Key Benefits of Implementing a 3PL Warehouse Management System

Outsourcing warehouse and fulfilment operations to a third-party logistics (3PL) provider can provide numerous benefits for companies looking to improve efficiency, cut costs, and focus on their core competencies. A key part of the 3PL solution is the warehouse management system (WMS) that the provider implements to manage inventory, orders, shipping, and other critical warehouse tasks. Here are some of the top reasons to consider implementing a 3PL warehouse system:

1. Improved Warehouse Efficiency and Productivity

A top benefit of using a 3PL warehouse management system is improved warehouse efficiency and productivity. 3PL providers specialize in warehouse operations and leverage advanced WMS technology and processes to optimize the flow of inventory and order fulfilment activities. Their systems help streamline receiving, putaway, picking, packing and shipping in the most cost and time-efficient methods possible. By outsourcing to an expert 3PL, companies can focus resources on core business functions rather than warehouse management.

2. Lowered Supply Chain Costs

By improving warehouse efficiency and productivity, a 3PL WMS also helps significantly lower overall supply chain costs. The systems optimize space, labour and materials handling equipment to reduce operating costs. Additionally, the 3PL has far greater buying power when obtaining favourable rates on warehouse services, labour, equipment and transportation than any single enterprise could obtain on its own. This ability to drive major cost reductions is a huge factor in why companies outsource to a 3PL provider.

3. Improved Order Accuracy and On-Time Delivery

Order accuracy is critical in supply chain operations, as errors can severely impact customer satisfaction. By implementing strict quality control checks and optimized order processing supported by their WMS technology, 3PL providers achieve extremely high order accuracy of 99% or better. Their expertise and automated systems also significantly improve on-time shipment delivery performance. Companies that rely on their own less advanced warehouse systems and processes often cannot compete with the order accuracy and on-time delivery rates that the best-in-class 3PLs consistently produce.

4. Seamless Scalability and Flexibility

Market demand, strategic changes or other factors may require your warehouse operations to scale up or down quickly. Handling major fluctuations with in-house warehouse staff, systems, and infrastructure can be extremely challenging and costly. A 3PL with an advanced warehouse management system offers far more flexible scalability to seamlessly adjust to seasonal peaks, production ramps ups or any changing fulfilment requirements. The 3PL simply adjusts labour and materials handling equipment to match the needs at hand optimally. They also maintain extra capacity that can quickly be utilized when necessary.

5. Advanced Warehouse Management Technology

Implementing a highly advanced WMS on your own requires a major investment in software, hardware, setup and ongoing IT support. It is a huge project that diverts your focus and precious IT resources away from developing capabilities that differentiate your business. With a 3PL, all of that complex technology is already in place, optimized, upgraded regularly and managed by experts. You avoid the major hassle and cost associated with licensing, implementing and managing a sophisticated WMS and supporting IT infrastructure on your own.

6. Access to Specialized Warehouse Services

Some inventory may require special handling, such as refrigeration, oversized goods, hazardous materials or high-value products demanding special security measures. A good 3PL has facilities designed and equipped to handle all of these unique storage and processing requirements expertly. They provide customizable spaces and services tailored to specialized warehousing needs beyond what typical standard warehouse spaces can accommodate.

7. Improved Data Visibility and Reporting

Operating your warehouse limits visibility into accurate inventory counts, orders and shipments across the supply chain. A 3PL provider employs advanced WMS and warehouse automation systems that capture detailed data on warehouse transactions and activities. Integrations to other systems like ERPs and online client portals translate that data into valuable insights and reports for partners and clients. Enhanced inventory, order and supply chain visibility improves forecasting, optimizes future warehouse operations and provides the information needed to delight customers.

8. Enhanced Compliance and Security

For companies that store and handle food, pharmaceuticals, chemicals and other products with strict regulatory compliance rules, dealing with all the associated federal and state regulations can be daunting. By leveraging their expertise in operating compliant warehouse facilities, specialized materials handling equipment, and advanced tracking systems, a 3PL simplifies compliance. They also provide a much higher level of warehouse security than most organizations can achieve in-house to protect high-value inventory.

While modernizing warehouse operations on your own has challenges, partnering with a proven 3PL warehouse system provider powered by an advanced WMS can drive major rewards. It enables your organization to achieve peak warehouse performance and cost efficiency without major investments or operational risks. If your business requires significant warehouse operations for manufacturing, distribution or omnichannel retail, consider the benefits of outsourcing to a 3PL with specialized expertise in warehouse management.