3PL Warehouse System

Mar 07 2022

A 3PL Warehouse System that Works for Your Business

A 3PL warehouse system is essential to managing and controlling your businesses inventory. At Accion Performance we offer a world-class warehouse system that eases the burden on your business. Click to talk to our team, today. 

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3PL Warehouse System

The business world is rapidly changing as technology advances impacting many management systems such as the supply chain operations and mainly the warehouse. This department is responsible for storage, processing, accurate handling, and timely delivery of goods. However, today many companies outsource these activities to third-party logistics (3PLs) and warehouse systems.

3PL Services

3PL warehouse systems are strategic services offered by an external company for managing warehousing, logistics, and supply chain operations in your business. The 3PL services help your company simplify supply chain management by streamlining the processes to boost success. In addition, these 3PL solutions also integrate warehouse management software.

The most common third-party logistics services include,

  • Contract/Public Warehousing
  • Distribution Management
  • Freight Consolidation
  • Freight or Transportation Management that includes freight accounting claims services and technology.

Most 3PL companies combine these services to provide one package or a few but well-defined options for diverse organizations. Moreover, the main goal for all third-party logistics is to understand your supply chain needs and offer lasting 3PL solutions enhancing your company's operations.

Still, it's worth noting that not all 3PL companies are created equal. While they may provide similar or related services, it primarily depends on your company's goals and outsourcing needs. Most businesses are looking for either transactional, strategic, or tactical outsourcing.

Large companies may look for a combination of the three or a successful long-term relationship, whereby strategic outsourcing services are the best. But for small organizations, if it's a one-time shipment, for example, a transactional third-party logistic outsourcing is ideal.

Also, the software involved makes the process manageable, making it easy to track goods for multiple clients and keep the supply chain data organized. Engaging a successful 3PL company can significantly increase your organization's customer satisfaction and productivity. However, understanding the types of 3PL services available and fit for your company is a key factor for consideration.

Types of 3PL Services

3PL providers have been around for years, and many business owners must have worked or interacted with a few. Any reliable third-party logistics provider uses strategic approaches like a simple warehouse management system to handle inventory and other supply chain operations.

Over the years and as the business field advances, 3PL solutions have broadened, categorizing the providers differently.

There are four 3PL services available, and your choice depends on the uniqueness of your business. These mainly include,

  • 3PL Customer Developers

This service provider takes over an organization's logistics operations at the owner's request. Third-party logistics customer developers may be expensive to hire due to the huge amount of work, responsibility, and personnel involved. They are also not very common. However, they are the largest companies.

  • Standard 3PL Providers

These 3PL services provide minimal solutions like transporting and storage of products. If you are looking for basic 3PL solutions, consider these standard services providers. It's also the ideal 3PL for a small business USA. These service providers offer a very low-cost option, especially If your business is on a tight budget.

  • 3PL Customer Adapters

These types of 3PL services handle almost all logistics operations of your company. They manage shipping processes from the start to the end and provide maintenance rates. The 3PL solutions also include negotiation with carriers.

You can access a simple warehouse management system such as transportation as a client. It may even allow you to customize shipments as desired. However, this access remains at the company's discretion.

  • 3PL Service Developers

3PL service developers offer standard shipping and storage but provide additional IT management and infrastructure. The company's 3PL services also include reliability and safety value-adds like compliance management, security, and shipment tracking.

Other service features include cross-docking from an incoming truck into an outbound truck with minimal storage usage and package selection.

What is 3PL

In third-party logistics or 3PL, businesses outsource logistics processes to a third-party company. However, an enterprise takes the responsibility of maintaining management oversight. 3PL has replaced the traditional business model where the company handles all its operations in-house. Many eCommerce companies outsource third-party logistics services to work with pros as they focus on growth, marketing, and customer satisfaction. Third-party logistics will pick, pack, and ship your products to your customers.

Order fulfillment is very vital for the success of every eCommerce. Different third-party logistics businesses specialize in different kinds of order fulfillment. Some specialize in transporting cold fulfillment, which involves storing and shipping food products that need to be frozen or refrigerated. Other 3PL logistics companies are well-equipped to store and transport hazardous materials.

But, what exactly is order fulfillment? 3PL order fulfillment involves the physical processing of customers' orders. It includes processes from storage to shipping, including order acceptance, storage, product maintenance, inventory management, packaging of goods, franking of goods, and shipping to the customer. It also involves the management of returns from the customers. When order fulfillment runs smoothly, customer satisfaction is attained, and business grows.

3PL vs. 4PL

When searching for 3PL, you may encounter other logistics business models like 4PL. The first question that comes to mind is, What's the difference between 3PL and 4PL. A 3PL manages the outsourced logistics and distribution activities of a business. 3PL may provide additional services like boxing, crating, and packaging for an efficient supply chain.

4PL plays a bigger role in the supply chain. Apart from assuming the same roles as that of third-party logistics providers, 4PL also helps their clients to reach their goals. In fourth-party logistics, the manufacturer outsources both the organization and management of their supply chain. For instance, a manufacturer will outsource logistics, packaging, warehousing, and shipping to fourth-party logistics to focus on other business aspects. With 4PL, you will enjoy more comprehensive management of operations, information technology, and solution-oriented strategies. Understanding the key difference between 3PL and 4PL will help you make the best choice according to the business needs. Some of the notable differences include:

  • 4PL companies are convenient for medium-to-large businesses, while 3PL is more recommended for small-to-medium businesses.
  • 4PL providers may own warehouses and trucks, while 3PL companies don't own these assets.
  • 4PL can effectively manage and coordinate 3PL providers' activities.
  • 4PL companies provide high-level logistics services compared to 3PLcompanies that provide one-off logistics services.

Role of a Third-party Logistics Company

Choosing the right logistics providers who will meet all your needs and work within your schedule and budget can take some time. However, understanding the pros and cons of a third-party logistics company can help you pick a reliable company you can trust with your inventory. What role do third-party logistics companies play?

3PL companies provide supply chain processes for various businesses. They specialize in transportation and distribution processes and may customize their services to fit the needs of every client. Third-party logistics companies take care of their customers' inventory management, allowing them to focus on their products and other business aspects. Instead of doing everything in-house, you can hand over processes related to fulfilling orders to 3PL. Apart from taking the logistics burden off your shoulders, 3PL can help you save money and time by supplying enough staff to handle picking, packing, and shipping.

3PL Companies

Using 3PL companies for your supply chain operations provides unique benefits such as warehouse management software and other organizational platforms. The third-party logistics companies also have different service features that fit your company's needs. Some characteristics include,

  • Distribution and warehouse based 3PL service companies
  • Transportation based 3PL services
  • Management and shipment based 3PL service providers
  • Forwarder based third-party logistics companies

Most 3PL companies are specialist businesses offering a wide range of supply chain-based operations and management solutions. While they provide these unique benefits, the companies are usually ranked based on performance, revenue, employees, and other business-related metrics. The rankings are generally yearly, such as the top 3PL companies 2021.

Worldwide, there is an overwhelming amount of 3PL companies. To understand the best 3PL service providers for your business, you should consider the top-ranking companies. For instance, the list of top 3PL companies 2021 include established companies such as,

  • C.H Robinson Worldwide
  • XPO Logistics
  • DHL Supply Chain
  • Kuehne + Nagel Americas
  • UPS Supply Chain Solutions
  • J.B Hunt Transport Services

If your company needs any delivery to its customers, the most convenient option is outsourcing logistics. Getting the best and most reliable 3PL company should be the first step. By searching top 3PL companies in 2020, you will get a list of companies doing well in the 3PL industry. These companies invest in technology to increase efficiency and meet rising customers' expectations. With the uncertainties in the business environment caused by the pandemic in 2020, many logistics providers were forced to make critical decisions and take action to maintain a positive impact in the industry.

Some of the 3PL companies leading in the industry in 2020 include well-known companies in the 3PL niche. Some of them include:

  • C.H Robinson
  • XPO Logistics
  • UPS Supply Chain Solutions
  • J.B Hunt
  • Expeditors
  • DHL Supply Chain

Apart from ensuring the flow of goods to the customers, these top 3PL companies leverage technology and manage information for efficient supply chain processes.