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Success for a 3PL is ultimately measured by loyal customers. Efficient, cost-effective order fulfillment, along with real-time analytics and meaningful reporting, are the keys to customer satisfaction across the board.
Every business that fulfills customer orders needs smart warehouse management. When that business is a 3PL, the need multiplies, just like the number of companies that use its services.
Success for a 3PL is ultimately measured by loyal customers. That loyalty is earned when their customer’s customer is happy. Efficient, cost-effective order fulfillment, along with real-time analytics and meaningful reporting, are the keys to customer satisfaction across the board.
Are these lofty goals? Sure. Are they achievable? Absolutely. After all, we are living in the era of more intelligent warehouse management.
A smarter warehouse isn’t just one that cranks out the most orders (although handling high order volume is surely part of it). Smarter, in this context, means using all of the tools available to fulfill those orders faster, with fewer mistakes and accidents. In other words, maximizing efficiency.
To do this for multiple customers, products, and processes at once, 3PLs must rely on a warehouse management system that can eliminate guesswork and overcome human limitations.
But a smarter warehouse is more than just plugging in a new piece of software. It takes a whole new mindset. The ways in which a successful modern 3PL interacts with its clients and its end customers are changing with new technology.
For example, 3PLs are changing with...
A 3PL warehouse that hasn’t automated everywhere possible is not working at its full potential. A wide-ranging number of different types of products is the name of the game for 3PLs. Receiving, storing, and fulfilling orders for each of them is a huge challenge. One warehouse could handle items as diverse as clothing, cosmetics, and frozen foods. In order to thrive and scale, 3PLs must automate.
WMS automation features are essential to streamline the process. They can determine the most efficient layout for the warehouse, plan out the best picking method and pickpaths, and schedule the workforce needed to fulfill upcoming orders.
Barcode scanners are a simple, yet smart, way to automate inventory tracking from the moment items come in the door until they leave. Even smarter is software that will pinpoint perishable stock on the shelves that is nearing its expiration date. Smarter still is a process to automatically pick, dispose of, and update inventory for those items, and automatically place an order for their replacement.
A WMS that uses machine learning for forecasting will make a 3PL’s warehouse management smarter. The system takes every piece of data and learns from it, allowing it to accurately predict what will happen next.
For example, 3PLs can gain valuable insight into product velocity and buying patterns with predictions made via machine learning. Anyone who has ever shopped online has seen an example: Order a pair of sunglasses, and be offered cases and cleaning kits. Machine learning has predicted that these items sell successfully together. Those insights might even suggest ideas for kitting, allowing the 3PL to act as a full-fledged fulfillment consultant.
Machine learning and automation together help 3PL managers by offering additional choices or next steps. For example, say there are only 10 of a certain item left on the shelf. A dashboard might give this information, but smart warehouse management will send an alert so no one needs to manually check the number. Smarter still would be a prompt asking if they would like to order more from the supplier. A fully automated, intelligent WMS might place the order on its own, based on machine learning indicating that the product will indeed be in demand. It might even adjust the quantity based on seasonality or other analytics.
3PL managers can set their own parameters for how much or how little machine learning drives decisions.
Because of the variety of items and variables, such as kitting and value-added services, that 3PLs deal with, packing and shipping are an area that must be as smart as possible. But take a long look at warehouse processes, and you’ll see that smart decisions actually start earlier in the process—in determining storage, for example. Items that go together or are often sold together can be kept in close proximity, making the picking step more efficient. Predictive analytics aid in setting up forward picking stations for items that are accessed most often.
When it comes to packing, employees do not need to eyeball an order to determine what size box to use. Smart WMS software will do it for them with the use of a DIM weight scanner that measures and weighs items automatically. WMS can automatically calculate proper cartonization, saving time and cutting down on wasted packing materials.
One of the smartest aspects of 3PL WMS is the ability to assess carrier rates in real-time. This will ensure deliveries are made as timely and cost-effectively as possible for every order.
Not only does a 3PL deal with a number of different customers, but those customers also sell their goods over a wide range of sales channels. With robust WMS software, they can be smart about it.
Smart warehouse management accommodates the procedures and documentation required by each different sales platform and shopping cart. Smarter still, it provides real-time data and reports to the 3PL’s customers so they can see exactly how each channel is performing.
When customers entrust their products to a 3PL, they expect visibility and transparency. Making it thorough, useful, and in real-time is smart.
What holds some businesses back from smarter warehouse management? Sometimes it’s a matter of heroes vs. systems. Even with a WMS, many companies still rely on some manual systems or employees to do things that could be automated, or make decisions by “guesstimate” rather than data. These manual processes and human “heroes” leave the company stuck, unable to grow because of their inability or reluctance to rely on systems and the technology that supports them.
We’re not suggesting that the people working for 3PLs are obsolete. On the contrary! Human knowledge and abilities are the driving force in any business. But human talent cannot be used to its full capacity if everyone’s day is bogged down with repetitive, time-consuming manual tasks. Having the right systems in place can ensure that productivity goes on without interruption in the fastest, safest, and most accurate way. Meanwhile, the humans are free to do other, more important things that only a human can do. That’s using WMS technology to its fullest. And that’s smart.
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