A surge in third-party logistics (3PL) warehouse demand has occurred since the beginning of the pandemic. As a result of such growth, 3PLs of all sizes have been seeking new ways to manage their businesses, and in most cases, that means optimizing warehouse operations. Here are three areas 3PLs should focus on as business levels continue to rise.
#ShipTip: 3PLs have different supply chain management models depending on their niches and specializations, which means that their management styles might differ from those of many "typical" 3PLs. If you have trouble creating an effective warehouse management strategy, speak to your current supply chain expert or check out our 3PL Warehouse Management Partners, here.
(1) Keep Organized
Warehouse management relies heavily on organization and cleanliness. An organized warehouse helps reduce errors, keeps clients and customers informed on inventory changes, and reduces injuries.
Why Organization Matters
Typical 3PLs operate multiple e-commerce businesses in the same facility. Maintaining physical separation between companies is crucial to ensure that employees are packing the correct items every time. Separating these businesses in terms of technology and space is crucial. The employees can recognize immediately if an item does not belong to a section by creating separate labels for each section. Owners of warehouses understand that space is not unlimited. It is imperative to utilize vertical space and organize up and not expand out. Despite possible difficulties with quick pick-and-pack, this can help you maintain space and grow your business. The goal is not to keep everything out of reach, but to have extra inventory on hand to pull in as needed. As a result, an efficient workflow can be established, and valuable space is saved.
Adapt Lean Inventory Practices + Reduce Clutter
As a 3PL, you are not always in control of how often your inventory moves in and out. You can educate your customers about maintaining a lean inventory as part of your warehouse best practices. By keeping a lean inventory, you are ensuring that you only keep what you need and nothing more. This will result in fewer products to handle and less inventory to store in your warehouse. Additionally, regardless of the type of workplace, clutter can be a major issue. It is important to sort the inventory arriving in the warehouse and remove the cartons or boxes from which orders came. Your warehouse containers will likely have the same appearance and use the same internal features if you have a system you like to use. Random boxes will only lead to confusion and further errors when you add them to the equation.
(2) Keep Up With Inventory
Maintaining inventory involves more than just the obvious. It is imperative that you become hyper-focused on the inventory levels of every enterprise that falls under your 3PL umbrella. For example, pick-and-pack errors are inevitable even in the most efficient and organized warehouse. In order to analyze your warehouse supply chain and train employees to reduce errors and costs in the future, take the following into account:
LIFO or FIFO
Does your warehouse operate on a last-in, first-out basis or a first-in, first-out basis? As a 3PL, you may have enterprises specifying exactly what type of accounting and process they would like, but you also must understand your position as an organization. In the case of interchanging products, you might not be able to use this type of accounting system, but it could simplify and organize your inventory.
Do you have a specific SKU or labeling process? It is common for 3PLs to label their products so they are interchangeable with your inventory management and fulfillment technology. When labels are incorrect, inventory is misplaced, products are put into the wrong boxes, and your system fails, it can be disastrous. Choosing a labeling system that allows for easy tracking and storage is most beneficial.
As opposed to doing inventory counts once a year, your inventory should be cycled. Cycle counting refers to the practice of counting inventory more than once during a given cycle. Whether that cycle is once a month, quarter, or any other period, it's important to keep up-to-date with inventory checks. Syncing your online and physical systems is made possible by this inventory application.
(3) Leverage Technology
Technology is the final piece of the puzzle for 3PL total dominance. Dramatic? Maybe. True? We believe so! A good technology stack will assist you in managing your warehouse and lead you to become an industry expert
Software Built to Handle 3PLs
The concept of 3PL-tailored software usually refers to an Order Management System (OMS), a Warehouse Management System (WMS), or an Enterprise Resource Planning software (ERP). All of these offer specific benefits to a 3PL.
Businesses can use an OMS as part of a stand-alone integration or integrated into a shipping API, allowing them to manage all aspects of their fulfillment processes and inventory at the same time. For businesses with a lot of moving parts, various inventory, and the need to keep consumers informed about inventory levels, OMS is a great tool. Among the benefits of a WMS is that it enables companies to supply and regulate warehouse operations through software that tracks goods from the moment they arrive to the moment they depart, thereby allowing for improved warehouse organization and streamlined business operations. And finally, the use of ERP software automates business functions such as production, sales quoting, accounting, and more by implementing an integrated software suite.
Though they are valuable, depending on which one you choose, they often don’t offer the extensive fulfillment functionality 3PL warehouses require to optimize their shipping process, especially when fulfilling orders for multiple clients. This is important for 3PLs who can ship for hundreds of different e-commerce brands. Using 3PL-specific software packages, such as Camelot 3PL or 3PL Central, allows 3PLs to differentiate between multiple businesses and providers.
How Can You Take Your Stack to the Next Level?
There are very few types of technology that will seamlessly integrate with an OMS, WMS, and ERP to help warehouses improve automation. In short, the answer lies in a shipping solution. When high-volume shippers are seeking to implement sophisticated and customized workflows that optimize the management of inventory as well as the shipping costs associated with the fulfillment process, dedicated shipping software is necessary. However, when it becomes obvious that you need additional shipping functionality, the concept of tearing down your existing technology stack to replace it can be very frightening. If you wish to ensure that your shipping software is successful, it must be fully integrated with your existing systems. DesktopShipper can do just that. With DesktopShipper, you can configure workflows for multiple brands using features like profiles based on how you store data and how you serve your customers. Create and automate custom packing labels and slips, access real-time rate shopping to save on costs, and adjust business rules for carrier mapping and batch management - all of these features integrate into your already trusted WMS, OMS, and ERP systems, allowing for your whole company to run it’s shipping strategy flawlessly.
The third-party logistics industry is growing, but the truth is that there is still a lot of room for improvement. Whether you're an established or new 3PL, now is the time to get organized. The warehouse is the heart of your business and it is imperative that it be kept in good working order.