With the growth of e-commerce, many businesses depend on third-party logistics providers to manage their distribution, storage, and fulfillment. Their “pick, pack, and ship” expertise might be an unrecognized part of the customer journey, but it’s vital to the customer experience. If there are problems in fulfillment, customers will not blame the 3PL — they’ll hold the brand responsible. That makes it even more important to choose a 3PL that is up to the job. In our opinion, any 3PL should be offering these five technology and transportation services to make it on the shortlist.
Strong Business Analytics to Drive Value
Safe, efficient warehousing is the foundation of a reputable 3PL provider. Ideally, customers want to rent the smallest amount of space necessary for their inventory for the shortest possible time. Although stock on the shelf is a cost to the company, there is business value in the vast amounts of data generated from sale to fulfillment.
The problem is that too many retailers and 3PL providers lack the business analytics to seize that value. Only 27% of 3PLs are currently satisfied with their analytics infrastructure. Cost and expertise are certainly a barrier — business analytics software can be expensive, and it requires a skilled analyst to extract the complete insights — but the business benefits are compelling:
- Tie processes to KPIs to maximize efficiency and productivity.
- Use predictive analytics to anticipate demand and manage inventory, particularly around peak season.
- Cut costs and save time with streamlined Route Planning Optimization.
- Create real-time reports on order status, inventory, and delivery schedules — in the warehouse and on the road.
With a detailed breakdown of demand, processes, and costs, retailers can take the necessary steps to ease bottlenecks, anticipate cycles on the sales forecast and ultimately boost customer satisfaction through a streamlined end-to-end experience.
Data Integration for Complete Visibility
Today’s retailers can no longer wait for the end of the month to bring the ledger up to date. In real-time, they need to know how demand translates to supply, how much inventory they have in the warehouse, and where the opportunities lie to eliminate costs or improve efficiency.
To support real-time inventory monitoring and order status reporting, several systems have to be integrated so that data and insights can be shared freely across the supply chain. Wherever there are interruptions in sales, inventory, or shipment, the business is vulnerable to lost or incorrect orders, late delivery, and stock sitting on shelves instead of in customers’ hands.
A 3PL provider should offer a complete electronic document integration service to connect the retailer’s order-processing software to the back-end inventory ERP (enterprise resource planning).
Warehouse Management System
There is no substitute for experience when implementing a reliable warehouse management system, one set up for both smaller e-commerce stores and big-box retailers. In the simplest terms, the warehouse management system establishes the most efficient processes for receiving, tagging, storing, and distributing goods.
If the system is still largely human-operated, processes need to be in place to maximize performance, minimize human error and eliminate theft (yes, it’s still an $80 billion/year issue). Suppose the system is automated, using modern robotics and intelligent storage. In that case, the data needs to flow as smoothly as the conveyor belts so that each item reaches the right destination on time.
Amazon continues to set the standard for smart warehouse management with its relentless drive to eliminate inefficiencies and enhance customer satisfaction. The challenge for other retailers is that Amazon becomes the benchmark, despite having significantly greater resources than the competition to hit the targets it sets.
Retail Compliance for Cross-Border Sales
In our globalized economy, the supply chain can now run seamlessly from an order placed on social media to a factory in Guangzhou or Shenzhen to a package dropped on a porch in Idaho or Texas. The customer might have no idea how many hoops the retailer has to jump through to meet compliance regulations, but any 3PL will be aware of the challenges involved.
There are enormous benefits to partnering with a 3PL that coordinates routing, shipping, and labeling for any retailer that ships inventory across borders. At Taylored Services, we operate an extensive library of SSCC18-compliant labels so that a single logistical unit can be tracked and identified anywhere in the world.
Custom Package Design
Your 3PL partner can offer far more than just covering the final mile of delivery. With custom package design, they can also help a business make a great first impression. Especially for e-commerce retailers who are reselling items from white-label vendors, a custom package-design solution can stamp your brand on the final product. That’s particularly important in the social-media age, when customers are more likely to share unboxing content. Still, it’s also sound business sense to ensure that the end product is as attractive and on-brand in the box as it is on sale.
E-commerce revenues are predicted to hit $6.5 trillion by 2022. It’s already easy for a retailer to set up an online presence and start selling, even without owning any actual inventory. That alone is not a guarantee of success, however. Some 90% of e-commerce start-ups fail within 120 days. The missing part of the equation is an efficient, cost-effective back-end operation.
Taylored Services is a fully integrated third-party logistics provider specializing in wholesale, retail, and direct-to-consumer unit fulfillment. Since our humble beginnings in 1992, we have become a trusted partner for brick-and-mortar and e-commerce retailers in distribution, fulfillment, and warehousing.
Sources:
Reuters – New report finds significant analytics gap for 3PLs and shippers
Supply Chain Digital – The future of logistics warehouses
ITI Manufacturing – The 5 Largest Cities In China For Manufacturing
GS1 – An Introduction to the Serial Shipping Container Code (SSCC)
Internet Retailing – 90% of e-commerce start-ups end in failure within the first 120 days