Building Out Your 3PL Warehouse Technology Stack

Date: March 17,2021

When a customer thinks of a brand, they see and feel the overall sum of services that brand provides. To ensure a company can make good on their brand promises, it is crucial to have the right tools and technology that will allow customers to thrive. At the same time, businesses require infrastructure to manage the business, improve operations, and provide real-time customer service.  

If you are running a third-party logistics (3PL) warehouse tailored for ecommerce merchants, you need technology with the most current shopping cart connectivity, integrations, and functionality. Successful 3PLs not only have up-to-date technology, but excellent customer service as well, so it is important to select 3PL technology that provides an excellent customer service component.  

As a warehouse management system (WMS) implementation manager, I have seen first-hand when 3PL warehouses realize how efficient they can become with the right application of technology. I have seen this for all types of 3PLs, from a new ecommerce fulfilment startup with just a few employees to an established warehousing and transportation company. Every customer I have worked with benefits from comprehensive warehouse technology solutions. In each case, an application of the right technology can increase efficiency to the point where the ability to take on more business becomes a reality. 

What 3PLs really need to prove to their customers is that they have the ability to meet the demands of an increasingly technology- driven world and provide easy access or integrate into complex systems like today’s on-line shopping carts and marketplaces. Every customer a 3PL brings on is unique. No two customers will be exactly alike. A technology stack that can provide the versatility to customize services for each customer is vital. So too is the ability to scale your business to take on more customers.

Leveraging Technology to Enable Warehouse Growth

Without the right technology infrastructure, there simply isn’t a way to keep up with the demands of the rapidly growing ecommerce fulfilment industry. As the 3PL warehouse industry has become more competitive, the pressure to drive down costs has been unrelenting. Based on feedback from the Third-Party Logistics Warehouse Benchmark Report, 87% of 3PLs report adopting a WMS as the backbone of their technology infrastructure, with 68% reporting time savings of 11+ hours per month upon implementation.

Having the right WMS technology in place will keep costs down by optimizing workflows on both the receipt and order picking sides of your business, as well as eliminating errors with a paper-based picking system, as opposed to a non-paper based mobile solution. With the WMS as the backbone, 3PLs can easily integrate with other key systems to build a highly optimized solution. 

Recent growth in ecommerce has opened a wide range of opportunities for ambitious 3PLs. Just about all shopping carts offer all-in-one ecommerce shopping and payment services, and many serve as order aggregators, allowing ecommerce merchants to access ever wider markets through multiple shopping channels. 3PLs that take this on for their customers need a warehouse management system that can connect with those ecommerce platforms in a seamless way. Just as important, automating inventory updates across each of those selling channels means warehouse customers can focus on their business instead of managing inventory across each one.  

Access to these services will enable your customers to thrive, so it is essential that your business can handle the growth administratively and operationally. Finding a platform that can connect to various billing and invoicing services while having the ability to supply real-time information, as well as automated messaging, means less time researching and collating information and more time honing your operations. 

Along with growth comes the need for industry-best practices to drive both efficient order management and pick and pack operations. It is essential to have the right technology in place to allow for rapid receipt of inventory as well as accuracy during the picking, packing, and shipping process. 3PL warehouses are successful only when their customers are successful. They must have the ability to scale quickly and efficiently. 

How the Right Technology Helps Warehouses

 As a 3PL, you are the hub that connects a multitude of supply chain activity in a central location.  The ability to plug into platforms that feed your customers' business is essential. This is where building out your technology stack in the right way makes the difference. 

The right technology stack will enable integration with all the platforms necessary to provide a positive customer experience. Choosing the right technology to maintain pace with a rapidly changing technical landscape is also essential for growth and competitive advantage. 

Let's sum up the ways technology plays a significant part in your 3PL service offering.  

Connectivity, to platforms that drive your customer's business, leads to more clients. I have seen 3PLs, brand new to the business with a single client expand to several ecommerce clients within the three months we were on-boarding. They could provide an assurance that they could fulfill shopping cart orders within a few days after their agreement, and as soon as the inventory arrived at the warehouse. So, the key features to consider when selecting a 3PL technology geared for ecommerce retailers are operational capabilities and channel connectivity. 

Administratively, software that captures and automates billing for the services provided and the ability to integrate with a variety of billing applications should be carefully considered. Security and control of who sees what is in your warehouse is vital to your customers.  

Operationally, software that drives each part of your workflow to maximize efficiency will facilitate growth. Customer service oriented 3PLs have a distinct advantage. Software that allows for real-time visibility and communication with your customers and the ability to provide your customers with access to their inventory will set you apart from other 3PLs. 

Scalability, 3PLs that can grow with the demands of their customers will not only survive but thrive in today’s ecommerce environment.  

Keeping Pace with New Technology

Supply chain management, and specifically third-party logistics, has become one of the fastest growing industries in the world. Keeping pace with the technology driving that growth may be the most import planning decision you make in 2021. Consider the various systems and software that make up the logistics and supply chain industries today. You will need a technology platform that can scale your business and help navigate complexities and changes that will continue to occur as the ecommerce and omnichannel fulfillment markets grow. And we are just at the beginning, so choose software that will build out your warehouse technology stack wisely. 

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Saul Lipenholtz

Written by Saul Lipenholtz

Saul Lipenholtz is a Sr. Implementation Manager at 3PL Central. He has over 10 years of experience supporting 3PL businesses with the implementation of WMS software and technology. Saul has guided hundreds of warehouses through setup and optimization of their warehouse management software to increase efficiency and facilitate growth. He is passionate about technology and how it can be applied to create real-world solutions and drive results.