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Introduction
The rise of the omnichannel fulfillment process has become the next giant leap for all brands and retailers worldwide. Merchants and 3PLs are simultaneously focusing on ensuring brand loyalty and customer expectations. The heightened customer expectations have made it difficult for brands to fulfill consumer demands.
This is where the role of 3PLs in the entire retail supply chain becomes crucial. 3PLs are constantly striving to deliver a superior shopping experience to customers across all sales channels.
3PLs face multiple challenges while fulfilling their client orders on time despite the order size, volume, and quantity. They are:
- 3PLs find it overwhelming to onboard new clients while catering to their unique needs.
- Due to a lack of an automated billing system, 3PLs incur a loss of revenue from their inability to capture invoices of their chargeable services.
- 3PL providers using legacy software cannot cope with the current customer demands as it doesn't provide visibility, optimization, and integration capabilities.
A WMS targeted for 3PL inbound, storage, and outbound operation is crucial for scaling their operations and fulfilling customer needs.
This blog will describe what 3PL companies must achieve to cater to customer demands and the checklist they need while choosing the right 3PL WMS for their business.
What modern 3PLs must be able to achieve
The third-party-logistics market is getting extremely tough day by day with the growth of the e-commerce sector. To remain competitive, a 3PL must evolve its operations constantly while managing all challenges.
Below is the list of aspects that 3PL must attain to succeed in its field and cater to ever-evolving customer needs.
1. Seamless omnichannel fulfillment
Modern 3PLs should be able to handle omnichannel fulfillment for their client, not limited to e-commerce fulfillment and warehousing and distribution services.
3PLs should always cater to the client's needs irrespective of their order size, volume, and type. Whether a distribution service for a wholesaler or an order fulfillment service for an e-commerce retailer, 3PL must have the capabilities to deliver seamless omnichannel fulfillment.
2. Dynamic processes
A modern 3PL must have the ability to meet different client requirements, storing different products based on types, marketplace guidelines, and product packaging guidelines from shipping carriers. The levels of dynamic processes of a 3PL are extremely high. Hence, a modern 3PL must focus on specialization and less on the standardization of processes.
3. Ecosystem capabilities
Every company uses multiple tools and platforms for its fulfillment, e-commerce, and retail operations. Hence, 3PLs should be able to integrate and communicate with all the existing systems that their clients are using. Before signing a client, 3PL must ensure that they can easily integrate with the existing systems of their clients. All the processes need to be automated; there shouldn’t be any manual intervention between the 3PL and its client.
4. Speed in operations and scalability
In this competitive market, a 3PL must maintain its speed of operations to process huge client order volumes daily. A 3PL must operate in a scalable way to cater to client needs.
For instance, when a client begins to scale its operations, the 3PL should be able to cater to the heightened needs of the client. Also, they should be in a state where they can onboard more clients while meeting individual needs.
5. Seamless billing
Most 3PLs find it challenging to include all their transactions and services while manually generating invoice templates for their clients. They shouldn’t overcharge or undercharge their clients.
3PLs must compute weekly/monthly invoices while communicating with their clients in a way that there is a complete record of every transaction. It will help 3PLs to simplify the billing process by considering all variables while avoiding loss of revenue.
WMS for 3PL: Essential Features to Look For
In 3PL warehousing, a reliable 3PL WMS is essential to manage warehouse operations and meet customer needs effectively.
While looking for a 3PL WMS, a few essential features are significant for scaling up the warehousing operations of a 3PL provider. Below are the few must-have features of a 3PL WMS.
1. Easy workflow configurability
Modern WMS should empower 3PLs to create dynamic and highly flexible workflows for their inbound, outbound, and storage activities. These workflows should be defined at various levels (such as warehouse, products, client, and sales).
Similarly, the WMS must enable warehouse managers to tweak and refine workflows quickly whenever required.
For instance, during peak season, there will be substantial fulfillment activities a 3PL will perform. Warehouse managers should be able to change the workflow accordingly.
The workflow should be highly dynamic in nature. It should always consider the client's unique needs, marketplace, and specific product types.
2. Out-of-the-box Integrations
Companies use many tools and systems for fulfillment, e-commerce, and retail activities. A WMS will help 3PLs seamlessly sync client information and relay the inventory and fulfillment information to the services they use.
Merchants use the WMS to provide information about their inventories and orders to the 3PL. And at the same time, they have real-time visibility of their fulfillment and inventory activity.
Having out-of-the-box integrations helps seamless information transfer and zero manual intervention while communicating with clients. The integrations also enhance the speed in setting up the system for the clients so that the 3PL can onboard and get started with fulfillment activities for every client.
Instead of building custom integrations for each client, the out-of-the-box integrations should come with the WMS.
The software integrations include:
ERPs
ERP integrations help 3PLs sync inventory, and sourcing orders, receive outbound orders and consignment details, creating purchase orders and order details.
E-commerce platforms
E-commerce platform integrations help 3PLs sync SKUs and inventory levels, source order information, manage product and catalog data and allocate inventory.
Marketplaces
Marketplace integrations help in inventory synchronization, order management, listing and catalog management, order returns, reverse logistics, reporting, and channel analytics.
Shipping software
Shipping software helps automatically generate shipping manifests, customize workflows, and print shipping labels.
Accounting software
Accounting software integration helps in 3PL billing, cash flows, sales forecast, and inventory information.
3. Automated 3PL Billing
3PLs collect transactional data from fulfillment activities (inbound, storage, and packing operations) that ultimately need to be billed to the client. When the activities occur, the WMS should collect all these data in real time.
It should attribute those data to the clients and automatically generate invoices for each client.
3PLs sent customizable rate cards to their clients that include charges for each activity that the clients will be using which is customized by the 3PL.
A WMS will capture all the transactional information from the operations (such as storage charges, printing & labeling charges, packaging charges, and shipping charges). Thus, the automatic periodic invoice will be generated while collating all the transactional information which will be sent to the client.
4. Seamless Client Onboarding
An excellent client onboarding experience is crucial in today’s competitive best 3PL providers market globally. A WMS should be the enabler for a seamless client onboarding process.
Using a WMS, 3PLs should create account access for each client so that they can view the state of the operations and use the platform simultaneously.
All the client inventory orders and product-related information should also be made available seamlessly either via manual CSV upload or by sourcing that information from different integrations in the WMS. After onboarding, the client must get access to all data and individual operations at the earliest.
A WMS must enable 3PLs to seamlessly onboard their clients so that their individual operations should go live as early as possible. And thus, the clients will get visibility into their individual operations in no time.
5. Reverse Logistics Capabilities
Order returns are becoming more prevalent in e-commerce nowadays. Merchants expect 3PLs to have capabilities and the right processes for order returns. 3PLs often face challenges when there are multiple order returns.
3PLs should be informed about the order returns using a return management tool or from marketplaces and e-commerce platforms. There should be a dedicated workflow, and a receiving process for the order returns process. A quality check is essential for any product damage for a particular order return before restocking it.
An optimal putaway process improves the dock-to-stock time and makes the product available for future orders at the earliest.
6. Ease of Implementation
Whether a 3PL wants to implement WMS for the first time or migrate from its existing system, the WMS implementation process should be seamless.
Apart from that, the information transfer process should be fast and straightforward.
The entire process must be accessible, whether the information is manually entered by the warehouse managers or sourced from various integrations.
The 3PL provider and the WMS vendor should work together to configure the WMS to offer clients omnichannel fulfillment.
The Bottom Line
The benefits of using 3PL WMS software are undeniable. Choosing the right platform can be tedious, with multiple options available in the market. Hence, knowing what a modern 3PL needs to achieve is essential.
The key to finding the best 3PL WMS is understanding the company's and client's needs and choosing the one that fulfills the demands.
A 3PL owner must be aware of the essential features of a WMS that will help streamline its inbound and outbound fulfillment operations in no time.
Hopstack Platform for Modern 3PLs
Hopstack’s warehouse operating platform was built keeping in mind the challenges modern 3PLs face in omnichannel fulfillment. The platform offers a high degree of flexibility and configuration in workflows, locations, user management, and more to help 3PLs thrive in a dynamic and challenging commerce environment.
The platform offers a stellar client-facing platform to enable collaboration and minimize manual information sharing. Along with that, Hopstack for 3PLs comes with 60+ out-of-the-box integrations to get the operations up and running in no time.
