Rapidly growing volumes of online deliveries, ensuring on-time deliveries and the need to make logistics cost-efficient are driving enterprises to outsource their delivery operations. Hence, emerges the need to embrace best 3PL software. Traditional means of managing logistics parters are rapidly becoming redundant as complexities and customer expectations increase.
Maintaining lengthy spreadsheets, manual calls to drivers, guessing estimated arrival times and sharing the same with customers are major roadblocks that make managing outsourced logistics processes inefficient. Poor delivery productivity, increasing transportation risks, lack of fleet visibility, inaccurate performance benchmarking, rising overhead expenses and more are results of inefficient 3PL management.
The whole logistical process could also get a tad bit difficult when the e-commerce companies expand. With the growth of a company, the whole management of the supply chain becomes more challenging and cost-intensive. This could, eventually, cause companies to commit major mistakes that take them down in terms of customer satisfaction. If this whole nuance is left unchecked for too long it can also cause a dip in the overall growth of the businesses, eventually lowering the ascertained profits. So, at times it better to leave the job to the experts, in this case, 3PL providers. But again, one needs efficient tools to ensure that 3PL’s are actually driving greater logistics value for an enterprise and not adding to existing complexities. Hence, emerges the need to embrace a 3PL management system.
While Deciding Upon the Best 3PL Software, Consider these 6 Things
In order to handle logistics management efficiently and accurately, as a third-party logistics company (3PL), your client should have full confidence in your high degree of promptness and transparency. For having delighted clients around, you should be streamlined enough to complete order fulfilment flawlessly, which forms an integral part of any business’ operations. However, keeping clients happy isn’t a rocket science, as there are scores of best practices and combat-proven tips available that can be put to good use.
As soon as a customer places an order, the complex and multistage process of order fulfilment commences. From there on, the ordered item is picked and packed, processed for shipping and finally handed over to the destination. Even though it might sound simple, in reality it is complex process involving lots of data, and a slightest of glitch at any stage might disrupt the entire flow, badly effecting delivery timeline. And this is where 3PL system comes into play to streamline the entire process.
The best way to achieve operational efficiency is to hire a third-party logistics company, who will manage the inventory and order fulfilments. You can also have access to 3PL software which is known to automate and streamline these functions. By outsourcing this, you not only save on your company money but flawlessly manage it all without much of a hassle. Below are the details to help you learn more about 3PL System and how you can choose the right one for you.
What is 3PL software?
3PL Software refers to the tool that helps businesses to track, trace and optimize 3PL operations right from the time an order is picked up from a warehouse till it’s delivered to the end-customers. 3PL software is also a gateway to highly efficient logistics management. It is driven by cutting edge technologies like machine learning, business analytics, predictive intelligence, IoT and cloud computing.
Modern 3PL systems also help businesses provide their customer with end-to-end transparency of the delivery process. Information like when a package shipped, when it’s out for delivery, who is going to deliver it and when will the package be delivered are all made available to customers that too as and when it happens.
Three Core Logistics Functions That 3PL Software Can Improve
The kind of services offered by 3 PLs is not standardized. It depends majorly on the independent 3 PL company as to what they specialize in and what kind of services they have to offer. However, the most common types or areas of functions and services that almost all 3PL software solutions can improve are as follows-
- Transportation services focused on handling and movement of inventory between manufacturers and buyers or between a standalone e-commerce business and the buyers.
- Warehousing and distribution services that comprise storage, picking, dropping, shipping, and returns.
- Financial and information services that deal with a range of offerings like accounting, cost control, freight forwarding, inventory tracking, and management, etc.
Three Types of 3PL Software you must know
Things were tough in pre-internet era, when companies had no other options but to manually manage their inventory and order fulfilment processes. Even though third-party logistics existed, several segments of supply chain puzzle operated in silos that basically resulted in wide margin of errors. However, the modern software system have now made things simpler by integrating and automating various aspects of order fulfilment, thereby helping logistics industry to streamline their functions through 3PL software applications.
Below stated are the three primary types of 3PL software you may come across:
1. Standalone Warehouse Management Systems (3PL WMS)
2. Enterprise Resource Planning (ERP) Systems
3. Integrated CSM Suites
Now, let’s discuss each of them in greater detail.
1. Standalone Warehouse Management Systems
The Warehouse Management System or WMS has brought in revolutionary changes in the supply chain operations. 3PL’s WMS ensures that goods and materials move through warehouses in the most efficient and cost-effective way, thereby enhancing productivity and operational efficiency. WMS handles multiple functions that enable these movements, including inventory tracking, picking, packing, receiving and put-away. WMS is that versatile software which enables companies to control and administer several warehouse operations beginning with receiving materials or products at the warehouse and ending when an order is fulfilled and shipped to its destination.
WMS may vary widely in complexity depending on the organizations, but there are some basic features that remains constant across all of them. Most important thing in WMS is the warehouse design that helps customise the entire workflow. This helps maximise storage space and streamlines picking and packing. Apart from functions such as tracking inventory accuracy, generating packing list, and sending notifications to customers; certain WMS can even help with labour management, cold storage, freight tracking, RFID support, data analytics and reporting.
WMS can also be designed or configured for the organization's specific requirements. Additionally, the software may also be customised specifically for the types of goods the organization sells; for example, an apparel retailer would have different requirements than a grocery chain.
2. Enterprise Resource Planning (ERP) Systems
Enterprise Resource Planning or ERP as a 3PL software can maximize profits, reduce wait times, improves customer service and thereby provides a reliable logistics advantage. It seamlessly integrates all other processes that are essential to running a business across various modules. So, basically functions like Finance, CRM, HR, Production, and Marketing can be amalgamated with inventory, order fulfilment and delivery.
The core function of ERP software is to share database across employees of various divisions who can access required information as per their roles. By utilizing a shared database, ERP software offers synchronized reporting and automation. Employees can also pull out collated data from the system and slice it and dice it as per requirement. There’s no manual data culling needed which in turn increased accuracy and efficiency. Even though the ERP implementation at company level is a time taking process, it might get further worse with some downtime and software glitches.
3. Integrated Supply Chain Management (SCM) Suites
A Supply Chain Management (SCM) system is a set of software tools that encompasses everything that starts right from production till the final destination where it is offloaded to the customer. It would include demand sensing, demand segmentation and modelling, resource planning, new product forecasting, product development, warehousing, inventory management and shipping.
Older supply chain models had limited functions such as procurement, transportation management, or manufacturing. Moreover it was operated manually to extract and transport information from one level of supply chain to the next. Modern SCM suites, however, integrate all the activities for better visibility, agility and security at a lower operational cost. They are now easy to use. SCM solutions also make use of the electronic data interchange (EDI) system to transfer data between partners for improved efficiency.
Benefits of 3PL Software:
The yardstick of any successful business is determined by its satisfied customers. And modern day customers have become increasingly demanding in nature and wants their orders to be fulfilled as soon as possible without any margin of error. They also want to be notified and should be able to track their orders throughout the shipping process. While small business set-ups can manage these operations in-house, for large businesses outsourcing this function to any third-party logistics provider turns out to be highly efficient and cost effective because of its sheer volume of logistics operations.
Here are some of the benefits associated with using 3PL software:
Automation saves time
The best part of 3PL is that it integrates and automates several aspects of the supply chain process, thereby saves a lot of time for both the providers and their clients. Orders and payments are tracked automatically, and it is relatively simpler to pull out reports and invoices from a single database source, rather than from separate locations.
Integration with e-commerce platforms like Amazon and Shopify can further help with improving automation. With more 3PLs offering support for e-commerce fulfilment and retail businesses, now is an interesting phase to help merchants grow their business through fulfilment.
Cost reduction at both ends
The best part of 3PL is that it streamlines all the functions that results in cost reduction which can be passed on to their clients. Hence, it’s a win-win situation for both. Clients get to experience lower shipping costs, faster order fulfilment, and enhanced customer satisfaction.
Lower risk for error
With manual intervention of order fulfilment process at various stages, there is always a risk of committing errors at any of the stages, which mostly happen even after taking highest order of precautions. However, with 3PL technology, all of the data is centrally stored, integrated for swift functioning and accuracy. Likewise businesses also experience an error free smooth functioning.
Ability to Customise and scale up
Unlike manual functioning, 3PL software can easily be customised and scaled up to suit the respective client’s needs. As a result, even though the business enters into a new market, or opens up new distribution centre, or adds inventory; it quickly adapts and makes a smooth transition in entire operations of order fulfilment.
Provides high degree of business insights
3PL software is known to integrate all of the several supply chain activities, alongside tracking shipments, payments, and returns. It also helps you to have better view of your business by tracking inventory, running performance reviews and generate customised reports – all in a click of a button. These data points help you run your business flawlessly without much of a glitch.
Greater level of transparency
Many major business fail because of lack of transparency. However, when you outsource your supply chain activities to a 3PL service provider, you should be assured with the level of transparency it provides. Having access to 3PL software gives you the veto power to track 3PL’s performance as well as the sales and inventory details to make sure everything is on track.
Enhanced customer service
The beauty of 3PL software is that it maintains high level of transparency when it comes to customer’s order. They can track shipments in real-time and make returns without any hassle. The software also makes it possible to offer shipping benefits like same day or two-day shipping. These elements add high level of trust and satisfaction among customers.
How a 3PL Software Improves Delivery Operations
Modern 3PL freight software improves warehousing operations, ensures faster pickups, enhances shipping operations and improves customer service by enabling efficient returns management.
1. Receiving Inventory
This is step 1 because there cannot be a step 2 or 3 without ascertaining an inventory that needs to be forwarded. A 3PL warehouse receives the company’s inventory and then stores the products in their own warehouse before shipping it out to the end consumer. A 3PL management system quickly sends out an alert to the said delivery partner regarding an order being placed for an item available at the warehouse.
When a customer places an order for a commodity on a website, the process is called ‘picking’ in logistical terms. Once an order is placed by a customer, the 3PL company receives the order from the business. A 3Pl software solution looks for available executives and assigns a pickup task to ensure the order is forwarded efficiently of shipping. Once the order is appropriately packaged, such software also helps warehouse executives intelligently label the order before it is sent out for delivery.
After packaging obviously comes shipping. This is when the order commences the last-mile journey and finally reached the end-customer. A 3PL management system helps businesses drastically improve the final leg of delivery by ensuring 100% visibility of 3PL vehicles. It immediately raises red flags in case of unnecessary stoppages or delays. It generates highly accurate ETAs and empowers enterprises to ensure that a 3PL provider is following service-level-agreements. This in turn drastically improves 3PL performance management in the long run.
The last step, albeit optional, is returned. Though returns do not happen with all delivered orders, the way a return is handled could act as a major determinant of customer satisfaction. The efficiency at which a 3PL is able to manage the returns of products goes a long way in actualizing customer delight. Modern 3PL software providers help brands quickly capture the reason behind a return and gain first-hand insights into customer feedback.
Go for a 3PL Software that offers following elements
It is imperative to have the right third-party logistics provider, as they will be handling most vital segment of your business – order fulfilment. And picking up the wrong vendor could be a blunder in terms of investment and customer dissatisfaction.
Here goes 6 important elements you should look for when choosing 3PL software:
While getting your company’s order fulfilment process outsourced, you should make sure that the technology used by the vendors should be latest and top-notch. Latest technologies such as AI (Artificial Intelligence), RPA (Robotic Process Automation) and Blockchain are bringing in revolutionary changes in the supply chain industry. Integration of these latest technologies can streamline and automate processes to reduce errors and costs.
The primary reason of getting the order fulfilment process of any company outsourced to a 3PL provider is phenomenal growth in business, which makes it unmanageable in-house. With the objective and focus of continual growth, it is pertinent to go for a 3PL software that would simply accelerate the process of scalability.
There are certain regulatory requirements when it comes to product packaging, and labelling – an experienced 3PL provider will know these requirements and have the technology to fulfil them, as a result the shipment moves flawlessly without any hiccups.
Multiple Client Architecture
This is primarily a concern for 3PL providers rather than their clients, it is pertinent to look for a 3PL software that can manage inventory and order fulfilment for multiple clients. For companies who use 3PL providers, 3PL software can be a benefit if there are multiple divisions within a single company.
This is very common as well as crucial function of most of the 3PL technology solutions available in the market. This essential function ensures that invoices are never lost or left unpaid and can have a proper archive of the old invoices. This type of software helps automate put-away, receiving, storage, and shipping so that the charges for these services are always accurate and on-time.
The primary reason to have a 3PL provider is because of its cost effectiveness. Even SaaS software that meets your needs and is affordable can offers additional features such as tracking transactions. Third-party logistics software solutions are just as diverse as 3PL providers themselves. For first time users of 3PL, it is advisable to take a closer look at the type of software the company uses. The 3PL provider should be able to offer speedy and accuracy of their order fulfilment processes.
8 Key Features of FarEye : The Best 3PL Software
Today’s best 3PL software should have capabilities that directly help enterprises not only enhance 3PL management but also optimize transportation costs, ensure faster deliveries, drive data-driven decision making, boost customer experience and achieve much more.
1. Intelligent Routing
A 3Pl solution should be able to automate route planning based on multiple variable factors like weather, traffic, delivery urgency, empty miles, fuel consumption and delivery productivity. It needs to keep feeding delivery executives with routes that optimized in real-time based on existing scenarios.
2. Automated Scheduling & Task Allocation
Advanced 3PL software automatically schedules a delivery task, based on the kind of delivery, beforehand to save time. It also automatically allocates delivery tasks to executives based on their KPIs through via a mobile application.
3. Real-Time Tracking and Tracing
The best 3PL software will empower brands to gain a minute-to-minute update on how a 3PL provider is proceeding with a delivery task. It gives real-time information on a delivery vehicle’s location, whether it’s indulging in unplanned stoppages or unnecessarily causing delays, what’s the ETA of the vehicle to its final destination, so on and so forth.
4. Generate Predictive Intelligence
Advanced 3PL freight software is powered by machine learning algorithms that enable logistics stakeholders to know in advance if delivery will be made early, on-time or it will be delayed.
5. Intelligent Carrier Selection
There are a plethora of 3PLs or carriers available in the market to choose from, but understanding which one is best suited for the particular delivery job might be a daunting task. Modern 3PL software enables enterprises to connect with different carriers based on the contract price and load type. Such software easily manages complex rate contracts, transport capacity matrix and time window agreement of different carriers across different regions. An advanced 3PL management system supports exhaustive constraints like carrier rate contracts, transport network model, routes, pickup/delivery windows, tonnage and more while analyzing available carriers.
6. Risk Purchase Capabilities
Modern 3PL freight software drives Spot purchase bidding capabilities that empower enterprises in getting real-time quotes from logistics partners for handling peak volumes and carrier unavailability exceptions. This eliminates the risk of favouritism and the high cost of transportation.
7. Stakeholder Communications
Such software drives seamless communication across disparate delivery stakeholders. It ensures that the right information is available to the right person at the right time. In case of emergencies and exceptions, 3PL software can expedite ticket resolution processes by triggering alerts meant for senior management.
8. Crowdsourced Delivery
It might so happen that despite having an in-house delivery fleet, during peak businesses hours or season a brand might find it difficult to scale delivery operations owing to capacity constraints. In this case, a 3PL management system can quickly scan across the gig-economy to look for temporary or part-time delivery executives. Based on KPIs like productivity, cost, proximity, delivery type, turnaround-time and more, 3PL software onboards drivers to temporarily scale delivery operations.
You might feel a little overwhelmed with all the information in this blog and might also be convinced that 3PL management is an expensive, complicated affair; however, with the right tools in place 3PL management becomes extremely easy. Modern 3PL software boosts the effectiveness of outscouring delivery operations and helps select the right partner for the right job. FarEye’s 3PL management system is empowering global businesses to achieve never before seen logistics efficiencies in the guise of optimized costs, delightful deliveries, enhanced 3PL provider’s productivity, greater volumes of on-time deliveries and more. To know how you can signup for a quick demo here.