IT is one of the many elements that distinguish a 3pl company from its competitors and affect execution quality (and cost). Supply chain management has proven to be a complex undertaking requiring advanced system integration, customized software programs, and real-time information processing capabilities.
A comprehensive approach includes demand forecasting and business intelligence, logistics IT systems for efficient operation and transportation control, warehouse management systems with RFID tracking technology and inventory optimization, and improved supply chain collaboration which will lead to lower costs for operations. The next few sections will discuss these elements in detail.
Types of 3PL Services
Many providers offer 3pl services such as all-inclusive solutions, hybrid solutions (halfway between 3rd party logistics and in-house warehousing), and full outsourcing. All-inclusive solutions will enable you to outsource everything, from sourcing raw materials and managing inventory to sales rep orders. Hybrid solutions will leave the responsibility for logistics management with your company, but they can source materials for you while offering advice on maintaining stock levels, etc. Finally, full outsourcing is when the 3pl manages every aspect of operations, including forecasting demand, packaging products, shipping them off to the next stage in the supply chain, and keeping track of everything along the way.
Companies employ these types of 3PL services based on their needs which depend on the size of the company and its complexity. For example, a large manufacturer which processes products in millions per year will need to keep track of inventory levels, ensure that raw materials are transported on time to their plants, and ship finished goods at the right shipping deadlines. In this case, 3pl services can help by guaranteeing that orders are delivered on time and with a high level of quality control.
Types of Connectivity Between Shippers and 3pl Companies
Most 3pl companies have their own software that enables them to collaborate with shippers. Such software connects the logistics service provider and its client through a cloud-based system, enabling real-time data flow back and forth between the two parties. Without it, transactions would be complicated; for example, without such connectivity, your company could ship a product to a 3rd party facility, but there would be no way for you to track how the item was handled or where it is at any given time.
To make things even more complex, you will also need to create interfaces in your own IT infrastructure and integrate with carriers who provide transportation services, and integrate with suppliers who transfer raw materials.
Shippers should always keep an eye out for everything taking place in the supply chain software solution. The most common way to do this is through various forms of collaboration with 3pl providers and their software, which should be easy to use and capable of providing users with real-time information about the status of shipments.
The IT systems have several components that should always work together seamlessly:
1) Demand Forecasting Software – enables efficient forecasting of volume by considering such factors as expected customer orders, seasonal trends, and relationships between product variations in demand. In addition, it will optimize processes such as material acquisition, packaging, etc., to help increase productivity while maintaining high-quality standards throughout the supply chain.
2) Warehouse Management Systems – provides warehouse workers with the ability to track electronically items stored in their facilities, thus making it possible for them to locate products required by shippers.
3) Inventory Optimization Software – enables managers of 3pl companies and logistics providers to find out what goods are available for shipment at any given time. It will consider current market trends, sales forecasts, and planned orders, which helps determine whether a particular item is worth keeping or should be returned to raw materials suppliers, who can then produce more stock. This is important because if your facility has too many inventory levels, you may end up paying for storage space while at the same time not being able to satisfy customer demand due to limited production capacity. On the other hand, insufficient inventory levels mean orders may not be fulfilled on time or at all.
4) Order Management – enables firms to efficiently manage and track incoming customer orders, providing users with an overview of the actual situation in real-time. Such software enables 3pl companies to optimize processes such as raw materials acquisition by indicating when suppliers should be made aware of new customer orders. It also integrates with inventory management software. When it determines what items are available for purchasing, it will automatically order more raw materials from suppliers once a threshold limit is reached.
The Best IT Solutions in Supply Management for 3pl Operators
1) Inventory Optimization Software – enables managers of 3pl companies to find out what goods are available for shipment at any given time. It will consider factors such as current market trends, sales forecasts, and planned orders, which helps determine whether a particular item is worth keeping or should be returned back to raw materials suppliers, who can then produce more stock. This is important because if your facility has too many inventory levels, you may end up paying for storage space while at the same time not being able to satisfy customer demand due to limited production capacity. On the other hand, insufficient inventory levels mean orders may not be fulfilled on time or at all.
2) Demand Forecasting Software – enables efficient forecasting of volume by considering such factors as expected customer orders, seasonal trends, and relationships between product variations in demand. It will optimize processes such as material acquisition, packaging, etc. to help increase productivity while maintaining high-quality standards throughout the supply chain.
3) Warehouse Management Systems – provides warehouse workers with the ability to track electronically items stored in their facilities, thus making it possible for them to locate products required by shippers.
4) Order Management – enables firms to efficiently manage and track incoming customer orders, providing users with an overview of the actual situation in real-time. Such software enables 3pl companies to optimize processes such as raw materials acquisition by indicating when suppliers should be made aware of new customer orders. It also integrates with inventory management software so that when it determines what items are available for purchasing, it will automatically order more raw materials from suppliers once a threshold limit is reached.
5) Transportation Management Software – allows for better transportation management through integration with logistics providers such as trucking companies, railroads, etc. It ensures timely delivery of products without loss and damage during transport while monitoring the location of vehicles at all times. It also allows users to communicate with drivers, for example, by sending them text messages regarding the status of a shipment.
Conclusion
These five software programs can optimize processes such as raw materials acquisition by indicating when suppliers should be made aware of new customer orders; ensuring timely delivery of products without loss and damage during transport while monitoring the location of vehicles at all times; enabling firms to efficiently manage and track incoming customer orders providing users with an overview of the actual situation in real-time.
