are unmet, it can sour the customer relationship, damage a firm's market reputation, and lose potential future business. To highlight the repercussions, 38% of customers say they will never use an online store again if they have a poor experience.
Managing these operations in-house can prove challenging for both small and larger companies. Smaller businesses may find they don’t have the resources, infrastructure, and workforce to meet growing demand, especially if they are trying to grow. Larger businesses are often looking for ways to move into new markets, cut costs, and scale, and continuing to meet customer expectations whilst trying to reach these goals can be difficult.
Effective 3PL software can help reduce costs, elevate customer experience, streamline order processes, and much more. Before deciding which software you need for your eCommerce business, it is vital to understand the types of software available and what to consider when choosing the right one.
In this guide, we will explore the essential factors to consider when choosing 3PL software for your business and three of the most common types of 3PL software on the market.
Factors to Consider When Choosing 3PL Software
Choosing the right 3PL software is a critical decision that can impact your business's efficiency and competitiveness. Here are six key factors to consider:
- Up-To-Date Technology - Ensure that your chosen 3PL software provider offers the latest technology. Advanced software can save you money and reduce errors through automation.
- Scalability - As your business grows, your software should be able to scale with it. Look for 3PL software to accommodate increased order volumes, additional warehouses, and new locations.
- Product Packaging and Labeling Standards - Logistics businesses must comply with specific rules and regulations regarding product packaging and labelling. Ensure that your chosen software helps you fulfil these requirements.
- Support for Multiple Client Accounts - If your business serves different divisions, ensure that the 3PL software supports multiple user accounts for simultaneous access.
- Invoicing Features - Billing functions are essential in 3PL software. Make sure the software can automate invoicing to ensure accuracy and timeliness.
- Great Value - Balancing cost and features is crucial. Look for 3PL software that provides affordable pricing while offering the advanced features your business needs.
Next, we’ll look at some of the most popular and common types of 3PL software you will see on the market. We’ll explore their features and the advantages and disadvantages of the software for a business.
Most Common Types of 3PL Software on the Market
1. 3PL Warehouse Management Software (WMS)
3PL Warehouse Management Software (WMS) is a software solution designed to oversee daily warehouse operations and provide comprehensive inventory visibility throughout the entire process. Its functionalities encompass various aspects, including receiving and putaway, order picking, packing, and shipping, as well as ensuring timely replenishment of inventory.
Key Features of WMS include:
- Inventory Tracking: WMS enables real-time tracking of inventory, ensuring accurate stock levels and reducing the risk of stockouts or overstocks.
- Order Picking and Packing: It automates the process of picking items for orders and packing them efficiently, saving time and minimising errors.
- Real-time Visibility: WMS provides a bird's-eye view of warehouse activities, allowing for better planning and decision-making.
- Reporting: Robust reporting features help analyse warehouse performance and identify areas for improvement.
What are the Advantages of WMS?
Real-time Stock Control
Effective 3PL Warehouse Management Software is crucial for real-time stock control in your warehouse. It oversees your inventory levels, meticulously recording inbound and outbound products and their allocation to storage locations. This real-time visibility empowers your logistics manager to know the exact quantities of each SKU at any given moment.
By replacing archaic paper-based document management with digital precision, the WMS eliminates the risk of costly overstocks and ensures you never face the headache of stockouts, which can negatively affect your ability to provide timely service.
Organisation of Operations
Efficiency is the lifeblood of logistics operations, and a WMS is your strategic ally in achieving it. This software coordinates warehouse processes to optimise your entire logistics workflow. For instance, it deftly handles slotting, automatically distributing materials within storage locations based on predefined rules and criteria set by your logistics manager. This enhances stock control and significantly boosts the performance of tasks like storage and order picking.
But the WMS doesn't stop at material distribution; it also organises and streamlines your warehouse operators. By creating more efficient pick paths and minimising travel, the WMS elevates operational productivity. It seamlessly integrates with assistive devices used in order picking, such as RF scanners, voice picking systems, and pick-to-light set-ups, guiding operators to carry out their tasks.
Automation of Logistics Processes
In the realm of automated warehouses, a cutting-edge WMS takes centre stage. It deftly manages the movements of robotic equipment, such as stacker cranes and conveyors, to supercharge throughput while preventing errors.
For these highly automated facilities to function seamlessly, a 3PL Warehouse Management Software must be able to interface with other critical applications like the Warehouse Control System (WCS software). The WCS takes its cues from the WMS, orchestrating the movements of automatic handling equipment in coordination with the broader logistics strategy. This effort accelerates product movements and, in turn, improves operations like picking and replenishment.
Integration with Other Supply Chain Systems
The implementation of a WMS isn't just about improving your warehouse; it's about enhancing your entire supply chain. This software facilitates the exchange of information between your warehouse and other departments, such as production, sales, and purchasing, through integration with computer programs like Enterprise Resource Planning (ERP) or Manufacturing Execution Systems (MES).
What are the Disadvantages of WMS?
Initial Set-up Costs
The initial cost of setting up a new system can be expensive, so you will need to ensure that the budget will cover the investment. While any large investment can be a risk and an expense, the time and money you will save in the long run should offset your initial outlay.
Initial System Set-up
As well as initial costs, you also need to consider the time and effort it will take to manually set the system up correctly. In most businesses, there are multiple existing systems, and it will take some time to integrate them with the new WMS.
When choosing a WMS system, ensure you have the time, people, and support to ensure you can set up the system correctly. However, once the system is set up, you can reap the benefits of the WMS we mentioned above.
The Potential for a Single Point of Failure
Another concern businesses raise is that by combining all their systems into one warehouse management system, they will have a single point of failure for their entire warehouse operations. This failure would mean a business would have no access to data if the system goes down, causing a halt to all activity.
To overcome this concern when choosing which system to invest in, consider the reliability of a system and what support the WMS provides to get your operations back up and running as soon as possible.
2. Transportation Management Software (TMS)
Transportation management software helps plan and execute the physical movement of goods across the supply chain via land, air, and sea.
Key features of transportation management software include:
- Carrier Selection: TMS helps choose the most suitable carriers based on cost, capacity, and delivery times.
- Route Optimisation: It optimises routes to minimise transportation costs, reduce fuel consumption, and enhance delivery efficiency.
- Freight Tracking: TMS allows real-time tracking of shipments, providing visibility to customers and enhancing communication.
- Freight Payment: It streamlines the payment process for freight services, ensuring accurate and timely payments.
What are the Advantages of TMS?
Elevate Customer Service
In the current business landscape, customers demand swift deliveries, the flexibility to tweak their orders on short notice, and personalised delivery schedules. These expectations aren't mere desires but essential requisites for every order they initiate. For enterprises, the daunting task lies in aligning their operations to meet these elevated customer standards. This is precisely where Transport Management Systems (TMS) step in.
TMS will link the systems responsible for managing orders to those in charge of managing warehouses. By amalgamating customer orders, TMS makes selecting the most economically viable carrier easier. This strategic alignment of systems is a win-win situation for both customers and businesses alike, heightening efficiency and customer satisfaction.
Tracking Order Deliveries
Utilising a TMS enables continuous monitoring of shipment locations. Companies receive alerts for delayed or undelivered cargo, allowing them to make timely adjustments. This knowledge helps businesses respond promptly to service disruptions. Additionally, tracking data aids in determining route durations, facilitating the creation of more efficient route schedules.
Improved Inventory Management
With a dependable TMS solution at their disposal, businesses can closely monitor the progress of their order and shipping processes in real time. This heightened visibility allows for more precise inventory forecasting, subsequently elevating the levels of transparency and accountability within the supply chain. Furthermore, the inclusion of tracking features in the TMS software ensures that you can rest assured your clients will consistently receive their goods according to schedule.
This enhanced control over inventory management is a valuable asset for all forthcoming supply chain endeavours, particularly in the burgeoning eCommerce freight transportation sector.
Enhanced Warehouse Productivity
When it comes to warehouse efficiency, a TMS can be a highly valuable tool. To put it simply, the greater your utilisation of the transportation management system, the less time you need to allocate for freight management. Consequently, you'll find yourself with more available time to dedicate to other responsibilities, particularly those related to warehouse operations.
Reduced Shipping Costs
Effective transportation management software can have a significant impact on reducing shipping costs. A top-tier system will meticulously analyse the financial aspects of every logistics route, pinpointing the most efficient ones. It will also provide tailored solutions for cost reduction in areas such as fuel consumption and driver overtime.
What are the Disadvantages of TMS?
Onboarding can be Time-Consuming
Motivating and educating your team, particularly those accustomed to the old way of doing things, can be challenging. Familiarising your drivers, team members, and customers with a new system may require some time and effort. However, once they have mastered the system, they will experience the benefits we mentioned above.
Initial Set-up Costs can be Higher
When compared to certain legacy systems, a cloud-based TMS solution may appear more expensive, potentially catching some businesses off guard and causing them to question its long-term value. Nevertheless, unlike legacy systems, a cloud-based system doesn't entail additional IT support or server usage on your end.
Usually, after the initial set-up cost, you can gain access to the platform within a few hours. Routine software updates are managed by in-house software teams, ensuring you always have an up-to-date system for a seamless user experience. While the initial cost may seem substantial, it may lead to significant savings over the years.
Finding a TMS with the Necessary Integrations can be a Challenge
Each business is unique, and locating a solution that seamlessly integrates with your current systems can be daunting. When transitioning to a TMS, many businesses consider the compatibility of a new system with other software they currently rely on.
Some TMS systems offer a wide range of pre-built integrations that simplify the process of importing customer data and managing accounting tasks. You have the flexibility to choose from integrations like ELD and telematics, accounting software, and compliance tools, which can make handling cross-border shipments less cumbersome.
3. Order Management Software (OMS)
Next in our list of common types of 3PL software is Order Management Software (OMS). This specialised software platform is crafted to assist enterprises in supervising and monitoring their sales orders, inventory status, customer data, payment handling, shipping procedures, and other elements related to the order fulfilment process.
This software establishes a centralised hub for companies to oversee orders originating from various sources, including eCommerce platforms, online marketplaces, point-of-sale systems, and beyond. Its primary objective is to automate and optimise the intricate processes of order processing and fulfilment.
Key Features of OMS include:
- Order Tracking: OMS enables businesses to track orders at every stage of the fulfilment process, keeping customers informed.
- Inventory Integration: It integrates with inventory systems to ensure the accurate allocation of products to orders.
- Customer Service: OMS enhances customer service by providing insights into order status and enabling prompt responses to inquiries.
- Visibility: It offers visibility into the entire order lifecycle, helping businesses manage their orders effectively.
What are the Advantages of OMS?
Efficiently Manage Inventory Costs
One of the advantages of OMS implementation is the ability to assume control over inventory management through streamlined processes driven by automation. OMS simplifies the task of relocating stock from one location to another with straightforward scanning procedures for replenishment or putaway.
This streamlined process involves utilising in-location stock movements by configuring rules to automate actions related to orders during packing. These rules are triggered by factors such as the selected delivery option, value, and weight, eliminating the necessity for manual interventions and reducing the time expended on such activities.
eCommerce and multichannel inventory management software also offer automated insights into product details, aiding in determining the optimal storage location for inventory and appropriate handling procedures for specific items, such as fragile or flammable products.
Inventory tracking software further facilitates data-driven decision-making by automatically monitoring each item's stock levels and sales data. It enhances the efficiency of tasks such as introducing new items to inventory, tracking sales, and maintaining accurate stock levels.
Process Order Quicker and More Accurately
OMS simplifies the task of monitoring incoming orders from your online stores by offering real-time updates as orders are received. This seamless process continues until the orders are dispatched directly within the platform.
Furthermore, automated order fulfilment systems empower users to effortlessly monitor the status of pending orders and access the order history whenever information about a previous or completed order is required. Since the system operates in the cloud and eliminates the need for hosting infrastructure, you can access this valuable information anywhere and at any time.
Unify Your Sales Channels with a Centralised Hub
An essential aspect of an OMS is its API integration capabilities, which are pivotal in streamlining complex processes and automating time-consuming tasks and workflows. This automation saves valuable time and mitigates the risk of human errors.
Many OMSs boast diverse integrations, encompassing marketplaces, shopping carts, inventory systems, warehouse management systems, accounting platforms, and courier services. Seamlessly integrating all the channels and platforms that power your business eliminates the need to access multiple platforms. This results in more secure and expedited data transfers, instilling confidence in both you and your customers.
Managing your orders through a centralised platform also leads to enhanced order accuracy and speed, ultimately saving time and resources in the long term.
Removes the Need for Paperwork
Transitioning to a cloud-based system eliminates the necessity for hosting capabilities and physical paperwork.
The digitisation of documents offers numerous advantages, including time and space savings and streamlined information transfer. Opting for a cloud-based order management system over a paper-based system also fortifies security. Physical documents are susceptible to loss, challenging to track, and easily susceptible to destruction.
Furthermore, aside from reducing expenditures on paper, printers, ink, postage, and office space for storing files, the time saved by employees is particularly valuable, especially in the context of audits and repetitive, high-volume tasks.
Preventing StockoutsThrough Up-to-date Sales Channels Management
Efficiently managing inventory can be daunting, and mishandling it can result in dissatisfied customers, stressed employees, and decreased profits. An integrated Order Management System (OMS) takes control of your stock levels by seamlessly integrating with your eCommerce channels, ensuring constant synchronisation across all sales channels and eliminating the risk of overselling products.
OMS automatically pushes out stock levels to all your eCommerce channels at regular intervals, guaranteeing inventory synchronisation. This not only saves you valuable time but also enhances the customer experience. Moreover, OMS can seamlessly integrate with numerous marketplaces and shopping carts. Therefore, if your eCommerce business relies on multiple channels, you can efficiently manage them all from a single platform.
What are the Disadvantages of OMS?
High Initial Investment
Cost plays a pivotal role in the selection of software, and numerous order management systems entail an initial set-up cost in addition to recurring monthly or annual charges. Depending on the intricacy of your eCommerce fulfilment procedures, the expense associated with set-up and implementation may be substantial.
It's essential to recognise that these initial expenses can be balanced by the time and cost savings that can accrue over an extended period of using an order management system.
Required System Management
Given the significant volume of crucial business data processed through a single order management system, the proper management and upkeep of both the system and the data are paramount.
The reliability of your systems is pivotal to your business operations. An order management software that demands extensive manual intervention for maintaining connections or handling data poses a drawback. The time expended on managing these fundamental functions could be more wisely allocated to strategic planning for your business's future and growth.
Relies on Effective Integrations
The effectiveness of order management software hinges on processed data. The potency of order management software correlates directly with the quality of the data it handles. For eCommerce retailers and eCommerce fulfilment enterprises, this data typically originates from integrations with shopping carts, marketplaces, accounting systems, and courier services, all of which seamlessly synchronise with the OMS.
When order management software lacks comprehensive integrations with the essential channels you rely on and fails to provide an avenue for crafting custom API connections, it can become ineffective. In such cases, manual entry of order details remains necessary, compromising efficiency.
The Final Word
The logistics and supply chain management world has undergone a remarkable transformation with the advent of 3PL software solutions. These software tools have become indispensable for eCommerce businesses aiming to stay competitive in today's fast-paced business landscape.
3PL software has numerous impactful benefits, ranging from time-saving automation and reduced costs to enhanced transparency and improved customer support. The ability to customise and scale these solutions according to specific business needs further solidifies their importance.
When selecting the right 3PL software for your business, it's crucial to consider factors like up-to-date technology, scalability, support for multiple client accounts, invoicing features, and overall value for your investment. Each type of 3PL software, whether it's Warehouse Management Software (WMS), Transportation Management Software (TMS), or Order Management Software (OMS), brings its own unique advantages and disadvantages. Therefore, a thoughtful evaluation of your business's specific requirements is vital in making an informed choice.
Ultimately, 3PL software has reshaped the logistics and supply chain landscape, offering businesses the tools they need to streamline operations, improve efficiency, and meet the ever-increasing demands of modern eCommerce. Embracing these technologies is not just a choice but a necessity for businesses looking to thrive in today's competitive market.
We are Ready to Elevate your Order Fulfilment Process
Are you aiming to expand your eCommerce enterprise and enhance customer satisfaction? Our objective is to support ambitious eCommerce companies, ranging from new ventures to global corporations, by providing a streamlined and effective 3PL order fulfilment solution that empowers you to serve your customers more effectively.
If you aspire to establish a trusted partnership, we invite you to explore our dedicated order fulfilment page, where you can access extensive details about our procedures and reach out to us. We are enthusiastic and ready to commence our order fulfilment journey alongside you, so don't hesitate to get in touch with us today.