Positioning Your 3PL for Omnichannel Fulfillment
As brands and retailers look towards the future, and potentially towards a Post-Covid era, many wonder how and if the accelerated changes to consumer behavior during the past 24 months will normalize. Many warehouses, and specifically third-party logistics (3PL) warehouses, will need to support their customers in their omnichannel, multi-marketplace strategy more than ever before.
Though the last two years have dynamically shifted buyers of all demographics towards online shopping, retail is not dead. Retail is going through a large disruption – but it's still growing. That’s right. All of those bar graphs you see that show the tremendous growth in ecommerce, should not be mistaken for retail shrinking.
Today, brands are working towards catching a new wave. They are working aggressively towards multi-channel positioning and retail is part of this. In doing so, they are expecting their fulfillment partners to support their positioning. Brands like Warby Parker, Amazon Fresh, and Bonobos are just a few that are at the forefront of redefining a customer-centric boutique style retail experience. As ecommerce brands explore retail, and brick and mortar businesses realize that they can't survive without taking advantage of the rise of ecommerce, the 3PLs that they work with will need to keep pace in providing true native omnichannel connectivity. Some things your customers will look to you for include: retail EDI connectivity, customer portals, multi-channel support, order management and warehouse management, and more.
Retail EDI Connectivity
Electronic Data Interchange (EDI) is a replacement for human-to-human communication like paper documents, email, or phone calls, with specifically formatted electronic documents that can be transmitted automatically between systems. These documents are named with numbers such as 850 (Purchase Order) or 856 (Advanced Ship Notice). Each EDI document contains actionable information like invoices, remittance advice, purchase orders, fulfillment orders, advanced shipment notice details, inventory levels, and new item details that can be used in a warehouse management system (WMS) with an integrated EDI solution to electronically create and execute on the contents of each form.
Use of EDI helps mitigate errors, slow communication, mis-shipments, retail chargebacks, or noncompliance issues by eliminating the need for human interaction in these processes. A fully automated solution allows for one system, the WMS, to be the source of truth, interpreting transactional data, as well as generating compliance documents like UCC 128 carton labels and packing slips.
Customers that warehouses service will continue to need, more likely more than before, consistent visibility on how quickly their inventory is moving, reorder points, and general throughput key performance indicators (KPIs). Having a built-in customer portal allows warehouses to provision specific access to their customers based on where in the fulfillment process they need visibility.
A true omnichannel approach requires that warehouses are working to support customers in their direct to consumer (D2C) as well as business to business (B2B) fulfillment streams. As they support these workflows, warehouses will require a technology stack that sends and receives orders through multiple channels, in one place, and is able to dynamically sort and process those orders in a seamless manner.
OMS and WMS Functionality
As shipping times get more competitive, brands and retailers will have to work closely with 3PL partners that have a fulfillment network, shipping from locations close to a final destination. This strategy allows brands to ship inventory to their customers or even retail locations cheaper and faster. In addition to this, your customers will expect that their order management system (OMS) is either connected to your WMS, or that you have an OMS solution that can route and split orders, calculate cost of goods sold (COGS), manage listings and pricing, as well as handle order fulfillment through traditional WMS functionality.
Native Connections to EDI Service Providers –
EDI service providers often offer transportation services like a V.A.N. but also sometimes translate data between trading partners. For example, if a system like an enterprise resource planning (ERP) can only output a flat file, an EDI service provider can, in many cases, take that file and turn it into an x12 compliant EDI document. For customers that don't have EDI capability, EDI service providers allow for various functions like importing data to convert to retail compliant EDI files and thus are allowing for smaller brands to enter the retail space.
How to Learn More about Supporting Omnichannel
In the dynamic times we live in, commerce continues to change drastically. 3PL warehouses that position themselves strategically with the right technology and partners will continue to remain competitive in the growing retail landscape. 3PL Central remains the thought leader in fulfillment solutions in the WMS and OMS space. Reach out to us here to discuss your 2022 fulfillment strategy.
Written by Alnoor Bhamani
Alnoor is the Director of Solutions Engineering at 3PL Central, who works with 3PL warehouses all around the country to help them find software and solutions to fit their individual needs. He believes there's no single 'one size fits all' to warehouse management, and works to understand their business while also providing best practice insights from the successful 3PLs he's worked with in his career.