Third-party logistics handle the logistics and distribution aspects of a business. It makes the order fulfillment process easier by meeting specific customer needs.
The 3PL order fulfillment services include warehousing, outsourcing materials, tracking delivery, packing, shipping, and more. These services are the primary driving force to why businesses are aiming to partner with 3PL providers.
A 3PL integration can be a game-changer for ecommerce and businesses. It allows them to optimize the supply chain by automating most operations.
What is 3PL Integration?
Third-party logistics integration connects your supply chain operations to 3PL providers. It automates your eCommerce order fulfillment services, making your supply chain management more flexible and scalable.
3PL integration solutions helps update information between a business’s systems and the third-party logistics provider. It enhances communication by facilitating data exchange and provides real-time insights into the warehouse and distribution centers.
3PL Integration Use Cases
3PL integration consists of various types of integration to the supply chain operation. Each type facilitates a specific industry or individual aspect of supply chain operation. The most common types are:
ERP Integration
ERP software is a critical tool that helps companies manage their essential operations. Integrating ERP enhances data exchange and provides real-time inventory updates. This ensures cost-effectiveness.
Unifying 3PL and ERP reduces error. Achieved by minimizing manual tasks, automating processes, and enhancing logistics operations. Ensuring all the departments operate with updated data.
eCommerce Integration
Integration of the ecommerce platform with 3PL creates a synchronized system. This reduces manual entry and provides real-time inventory updates. It also streamlines the return process and enables selling to more locations.
Transportation Management System Integration
TMS integration is aligning the company’s TMS to that of 3PLs. This enables real-time visibility and tracking of shipments, enhancing transportation activities.
Integrating the TMSs saves a significant cost and improves business operations by:
- Optimizing routes
- Improving freight management
- Real-time tracking
- Billing automation
- Data reporting
- Multi-modal transport management
3PL EDI Integration
Electronic data interchange (EDI) is the seamless electronic exchange of documents. In a standardized format, such as UN/EDIFACT and ANSI X12. 3PL EDI integration automates supply chain operations. This reduces human intervention by linking your system to 3PL providers. All while maintaining EDI standards.
With this integration online customer requests are sent in real time making the transaction quick and efficient.
Also see: The ERP WMS Integration Guide [+ Steps & Methods]
Major Benefits of 3PL Integration
3PL integration is a great way to digitalize your own warehouses. Keeping you ahead of business competition by meeting customer’s unique needs. The benefits of third-party logistics integration solutions go on. The major benefits of 3PL include:
Effective Inventory Management
3PL integration provides:
- Automated inventory updates.
- Real-time visibility of inventory levels at various locations.
- Eaze of managing inbound shipment requests.
It makes it easier to execute stock allocation based on up-to-date inventory data.
Operational Efficiency
With comprehensive data-analysis and better interdepartmental communication. It is easier to optimize the supply chain management. This avoids overstocking and better resource allocation.
- Makes it easier for online stores with proper shipment confirmation.
- Accurate shipping details interchange ensures the detailed requests won’t be ignored.
- Specifically useful for large companies with inbound shipments.
Cost-Effectiveness
As data-driven insights improve accuracy in planning, reducing errors and miscalculations. 3PL integration automates various processes, lowering operational costs, and labor costs and reduces waste.
Better Visibility
The benefits of real-time visibility due to 3PL integration are very significant. Access to real-time data analytics provides deeper insights into inventory. Keeping the inventory stoking to shipping, steady as per business needs. Keeping information up-to-date helps to identify inefficiencies and take timely action on them.
Streamlined Fulfillment Service
A key aspect that evaluates business reputation is meeting customer expectations. 3PL integration optimizes logistical needs and ensures efficient order fulfillment. Facilitating faster delivery, reducing error, and better order accuracy.
Business Growth
3PL integration provides scalability, flexibility, and better retail order fulfillment services. Thus businesses get on board with the changing market conditions and more customers. Improvements in operations and customer satisfaction paves the way for better sales, reputation, and business growth.
3PL Integration Challenges and How to Solve them
​Integration with a logistics service partner provides comprehensive solutions for order management systems. Still, issues with regulatory requirements, data entry, and customer service can pose challenges.
Cost of Integration
Since 3PL integration requires merging into a business ecosystem this requires huge investment. Cost of cutting-edge technology, professionals, and infrastructure. This may also involve the unadded cost due to error.
Solution
- Plan the integration to match budgets and requirements. Explore options that best suit both.
- Make use of existing technology to lower costs where possible.
- Factor in current resources, and planned scaling.
Rewiring Your Management
Change management is an effective strategy to employ whenever including new forms of technology into established systems and processes.
Solution
- Get employee buy-in in advance.
- Start providing regular training programs for employees.
- Involve them during the User Acceptance Testing (UAT) stage, if any.
Lack of Standardization
One of the major challenges during 3PL integration is the absence of standardization. Since different systems have unique data formats and communication protocols, there is often a lack of uniformity making the integration more difficult.
Solution
- Identify key data components across systems that need to be synced.
- Establish a standardization agreement.
- Deploy multi-ware integration platforms for smooth data transfer between the two different companies.
Inaccurate and Inconsistent Data
Data inconsistency that occurs due to a lack of validation process can lead to a plethora of errors.
Solution
- Develop data mapping rules to translate data across systems with much accuracy.
- Carry out proper data governance practices and standardization.
- Avoid using outdated technology to reduce errors.
6 Best Practices for 3PL Integration You Need to Know
For a successful 3PL integration, incorporating cutting-edge technology isn’t enough. You need to plan and actualize the best practices to yield better integration. Some of the most effective best practices are:
Develop a Thorough Plan
Defining the goals and objectives of 3PL integration can help foresee bottlenecks. Keep in mind the aim of the integration process. Develop a plan that can provide a support system even while the integration fails.
In case an issue pops up, ensure you have a backup plan such that the integration process is successful.
Effective Coordination and Communication
Integration of two different ecosystems requires clear and open communication. Communication can break any misconceptions and establish a better understanding of each system and ensure a smoother integration process.
- Establish a communication channel to collaborate with the 3PL provider and your team.
- Share KPIs and other information to enhance transparency.
- Rely on timely and effective documentation to ensure easier troubleshooting down the line.
Data Accuracy & Standardization
Data accuracy and consistency play a key role in keeping the supply chain error-free. You can actualize the following practices to standardize your data:
- Layout the data standards and guidelines for smooth integration.
- Leverage machines and software to ensure accurate data transfer.
- Regularly monitor and review of the data pipelines.
Monitoring Performance & Measure Key Performance Indicators
Getting real-time updates on the integration is a mu. This can help you with evaluation and identify where improvements are necessary:
- Define the KPIs to measure it against the development of 3Pl integration.
- Carry out real-time monitoring.
- Regular performance review based on the KPIs.
Aim for Continuous Improvement
Things may not go as you planned. So improving and adapting to feedback or updates in technology can be of greater benefit in the integration process:
- Incorporate a feedback system to get suggestions.
- Foster a good relationship with vendors.
- Ensure a means to stay updated with changes in tech, business, customer demand and market.
DCKAP Integrator: Integration for Manufacturers And Distributors
A successful 3PL integration can keep your business on par with the competition. Making it more adaptable to emerging technology to deliver better service for clients.
As 3PL integration provides better scalability and flexibility to your system. Still, the integration process can also pose significant challenges to your current operation. This requires a solution that can enhance efficiency and ensure seamless integration.
DCKAP Integrator streamlines your existing business ecosystem with your third-party logistics provider. With DCKAP Integrator, you can optimize multi-platform integration facilitating easy ecommerce data integration. Ensuring easy integration with many platforms, including ERP, CRM, PIM, and more. Talk to our integration experts today to see it in action.
FAQs
What is 3PL integration?
3PL integration is the process of connecting an organization’s system to that of 3PL’s. It aims to streamline the logistics operation by merging both digital ecosystems. It integrates the warehouse management system of the 3PL suppliers into your system.
What does 3PL stand for?
3PL stands for Third-Party Logistics. It involves any logistics service contract including warehousing and transportation services. The service provider also fulfills special deliveries. Here organizations outsource logistics and supply chain management to a third-party logistics business.
Is Amazon 3PL or 4PL?
Amazon shows the straits of both 3PL and 4PL. Like 3PL, Amazon provides warehouse storage, transportation, and fulfillment services. It also provides integrated supply chain solutions, showcasing the typical characteristics of 4PL providers.
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