Choose the right 3PL system Automate your logistics White Paper www.ibs.net
Automating your logistics Increasing numbers of distributors are switching to a third party logistics (3PL) provider: the international 2012 Third Party Logistics Study shows that this year, almost two-thirds of distributors are making greater use of outsourcing than was previously the case. What s more, the same study indicates that more than half of distributors have consolidated the number of 3PL providers they use. This means that you, as a 3PL provider, are faced with greater interest in your services, but also have to deal with increased competition. As a result, to help your customers cut costs and make their logistics processes more efficient, you need a good 3PL system. A 3PL provider needs more than just an ordinary warehouse management system (WMS). A WMS, after all, is usually intended for the internal warehouse of a single company, whereas a 3PL provider has products from multiple customers in its warehouse. And all of these customers have different requirements about how their products are to be packed, shipped and invoiced. In short, a 3PL provider demands much more flexibility from its WMS than the average manufacturer, distributor or dealer. In this white paper we demonstrate the requirements that a good 3PL system needs to meet. 2 IBS Dynaman
Seven requirements of a good 3PL system 1. Secure A 3PL system contains the data of multiple customers. This means that security is extremely important. A customer that for example is able to view its own data via the customer portal must not be able to access the data of other customers with products in the same warehouse. The 3PL system needs to have a completely separate data silo for each customer. 2. Reliable The products in your warehouse are not yours. Each item belongs to one of your many individual customers. Consequently, your 3PL system needs to be extremely reliable. The slightest problem could mean you no longer know where a particular product is located, or which customer that product belongs to. A mistake on your part here means problems for your customer, which of course reflects poorly on you. It is also your job to handle the logistics for your customers. This after all is your business, so if your 3PL system is unable to perform complex tasks reliably and efficiently, you stand to lose a great deal of time correcting these errors, which in turn will have a negative effect on your profit margin. 3. Transparent A good 3PL system is transparent for the end-customer. This means that distributors do not want their customers to see that they are using a 3PL provider, because you as unknown third party are a source of additional uncertainty for that end-customer. Consequently, the part of the 3PL system that the endcustomer sees websites for ordering and tracing shipments, and so on must be fully adapted to the house style of your customers, including their own logos and texts. This allows them to benefit fully from the trust they have built up with their customers. IBS Dynaman 3
4. Self-service Customers like to be able to access their data from anywhere and at all times. They also like to be able to execute a whole range of tasks. For this reason, a 3PL system must include a self-service component. This not only keeps the customer happy, but also relieves you as a 3PL provider of many customer support tasks: anything the customer can do itself is something you no longer need to do, allowing you to achieve more with fewer staff. A good approach to this type of self-service in a 3PL system is a web-based customer portal. This gives your customers access 24/7 to real-time information about their inventory and allows them to execute a variety of tasks, such as advance shipping notices or dispatch enquiries. 7. Industry standards You also need be able to integrate the 3PL system easily with various online shopping and ERP systems, sometimes even multiple systems per customer. There are customers, for example, that operate in both the B2B and B2C markets and receive orders via EDI from their business customers and via a web store from their consumer customers. And each customer uses its own favourite shipping companies, such as DHL, UPS or DPD. This means that the 3PL system has to be able to interact flexibly with all of these providers. After all, a 3PL system is only one tool among many for a customer, and must be able to communicate with other tools. 5. Multiple communication channels Each customer has its own preferred communication channels. This means that your 3PL system must be able to accommodate as many different communication channels as possible and automatically incorporate them into both your and their workflow. Some customers for example may wish to be able to log in to a web interface to view reports, while others may want to have reports sent to them automatically by e-mail after a task has been carried out. If your 3PL system does not support a specific communication channel, (potential) customers will be required to adapt their workflow. This represents an extra cost for them and creates a reason for choosing a different 3PL provider that does support their favourite communication channel. 6. Flexible billing Every customer has its own requirements when it comes to invoicing. The billing management functionality of your 3PL system must be flexible enough to handle all of these different invoicing processes. Not only have you negotiated different rates for each customer, but some customers want to be invoiced only once a month, while others expect their invoices immediately. 4 IBS Dynaman
Conclusion You as 3PL provider can offer considerable added value to your customers; but you need the right tools. A simple warehouse management system (WMS) is not enough; you need a system with extensive 3PL functionality. For example, it must be versatile enough to support a range of different industry standards, as well as different methods of billing, packing and shipping. It must also offer the highest degree of self-service by your customers, preferably via a web interface. Are you on the point of purchasing a WMS with 3PL functionality? Or are you not happy with your current system? Whatever your situation, be sure to have a look at the requirements described in this white paper. IBS Dynaman 5
IBS Dynaman Next generation Warehouse & Operations Management Dynaman by IBS combines the functionalities of a typical WMS and MES (Manufacturing Execution System) in a single, integrated, flexible software solution. IBS uses Dynaman to target companies seeking to automate their logistics. The processes supported range from goods inward, inventory management and production tracking, through to shipment. The latest version includes a dock and yard management module for efficiently managing incoming and outgoing freight. Trucks, for example, are automatically routed to the correct loading bay by text message. Dynaman even allows you to define your workflows via drag-and-drop, without the need for custom programming. And Dynaman offers interactive visualisations of the warehouse, the yard and the production environment, as well as reports in multiple formats, including Excel and PDF. The entire 3PL provider process can be automated using Dynaman. IBS has implemented Dynaman systems in Belgium, the Netherlands, France, the United Kingdom, Italy and more, and has built up a customer portfolio in the 3PL market that includes names such as DSV, Westlandia, Europal and KTO. EMEA Region (Corporate Headquarters) IBS Sverige AB P.O. Box 1350, Hemvärnsgatan 8, SE-171 26 Solna, Sweden Phone: +46-8-627 23 00 Email: info@ibs.net Americas region International Business Systems US 90 Blue Ravine Road, Folsom, CA 95630, USA Phone: +1-916-985 3900 Email: info@ibs.net APAC region IBS Australia Pty Ltd Level 3, 12 Waterloo Road Macquarie Park NSW 2113, Australia Phone: +61 1300 882 467 Email: info@ibs.net www.ibs.net