3PL Warehouse Management Software: Top Features To Look For in a 3PL WMS

Third-party logistics (3PL) providers have to continuously juggle multiple clients and evolving market expectations. Under these circumstances, 3PLs in the United States must prioritize efficiency and operational bandwidth to stay competitive. A specialized warehouse management system (WMS) tailored for 3PL providers can provide a much-needed leg up when it comes to streamlining processes, enhancing accuracy, and maximizing resource utilization.

In the United States, warehouse management systems serve as the technology backbone for running and managing all warehouse-related activities. These statistics prove what most people within the industry already know – 3PL warehouse management software features are key to scaling 3PL operations and meeting customer expectations.

8 Top Features of 3PL Warehouse Management Software

Features of warehouse management software for 3PL target key pain points that have historically plagued 3PLs providers like data integration, order management, inventory management, shipping and logistics, and multi-client management.

1. Real-Time Inventory Tracking and Management

Real-time inventory tracking and management in a 3PL WMS drives informed decisions about replenishment, storage, and order fulfillment. It provides real-time visibility into inventory levels, locations, and movement, enabling 3PLs to:

• Reduce stockouts and overstocking
• Reduce the number of manual stock checks required
• Improve order fulfillment accuracy
• Reduce labor costs
• Increase customer satisfaction
• Identify and resolve inventory discrepancies quickly

For third-party logistics providers, real-time inventory tracking and management delivers a singular source of truth for all things inventory by integrating multiple sales channels and distributorship networks. 

Automated stock replenishment is as a natural consequence of real-time inventory tracking where access to historical data enables 3PLs to automatically generate purchase orders for items that are running low in stock. 

Cycle counting facilitates the physical counting of inventory items on a regular basis to verify inventory accuracy. 

Barcode and RFID scanning, when used to support picking and putaway operations, can improve the tracking of inventory items as they move through the warehouse. 

Specialized features of warehouse management software can track inventory in real time and at an extremely granular level. For third-party logistics providers that deal with multiple clients at a global scale, these small improvements have an incremental impact on overall efficiency. 

2. Guided Order Processing

Guided order processing empowers 3PLs to meet the speed and accuracy demands of today’s logistics industry by optimizing and automating order fulfillment processes. With guided order processing, 3PLs in the US can adopt a three-pronged approach to syncing and fulfilling orders across multiple channels.

Picking Optimization

3PL WMS software features generate smart pick lists, reducing travel time and increasing picking speed. Specialized warehouse management software features can support diverse picking methods like:

• Wave Picking: Ideal for high-volume orders, consolidating multiple orders into a single wave to streamline picking.
• Zone Picking: Best for warehouses with distinct zones, where pickers are assigned to specific areas, minimizing movement.
• Batch Picking: Suitable for small orders, allowing pickers to collect items for multiple orders in one go.
• Flexi Picking: Combines various picking methods based on real-time data, adapting to changing order profiles and warehouse layouts.

Packing Optimization

Features of warehouse management software enable businesses to implement faster packing processes while reducing material waste and improving shipment accuracy. Businesses can automatically create packing slips to include all necessary information. 3PL WMS can also leverage rich data to recommend the best packing materials based on the items being shipped, to optimize packaging efficiency and reduce material costs.

Shipping Optimization

With specialized WMS software features, logistics providers can automatically select carriers based on shipping criteria such as cost, delivery speed, geographical location, and customer preferences.

With guided order processing, 3PLs in the US can automatically generate shipping labels in compliance with carrier requirements. These improve shipping costs, improve processing times, and optimize delivery performance for better performance over time.

3. Seamless Integration with Other Systems

Modern WMS software features deliver end-to-end visibility and accurate data transfer across an increasingly interconnected business ecosystem. Seamless integration across existing, and potentially new systems, make it easier for 3PLs to synchronize client information and deliver on fulfillment services seamlessly.

3PL WMS integrates with key systems with out-of-the-box integrations:

• Enterprise Resource Planning (ERP) Systems: Integrating WMS with ERP systems provides a unified view of business operations. Real-time data synchronization between WMS and ERP ensures that inventory levels, order statuses, and financial data are always up to date. On one hand, access to comprehensive data enables 3PLs to better forecast, plan, and allocate resources. On the other hand, integration-driven 3PL automation reduces the risk of errors and inefficiencies due to manual intervention.
• Marketplaces and E-Commerce Platforms: Connecting WMS with marketplaces (e.g., Amazon, eBay) and e-commerce platforms (e.g., Shopify, Magento) automatically imports orders into a centralized system. Warehouse management software features provide real-time updates on order status and inventory availability while simultaneously managing increased order volumes.
• Shipping Carriers: Multi-carrier shipping integration optimizes the shipping process and allows 3PLs to automatically determine the best carrier based on cost, delivery speed, historical performance, and customer preferences. Carrier integration enables automatic generation of compliant shipping labels and provides real-time updates on shipment status.
• Hardware Devices: Integrating WMS with hardware devices ensures accurate and efficient data capture across all levels of the pipeline. Hardware devices like barcode and RFID scanning make it easier to precisely track inventory movement with minimal manual involvement. 

4. Advanced Analytics and Reporting

For 3PLs, data is the key to scaling operations, improving operational efficiency, and driving growth. According to a recent study, data sharing continues to be a challenge with an estimated 57% shippers and 32% 3PLs citing data quality as a top concern.

WMS software features support specialized reporting and analytics capabilities to pull reports tailored to your every need. Let’s briefly glimpse at what makes analytics and reporting capabilities a must have for modern 3PLs.

• Dashboards for KPIs: Dashboards in a 3PL WMS allow warehouse managers to monitor key performance indicators (KPIs) such as order accuracy, fulfillment times, inventory turnover, and employee productivity. Flexible reporting tools allow you to generate custom reports tailored to your clients' specific requirements. Additionally, a library of pre-built dashboards and reports can provide quick insights into common metrics.
• Predictive Analytics: Predictive analytics uses historical data and trends to forecast future demand, helping 3PL providers anticipate inventory needs and optimize warehouse space. With a unified 3PL WMS platform, you can access accurate and consistent data from all your operations. This eliminates data silos and provides a clear view of your entire business. You can easily generate reports for every occasion, demonstrating the value you bring to your clients.
• Single Source of Truth: A 3PL WMS serves as a single source of truth, consolidating data from various sources and providing a comprehensive view of operations. This ensures that all stakeholders have access to accurate and up-to-date information, making it easier to manage multiple clients and report on performance metrics.

5. Receiving and Putaway Operations

The speed and accuracy with which you receive, inspect, and store incoming goods directly influence your ability to meet customer demands.

Optimizing Receiving Operations

Features of warehouse management software transform the chaotic receiving process into a streamlined and controlled operation. By automating tasks such as generating receiving documents, capturing product details, and managing quality checks, you can reduce manual effort and minimize errors.

• Barcode and RFID Integration: Real-time scanning of incoming items ensures accurate product identification and tracking.
• Quality Control: Built-in inspection checklists and defect tracking help maintain product quality standards.
• Dock-to-Stock Efficiency: Guided receiving processes and optimized workflow maximize labor productivity.

Optimizing Putaway Locations

WMS software features inform the warehouse putaway locations based on item attributes and warehouse layout, significantly reducing travel time. The system suggests optimal storage locations based on factors such as item size, weight, demand frequency, and warehouse zoning. This intelligent placement minimizes travel time for pickers and maximizes space utilization by dynamically stocking products based on real-time data.

6. Multi-Channel Capabilities

In the United States, consumers are shopping across various platforms, from online marketplaces to direct-to-consumer websites. To stay competitive, 3PLs must efficiently manage orders from diverse channels. A 3PL WMS provides a centralized hub for handling orders, regardless of their origin. 

• Unified Order Management: A 3PL WMS lets you manage orders from different sales channels—such as e-commerce websites, marketplaces, and retail stores—within a single platform. Multi-channel capabilities reduce the need to manually reconcile orders from disparate sources, minimizing the risk of errors and delays.
• 3PL WMS Integration with E-Commerce Platforms: Out-of-the-box 3PL integrations with e-commerce platforms and marketplaces provide up-to-the-minute information on inventory levels. Statista estimates e-commerce accounts for 65% of order fulfillment in 3PL warehouses in 2023. Seamless data transfer eliminates data silos, ensuring accurate stock availability across all channels.
• Scalability and Flexibility: The adaptability of 3PL WMS is designed to scale with your business, accommodating increased order volumes and new sales channels seamlessly.

This makes it easier for 3PL providers to expand their operations and serve a broader range of clients. As a result, businesses can scale to offer various fulfillment options, such as ship-from-store, buy-online-pickup-in-store (BOPIS), and curbside pickup, pulling in more clients.

7. Robust Shipping Module

Shipping accounts for a significant portion of fulfillment costs, and customer expectations for fast and reliable delivery continue to rise. WMS software features

offer seamless integration with multiple carriers, providing you with the flexibility to choose the best shipping option for each order based on factors such as cost, delivery time, and carrier reliability. A study by NTT Data in the United States revealed only 58% of shippers are satisfied with their 3PLs’ IT capabilities, further making the case for a robust shipping module.

Investing in a 3PL WMS with a specialized shipping module can allow you to:

• Rate Shopping: Compare rates from different carriers in real-time, enabling you to select the most cost-effective option for each shipment.
• Carrier Integration: Seamlessly integrate with major carriers to transfer accurate data, automate label generation, and track inventory and shipments in real time.
• Label Printing: Generate shipping labels directly from the 3PL WMS, reducing manual effort and errors.
• Shipment Tracking: Provide your clients with real-time visibility into 3PL billing and the shipment status, nurturing a relationship based on trust and transparency.

8. Multi-Client Management

For 3PLs, McKinsey & Company estimates, multi-client fulfillment can lead to cost savings of between 7 and 9 percent, compared to dedicated fulfillment. However, managing multiple clients requires a high degree of organization, flexibility, and transparency.

A 3PL WMS with multi-client management module is designed to simplify these complexities, allowing you to focus on delivering exceptional service to each client. Bringing on new clients or parting ways with existing ones should be a smooth process. This module facilitates efficient onboarding by capturing essential client information, setting up user permissions, and integrating client systems. Similarly, offboarding clients is handled seamlessly, ensuring a clean handover and protecting sensitive data.

Achieving Client Success with Multi-Client Management

• Simplified Onboarding and Offboarding: Standardized modules and functional flexibility enable rapid client onboarding, reducing the time to start operations for new clients. This allows third-party logistics providers to easily scale operations to accommodate new clients without significant disruptions.

• Integration with Client Systems: E-commerce 3PL platforms provides real-time visibility into inventory levels, order statuses, and shipment details, enhancing transparency and operational efficiency.
• 3PL Billing Module: A comprehensive billing module that supports accurate and automated billing processes ensures that all transactions are billed, saving time and reducing administrative overhead.
• Client Interface for Transparency and Real-Time Updates: Most 3PL clients expect a client-facing interface for real-time updates into warehouse operations as a bare minimum. Clients can access real-time data on inventory levels, order statuses, and shipment tracking, improving communication and trust. Specialized 3PL WMS also enable clients to generate reports, monitor performance, and manage orders through a secure portal, reducing administrative overhead.
• Automating Invoicing of Clients: Automated invoicing capabilities allow third-party logistics providers to generate and send invoices based on predefined criteria. A dedicated multi-client management module ensures that invoices are generated consistently and accurately.

Hopstack WMS for 3PLs

We have designed Hopstack’s 3PL WMS to address the unique challenges faced by modern 3PLs in omnichannel fulfillment. With a high degree of flexibility and configuration in workflows, locations, and user management, Hopstack enables 3PLs to thrive in a dynamic and demanding commerce environment. Our client-facing interface encourages collaboration and two-way information sharing with over 60 out-of-the-box integrations to ensure your operation can be up and running swiftly.

Our 3PL WMS software features are tailored to meet the warehousing and fulfillment needs of 3PLs. From seamless multi-client management and robust shipping modules to advanced analytics and real-time inventory tracking, Hopstack provides the tools necessary to optimize operations and scale with ease.

Contact us today to schedule a demo and discover how we can transform your operations with our specialized 3PL warehouse management software.