Warehouse Management

3PL Software: What it is and who should use it?

by Matt Corby, 5 July 2021

An essential guide to modern 3PL software.

Third-party logistics (3PL) is complex. Frustratingly so, sometimes.

There are so many moving parts and other parties to communicate with. And so much to keep track of: goods, drivers, trucks, customers, consumers, invoicing, tracking, it goes on…

Are you still doing this with manual, paper-based systems? Well, this article might show you a better way. Increased efficiency, better communication, faster deliveries, and a highly visible supply chain. Let a fully-featured 3PL software work for you, and reclaim control of your time and business.

Let’s take a look at the software. What is it, who might use it and what can it do for your business?

What is 3PL software?

If you’re in the logistics game, then you know there are typically three arms to an Australian supply chain. First, the product’s creator. Second, a large shipping company to truck those products. And lastly a third-party logistics company to hold the products and get them onto the trucks.

A 3PL provider is usually set up as a warehouse or distribution centre, commonly known as a DC. It houses consumer goods and handles the distribution required for deliveries to land on people’s doorsteps. They’re usually set up in central locations where there are high shipping volumes with scores of trucks coming and going.

There’s a lot of moving parts by now, isn’t there?

With all of these separate parties involved in the supply chain, there needs to be away for them to communicate quickly, effectively and accurately. There also needs to be a simple way for 3PL providers to manage the logistics involved with warehousing and fulfillment.

And this is where 3PL software comes into play.

3PL software automates, speeds up and smooths out the process for both the 3PL provider and the vendors who hire them. For the vendor, it will help them communicate better with the 3PL provider they work with. And for the provider, a full-featured 3PL software will improve their warehousing,
distribution and customer communication.

The entire supply chain becomes faster, less laborious, more visible and more efficient. And that puts more dollars back in pockets.

Now let’s take a look at who might use 3PL software, and exactly how you can make the most of it.

What kind of business might use 3PL software?

Warehouses: whether you work for the product creators directly, or a third-party provider, 3PL software will help you manage your inventory more quickly and accurately.

A comprehensive 3PL software has functions that are designed to:

  • Automate orders with shopping cart integrations
  • Track items within your warehouse
  • Automate customer notifications

Distributors: 3PL software enables you to turn orders around incredibly quickly and with easy communication. A distribution centre generally holds products for a shorter amount of time than a warehouse will, and this speed and agility is essential to retaining customers.

3PL software improves distribution with:

  • Barcode scanners to track items
  • Customer portal with inventory, billing and reporting information

A fully-featured software will service two kinds of 3PL business

3PL businesses can be asset-based or non-asset-based, and 3PL software needs to work for both.

Asset-based 3PL providers own some or all parts of the supply chain, like trucks, warehouses and distribution centres. These businesses will need software with a broader range of features to handle shipping, fleet management and warehouse management.

Non-asset-based 3PL providers don’t own any physical assets within the supply chain. They act as a third party, providing access to an established network of partners involved in moving goods. In Australia these non-asset-based 3PL providers are often referred to as Freight Managers, and they require their software
to be more focussed on booking freight and communicating with their network (as opposed to warehouse management).

So, what are the features that allow all of this to happen? And what do they mean for you?

3PL software features

A full-featured 3PL software has many functions, all focussed on improving your business by increasing efficiency, visibility and profits.

So how does that happen?

Let’s go through just a few of the features that help.

Automated invoicing. Invoicing and billing features of 3PL software allow you to track and invoice for every service you provide. You can even automatically generate and send invoices. Now how much time and labour will that save you?

Customised workflows. As a 3PL provider, your clients will have a large variety of needs. They might design products with barcodes or RFID tags (for easier identification at the distribution centre), or they may have no tracking technology at all. Obviously, these two clients will need your staff to perform a very different set of actions. With 3PL software, you can customise your workflow to suit your differing clients. Your staff will be able to work faster, saving you time and labour.

Powerful analytics. Measuring results with manual writing and hard copies is time consuming and often ineffective. The tedious process makes it hard for you to optimise your teams’ performance for efficiency and quality. 3PL software can show you powerful, automated data to give you real insight into your performance and, importantly, show you where you can improve.

Fleet and transport management. This is a non-negotiable, isn’t it? A full-featured 3PL software allows you to conduct dispatch and load planning as well as order management, rating and billing.

Trends related to third-party logistics

There’s no doubt about it, third-party logistics software has led to innovation within the supply chain and in particular, within 3PL networks. There are two significant trends worth keeping an eye on.

Mobile solutions. You’re in the logistics game so you know that supply chain operations are incredibly mobile. Thankfully, gone are the days when you needed to take notes and update the software back to the desktop. Modern cloud-based solutions allow you to update supply chain activities on the go and in real time (and this is how you increase visibility, efficiency and speed).

AI tracking. Many businesses now attach IoT sensors and RFID tracking to their shipments. When the shipment arrives, your 3PL software accounts for it automatically. AI can also: perform analytics, learn to anticipate demand and help you stay on top of fleet maintenance.

Wondering how this software can help you?

We’re all in for an interesting future when it comes to the benefits of software for 3PL. If you’d like to talk about how our software can help you keep up with these rapid changes (and those yet to come), get in touch or call us for a chat today. We are here to help.

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