Third Party Logistics

Some 3PLs rely solely on manual tracking of their client’s inventory. As a consequence they struggle with low productivity and marginal profitability and are unable to provide reliable and timely information on activity and inventory to their clients. 

Some 3PLs have implemented a conventional ERP system. This gives them inventory management but lacks support for:

1. activity tracking,
2. labour management,
3. billing and
4. client integration or
5. client data access portal and
6. is full of business accounting features that are completely irrelevant to their business.

As soon as you implement an ERP system for your 3PL you will have a data entry problem. How will you get your client orders into the system? This requires manual data entry or at very least a file upload solution (if you can get your clients to send you orders in an Excel file). You ideally need to integrate with your clients in some way to automate data exchange, many traditional ERPs (yours or your clients’) are not built to do this easily. 

Some 3PLs develop their own warehouse management system but their solution lacks breadth of experience in both software development and logistics. Their in house solution grows into a compromised monster over time and lacks functionality and flexibility and may also be plagued with issues and bugs as more and more code gets tacked onto a fundamentally flawed base.

Warehouse Management Systems typically improve productivity by up to 30% (depending on current circumstance) with payback periods of 6-18 months.  The larger the staffing, the more basic the current systems the shorter the payback period.

• The elimination of administration data entry tasks related to inbound and outbound order entry, receiving and shipping confirmations and activity tracking for billing. If you’re using an ERP to run your operations, this could the single biggest contributor to productivity gain across the business.
• Elimination of manual stock counts for client reporting.
• Streamlined receiving and put-away processing that operates in a flow process rather than delivery based sorting and checking.
• Reduction of picking time due to bin location management.
• Reduction of travel path from more efficient product slotting due to improved management capability of pick faces, replenishment and directed storage.
• Reduction of travel path through implementation of advanced multi-order picking methods. 
• Product pictures on mobile device aid product identification.
• Better control with directed staging of outbound orders.
• Automation of the delivery run sheets and manifests.
• Integration with a freight management system with order picking or packing to eliminate manual consignment note entry.
• Pre-consigning of outbound orders to apply freight labels during picking.

• Barcode scanning and real time transaction control leads to:
  • improved inventory accuracy and less stock outs due to missing stock,
  • less picking errors, reduced returns and credits, enhanced reputation.
• Directed put-away reduces lead times for put-away and order fulfillment.
• Traditional paper based administrative tasks for purchase order receiving and sales order confirmation are eliminated making host system tracking of activity more timely and reducing administrative overhead.
• General productivity boost increases the throughput capacity of warehouse enabling you to ship more from the same space.
• Easy to learn step by step transaction workflow makes most warehouse tasks quick to learn, shortening the time from hiring to effectiveness for casual labour. Also providing more flexibility to manage peak workloads with additional staff.
• Tracking log of every mobile device action feeds into a labour management system so that standard activity costs can be developed. This helps with cost control and labour management.
• The activity tracking data is also used to price billable activities in 3PL. Priced activity data can then be extracted to an accounting system for client invoicing and reporting.
• Online access for clients to see their own data and produce reports and downloads will reduce the need for customer service calls and demands for manual stock counting or reporting and data extract.