When a business expands and grows, there comes a time when it has to determine whether it has to outsource its fulfillment and shipping operations. During such times, a 3PL transport management system comes into the picture. Many manufacturers and business providers take the help of the 3PL transport management system to meet the customers’ demands.
However, all the 3PL service providers are not equipped with equal facilities. To know more about our 3PL management system, keep reading the blog till the end.
source: grandviewresearch.com
What is a 3PL transport management system?
The third-party logistics company or 3PL system offers logistics support and services. It takes care of all aspects of the business operations, shipping, moving goods from one location to another, and finally sending the goods to the end customers. Generally, a 3PL system is used to outsource logistics and supply chain management to outsource a company’s fulfillment and shipping services. Some of the tasks performed by the 3PL transport management system include the following:
- Transportation
- Warehouse
- Payment
- Material procurement
- Inventory management
- Freight audit
- Customs brokerage
- Shipment tracking
Due to all these reasons, a 3PL system of a company is generally integrated within the warehouse management and transportation operations of a company to deliver a comprehensive workflow. While some 3PL systems offer domestic and international transportation, customs brokerage, and trade compliance, some 3PL transportation systems are restricted to designing and delivering omnichannel logistics solutions for retailers, manufacturers, and eCommerce companies.
Functions of 3PL providers
Below are four distinct functions of the 3PL providers that a company can enjoy. All the functions discussed below can also be found in a warehouse order picking software:
- Shipping and receiving
The main focus of the 3PL management system is to manage the shipping process from the beginning to the ending. Sometimes, you will come across some 3PL management systems or software that handle transportation or integrated freight management services. The purpose of these technologies is to automate the routine and streamline efficiency.
Further, the 3PL management system also takes care of time-consuming tasks like accounting and freight payment. Other tasks performed by these 3PL systems include freight data, management of carrier operations, and matrix report. All these enhance the transparency and the real-time visibility of the shipping process.
- Transportation
The 3PL service providers are responsible for transporting goods and services from one location to another. For example, a 3PL service provider manages the inventory shipment between the buyer and a company. In case one 3PL service is unable to complete the task, another 3PL service provider will take up the responsibility and leverage the duties.
- Warehousing
One of the most common 3PL service providers is the warehousing 3PL providers integrated into the company’s transportation and warehousing procedures. Also, the warehousing 3PL system specializes in the storage and distribution of goods and services. Often, these 3PL warehousing systems provide customizable methods of handling distribution, storage, and product transportation.
- Distribution
You will come across many 3PL organizations that provide a wide variety of wholesale and distribution services, including picking and packing, outbound order fulfillment, manufacturing, and custom labeling. Since the distribution of substantial product quantities can be challenging for small companies, the third-party logistics provider outsources the distribution. As a result, the business employees can focus on other essential tasks.
Difference between 3PL and 4PL
Many of you consider the 4PL logistics management system synonymous with the 3PL logistics system. However, there is a slight difference between the two. The role of a 4PL logistics management system is more defined and vivid than the 3PL logistics management system. Further, a 4PL logistics system is often defined as the following:
A 4PL system is a separate logistics entity that can be established as a joint venture or developed as a long-term agreement between the primary client and one or more partners.
In short, a 4PL logistics system is held responsible for performing the following tasks:
- Planning supply chain
- Managing the task of supply chain
- Designing the supply chain from the beginning till the end
So, besides the fundamental tasks performed by a warehouse order picking software, a 4PL logistics management system does much more.
Benefits of a 3PL order management system
As discussed above, there are various reasons why companies today are resolving to take the help of the 3PL order management system. Not only does it save time and money, but it also provides an affordable solution to the customers. given below are some valid reasons for which you ought to pick the 3PL logistics management solution:
- Scalability
Using a 3PL service can help you measure the company’s space, transportation, and labor. However, all these are primarily dependent on the company’s services. Without much effort, the suppliers, manufacturers, and others in line can easily develop a unique and more effective good and service distribution. This way, you can clear the path and see your business grow exponentially.
- Cost-effective and time-saving
Every business believes that a good amount of efficiency is required to succeed. This is where a 3PL service provider can help you immensely. A 3PL logistics management service’s function includes optimizing services, determining how the services and goods will be transported from one location to another, etc.
- Expansion
With the 3PL services, you can see your business expanding to a new level. This is because most of the work will be handled by the 3PL logistics provider. Hence, you can utilize this time to enhance the company’s productivity.
