The Way to Integrate Your 3PL Into Your Own Retail Operations

3PLs (or 3rd Party Logistics) have become much-needed outsourcing partners for retailers wanting to boost the efficiency and productivity of daily operations and concentrate on their core capabilities. But to fully realise the advantages, close cooperation and integration of business operations is crucial.

3PL companies offer various types of outsourced logistics solutions; such as transport, warehousing, materials procurement, inventory management, freight audit, payment and shipment tracking.

Research shows 3PL providers have led to overall logistics cost reductions for 75 percent of companies, and 86 percent of those businesses say it's enhanced customer service. (1)

The primary functions of 3PL providers are:

  1. Shipping and receiving -- centered on the management of this delivery process from start to finish; such as carrier connections, freight data and matrix accounts for real time visibility and increased transparency during the delivery procedure.
  2. Transport -- the actual transportation of goods or services between multiple locations. By way of instance, 3PL providers could deal with the inventory shipment between your warehouse and factory or between you and your client.
  3. Warehousing -- that is the most frequent kind of 3PL provider, as they manage storage, shipment and yields. A warehouse 3PL is incorporated into a firm's warehousing and transport processes and specialises in the distribution and storing of products and/or solutions.
  4. Distribution -- many 3PL providers offer a broad assortment of supply and wholesale services such as outbound order fulfilment, picking and packing, customized labelling, and production. By outsourcing supply to a 3PL provider, your employees can concentrate on other core competence business activities.

Retailers utilising 3PLs seek the following benefits:

  • Faster store replenishment
  • Increased rate of delivery in addition to the amount of delivery options
  • Improved transparency and visibility across all facets of the supply chain
  • accessibility to logistics experience and knowledge -- 3PL providers only purpose is to concentrate on optimising how your company handles fulfilment, shipping and warehousing. They can offer insight into problems within the supply chain, especially international logistics issues like documentation, customs, duties and transport protocols and regulations.
  • Helping you to concentrate on core capabilities -- a 3PL provider can remove the need to invest in your own warehouse space, technology and transport in addition to employees carrying out the procedures. This also frees up your key employees to focus more on business development areas such as strategic planning, optimising retail shop & eCommerce operations, and customer experience.
  • Scalability and flexibility --A 3PL provider can scale storage space and places, allocated labour and transport services based on precisely what services and capacity are required. This means retailers can more efficiently and creatively grow their store network with much less hassle and without needing to expand their labor and capital investment in logistics whenever they open a new place / sales channel.

3PL success is based on information sharing

Whilst 3PL can appear to be an obvious decision for retailers seeking to efficiently scale their organization, the benefits aren't immediate and they only have hard work and considerable time investment to guarantee the outsourced partnerships work. By both parties being aligned on strategy and operational forecasts, customer expectations can be met in regards to inventory availability, fulfilment, and yields. If critical data, trends and insights are traded around goods, inventory levels, warehouse management procedures and transit status then the 3PL partner has the ideal chance to optimise your overall supply chain and customer experience.

See also

https://www.connectpos.com/knowledgebase/open-a-new-shift/

https://www.connectpos.com/knowledgebase/close-a-shift/

https://www.connectpos.com/knowledgebase/setting-up-your-outlets/

On the flip-side, without proper control, approval processes and transparency, expensive logistics tasks like high volumes of inventory in transit or un-vetted store replenishment orders may creep in. Without mutual visibility, your 3PL is'flying blind' and not able to make the educated decisions to execute the practices that are ideal for your business. Likewise, your visibility on the status of merchandise and inventory across your system will be hindered and this may result in inefficient operational outcomes. Without proper data and systems integration, retailers typically wind up hiring a growing number of workers to oversee the 3PL partnership as their retail operation expands.



So whose applications systems should be used?

With information sharing and integrated workflows between spouses being crucial to 3PL success, the key question then becomes that company software system(s) should your employees and your outsourced partners staff operate from to accomplish this? Many retailers simply choose to try to work out of the 3PL's warehouse management applications. This certainly allows retail workers to leverage best-of-breed supply chain & warehouse management procedures developed through the 3PLs extensive logistics business expertise. However, fulfilling and handling inventory replenishment solely from a 3PL warehouse operation might not always be the very best customer experience. It can make sense for a number of your own eCommerce orders to be fulfilled from the local stores as opposed to your 3PL operated warehouse. By way of instance, your 3PL is based in Melbourne and you get an internet purchase from a client based in Sydney. That order must automatically be routed to the nearest store with inventory availability, ideally a Sydney Store, to ensure next day delivery, reduced freight costs, and finally a better client experience. Generally, that would require you to use your in-store POS and integrated eCommerce systems to control fulfilment in that situation. Another challenge of working straight from your 3PL partners systems is that in case you enlarge to utilize several outsourcing suppliers (as an instance, a local and overseas partners in each country) then your employees need to learn several systems that could cause challenges as you scale up.

Other retailers have pushed their 3PL partners to utilize their enterprise program. Whilst this makes it effortless to offer access to inventory, supply chain, product, transactional, client and other vital data, this means you're not minding your spouses best-in-class supply chain and warehouse management applications and processes.

Sources

https://www.connectpos.com/magento-pos/

https://www.connectpos.com/shopify-pos/

https://www.connectpos.com/bigcommerce-pos/

https://www.connectpos.com/ebook/

The perfect state is obviously to use the best elements of both parties systems by incorporating them to allow processes and data to be synchronised in real time. As a merchant then you get to benefit from working best-in-class POS applications to power your business growth and tap into the innovative supply chain and warehouse management capabilities of your 3PL partners systems. If you include more / alter 3PL partners you can scalably integrate their systems with yours to create an ecosystem that's built around collaboration, and enables each partner to focus on their core competencies.

ConnectPOS has the choice to integrate with your 3PL partners systems in precisely this manner. It is possible to set up real-time 2-way synchronisation in a controlled manner so all parties are working in unison. As an innovative cloud-based solution, the two parties may use the effective BI, inventory management and CRM capabilities of ConnectPOS to guarantee the benefits of a 3PL arrangement are complete realised. ConnectPOS clients who have integrated with their 3PL partners warehouse management system have shown to achieve better delivery times and improved customer services.

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