Warehousing can be an expensive endeavor, which makes it difficult to maintain sufficient levels of inventory while staying within budget for many shippers. The expenses associated with warehousing have led to the rise of minimalist trends such as Just-in-Time and On-Time, and In-Full inventory management, which aim to optimize shipments and minimize the amount of inventory being held at any given time. The rising complexity of practices such as these has led many shippers to outsource their warehousing functions to third-party logistics (3PL) providers.
3PLs offer a variety of cost-saving benefits for shippers, including labor management, real estate access, freight brokering, and more. One of the primary benefits of using a 3PL involves gaining access to their technology capabilities. Even though the days of expensive on-site hosting and proprietary logistics technology solutions are largely behind us, 3PL technologies still provide a significant boost to the shipper’s bottom line. This blog post will discuss some of these technologies and how their benefits translate to the shipper.
1. Warehouse Management Systems
By using the 3PL’s Warehouse Management System (WMS), shippers gain all of the benefits afforded by the technology without incurring costs for subscriptions, licenses, or installation. Depending on the size of the warehouse operation, the pricing model for a good WMS may cost tens of thousands of dollars—or even hundreds of thousands. By leveraging a 3PL’s existing WMS, shippers won’t have to bear the full weight of the solution’s upfront cost.
Beyond deployment and subscription costs, WMS solutions may be used to streamline a variety of processes. The savings generated get passed along to the shipper in terms of more affordable rates from the 3PL. Some of the cost-saving benefits offered by your 3PL’s WMS may include:
- Lot and serial number tracking
- Avoiding stockouts
- Improved planning/forecasting
- High inventory accuracy
- Streamlined labor costs
2. Electronic Data Interchange
The implementation of electronic data interchange (EDI) or Application Programing Interfaces (API’s) between shipper and 3PL has become essential for driving efficiency and cutting costs across logistics operations. Essentially, EDI is the doorway by which digital information passes between the two parties—an essential capability for any efficient supply chain operation in the age of Industry 4.0. By digitizing and standardizing purchase orders, invoices, and other relevant business documents, each party gains unfettered access to the information needed to maintain up-to-date inventory records.
When linked with a WMS, EDI will also contribute to streamlined inventory management. Essentially, real-time inventory tracking combines with real-time ordering and transactions to generate faster orders, provide a better experience for the shipper’s customers, facilitate better trend-tracking and forecasting, and more.
3. Transportation Management Systems
Much like WMS solutions, transportation management systems (TMS) are swiftly moving into the cloud. The 3PL absorbs any subscription, licensing, and set-up costs associated with the TMS as part of its rate, ultimately generating cost savings for the shipper. The TMS solution is then used to optimize routes and carrier rates to minimize costs for the 3PL and the shipper alike.
TMS capabilities are essential for any warehouse or distribution operation. Careful management of inbound and outbound freight can generate significant savings by leveraging:
- Optimized and reliable carrier networks
- Selection of optimized modes/service levels
- Real-time shipment tracking
- On-time delivery
- Optimized routing and planning
Technology-Enabled 3PL Solutions From Phoenix Logistics
At Phoenix Logistics, we aggressively invest in the most advanced WMS, EDI, and other related technologies to drive efficiency and savings for all of our shipper customers. We prioritize customer satisfaction in all of our services, and that includes providing cost savings wherever possible. Our technology capabilities enable us to provide e-commerce support, lot and serial number tracking, transportation management, freight brokerage, and other logistics solutions tailored specifically to the needs of the individual customer.
For more information about Phoenix Logistics and how our technology can streamline your logistics and improve your bottom line, please contact us today.
As an affiliate of the real estate firm Phoenix Investors of Milwaukee, WI, Phoenix Logistics has unique and preferential access to an expansive portfolio. Phoenix Investors’ Senior Management includes Frank P. Crivello as Chairman & Founder; David Marks as President & CEO; and Anthony Crivello as Executive Vice President. Robert Kriewaldt serves as Phoenix Logistics’ Senior Vice President.