Critical WMS Features for Third Party Logistics (3PL) Providers

Ability to deal with the complexities of “many to many”

Because third party logistics providers (3PLs) manage inventories for multiple customers at multiple warehouse facilities often at multiple locations with multiple users, the warehouse management system must be able to handle this level of complexity. Each 3PL client is unique, with specific billing criteria, contracts, business processes and requirements making operations extremely complicated. It is critical to select a flexible software that can adapt to the needs of your business and customers, not require conformity to the software.

Multiple ownership of the same item type occurs frequently and must be supported by the WMS software. Billing for each 3PL customer, based upon their own contracts and specifications adds an extra layer of complexity. In addition, each customer handles the payment of 3PL services in their own way and on a different schedule.

Using a warehouse management system developed specifically for third party logistics enables 3PLs to handle highly complex operations on multiple levels for a diverse range of clients. Because 3PL clients also have their own customers, data used in one operation is often transmitted to the next level. With multiple customers, vendors, suppliers, business processes and rules, it is essential to use a software that can handle multi-tenant architecture with diverse business process configuration.

Warehouse 3PL Data structure diagram

Ability to capture and bill for all services provided

Each 3PL customer is unique. Each has its own contract and billing specifications. Third party logistics providers need to have warehouse management software that is flexible and adaptable enough to accommodate the widely diverse requirements of an infinite array of clients. Many warehouse management systems were developed for private warehouses, and cannot handle charging for services typically accomplished by 3PL providers.

Because public warehouses charge for the services they provide, it is essential that the warehouse management system have the ability to capture and bill for all accessorial charges automatically. WMS systems that were not built for third party logistics providers do not have this ability. Without billing for all services provided, third party logistics providers lose out on revenue critical to their business.

Web portal

Today businesses operate around the clock and around the world. Third party logistics clients need to have the ability to maintain their business in this 24/7/365 world and require real time data visibility to do this. Providing a web portal for 3PL clients to view inventory, invoices, reports and other information gives your clients greater control over their business and provides them with the tools and real time information to make essential business decisions whenever and wherever they need it. Utilizing a web portal tends to increase client satisfaction rates while minimizing the cost of customer service labor, an excellent result for both the 3PL and its clients.

The web based private access must have proper security features to ensure that each user can only view information for their respective business. Multiple security levels allows online access and enable users to perform a variety of tasks involving their own inventory and business operations.

System Flexibility

Third party logistics providers need to be able to adapt their business to meet the dynamic needs of their 3PL clients so the warehouse management system of choice must be very flexible. Because 3PL clients often change their business processes, selecting a WMS provider that can make changes to workflows is ideal. Some of the most advanced warehouse management systems use Microsoft Windows Workflow Foundation to create workflows that can be changed without the necessity of making changes to static hard code programming, making changes to the system easier and less expensive to accommodate.

Ability to customize documents and labels

Every customer wants to maximize their presence and make their brand identifiable. Third party logistics clients expect to be able to brand their documents, labels and other business essentials with their logo. Third party logistics providers need to make sure that the warehouse management system they select can create customized Bill of Lading documents, labels, reports and more to satisfy the needs of their clients.

Integration and EDI capability

A state-of-the-art warehouse management system developed for third party logistics providers has the ability to handle EDI and integrate with multiple service providers, formats, mobile devices, e Commerce shopping carts, ERP systems and more.

Ability to track billing and revenue by customer

Third party logistics providers need to be able to assess whether the billing strategy used for each customer is effective or if money is being left “on the table”. Having this information can enable a 3PL to adjust accessorial and storage charges as well as other fees for each customer to ensure profitability.

Ability to onboard customers quickly and meet diverse needs

Selecting warehouse management software developed specifically for 3PLs, especially one which relies on workflow rather than hard coding enables third party logistics providers to on board new customers quickly and effectively, increasing potential revenue more easily. Without this feature, the ability to grow a third party logistics business is limited.