If you run a third-party logistics (3PL) operation, you know how important it is to have an efficient warehouse, especially during high selling seasons. The success of a 3PL business depends on the ability to receive, store, pick, pack, and ship their clients’ products as quickly and efficiently as possible. That’s why so many 3PL companies are turning to warehouse management systems (WMS) to streamline their operations.
In this article, we will explore how a WMS can increase efficiency in 3PL operations, the benefits of implementing a WMS, and the factors to consider when choosing the right WMS for your business.
Table of Contents
- Understanding the importance of a warehouse management system (WMS)
- WMS functionalities
- Benefits of implementing a WMS
- Choosing the right WMS software for your business
- Implementing a WMS in your 3PL operations
- WMS training & support
- WMS FAQs:
- Conclusion: The future of WMS in 3PL operations
Understanding the Importance of a Warehouse Management System (WMS)
A WMS is a software system that aids warehouse managers with a way to control and optimize warehouse operations. The system’s most powerful strength is its ability to provide real-time visibility into inventory levels, locations, and movements. This helps managers make better decisions and reduce errors.
WMS Functionalities
A WMS typically includes functionalities like receiving, put-away, picking, packing, and shipping. Let's take a look at these functions individually and see how they can benefit you and your business.
Receiving
The receiving process is generally the first step in a warehouse operation. With a WMS, the receiving process becomes more streamlined because it can both identify the incoming products and match them with open purchase orders with the help of either barcodes or RFID tags.
Also, if you sell food, supplements, or any other product that has a lot number or expiration date, those records can be captured during the receiving process.
Put-Away
After products are received, they will need to be put away into its designated location in the warehouse. A WMS can help with the put-away process by providing default locations for specific products. Also, if you have more than one warehouse, a WMS makes relocating or splitting stock even easier to different locations.
Pick & Pack
When an order comes in, the products in the order must be picked and then packed for shipment. A WMS can help optimize this process by supporting two ways for your team to pick orders:
- Pick order by order - This picking process is exactly what it sounds like. If picking order by order, the picker will pick all the items for one individual order, pack the order up, and then move on to the next order.
- Group-based picking - Group-based picking is generally used for larger warehouses. Group-based picking is helpful because it allows staff to customize batches of items to pick based on location or type. Then, those items will be packed into their individual orders a little later down the line.
Shipping
The last and final step in the warehouse operation is shipping. A WMS can help optimize the shipping process by selecting the best carrier and shipping method based on factors like delivery time and cost. Also, some WMS platforms can provide additional benefits like access to discounted rates.
Benefits of Implementing a WMS
Implementing a WMS can bring many benefits to a 3PL operation, including …
Improved Efficiency
A WMS can automate many manual, tedious tasks like data entry and product tracking. By automating this process, you can save precious time and reduce errors, but that is not all. With an automated process, you can also expect to optimize your current workflows, like picking and packing, improving efficiency, and reducing labor costs.
Increased Productivity
Always know your inventory levels and make better decisions with a WMS. Gain real-time visibility into inventory levels and locations and help your team make better decisions and improve productivity by making information more accessible. A WMS can also reduce the time it takes to fulfill orders by creating an efficient walk path for pickers sorting by location. Faster fulfilled orders can improve customer satisfaction, and can strengthen the relationship with your clients.
Better Inventory Control
With its ability to provide real-time visibility into inventory levels and locations, a WMS also helps your team make better decisions when it comes to replenishment and storage. Using a WMS, you can reduce inventory holding costs by optimizing inventory levels and locations.
Choosing the Right WMS Software for Your Business
When choosing a WMS software for your 3PL operation, there are several factors to consider. Here’s the top four you should think about when you are evaluating the many WMS platforms out there.
Business Needs
In the software world, there is not one size fits all. Some can be more dynamic than others, but every software has its pros and cons. When researching WMS platforms, consider the specific needs of your business, such as the size of your warehouse, how many warehouses you have, the types of products you handle (do you need a platform that can support expiration dates), and the volume of orders you process.
Software Type
When it comes to software, there is more than one type, and WMS is no different. For WMS, there are three main types:
- On-premise software: This software is installed on your own servers.
- Cloud-based software: This software is, you guessed it, hosted with cloud servers and is accessed over the internet.
- Hybrid software: This software combines both on-premise and cloud-based functionalities.
Software Type
The two key features that any WMS should have are features that can help harmonize your operations and make your life easier.
Inventory Management
Inventory management is crucial to any business that deals with a physical product. It involves keeping track of stock levels, replenishing stock, and ensuring that products are put away in an organized way so that employees can easily pick the products as orders come in. A WMS with robust inventory management functionality ensures that businesses can reduce waste and avoid over- or under-stocking inventory.
Order Fulfillment
Order fulfillment is the backbone of any e-commerce business. It involves receiving, processing and delivering orders to customers. For any online retailer, a successful order fulfillment process can also make or break a business. Quick and efficient fulfillment is needed to compete with the behemoth corporations out there. That is why the second most critical WMS functionality you should look for is order fulfillment.
Integration
As a 3PL, you know how important it is to connect with your client’s online marketplaces. Therefore, the integrations a WMS supports will be a huge factor of what application you choose to go with.
Tip: Before you decide on the WMS for your business, make sure that they support your integrations or have a game plan of how to make the different platforms talk to each other.
Implementing a WMS in Your 3PL Operations
Though implementing a WMS in your 3PL operation can bring many benefits, it can also present some challenges. Here are common challenges 3PLs face during WMS implementation and how you can overcome them.
Resistance to Change
Some warehouse employees might be resistant to a new system that changes how they currently do things. To overcome this challenge, try involving your employees in the implementation process and provide training and support to help them adjust to the new system.
Data Integration
When you think of integrating a WMS with the other systems in your supply chain, you might want to run as far and as fast as you can from new technology. A WMS worth its price tag will know this and will help you with setting up your integrations.
System Configuration
Configuring a WMS to meet your specific needs and workflows can be challenging. A WMS vendor should provide an onboarding process where their team listens to how you currently work, what platforms you work with, and your current challenges. Then, using that information, create a new and better workflow that makes you and your team’s lives easier and sets the stage for growth and success.
WMS Training & Support
Once a WMS has been implemented, it is important to receive training and support to ensure the system is used effectively. This includes onboarding, online resources, and ongoing technical support. All should alleviate the process of integrating a new software into your process. However, sometimes, they can create added frustrations. Here’s a look at some elements to look for when it comes to training and support.
Onboarding: Make Sure You Know the Cost Before Signing
Some onboarding costs can be around $600 and some onboarding costs can be in the thousands. This cost is in addition to the cost of the software and is sometimes not disclosed right away. Before you choose the best WMS for you, make sure to ask about the onboarding costs so you don’t experience sticker shock later down the line.
Online Resources: A Knowledge Base Is Key
When evaluating the different WMS applications, make sure that the WMS you are considering has a knowledge base that you can go to if you encounter any questions.
Support: Real Live Humans vs. Robots
Some WMS software companies had great support during the onboarding process but seriously declined after that. You should always be able to get help if needed, and support should not be you trying to get your problem across to a chatbot.
Tip: Know how you will be treated when you do need to reach out to support. Try calling the support line of the software you are looking into. If you get exceptional service with that test, you will know that you will be in good hands if you choose to move forward with that company. If the process is more frustrating than you could have imagined, well then you have a glimpse into your future if you decide to go with that software.
WMS FAQs
How long does it take to implement a WMS?
The time it takes to implement a WMS depends on the software company. Some implementations can take six to eight months, and some can be up and running in a couple of weeks.
What is the difference between ERP and WMS?
Enterprise Resource Planning (ERP) and WMS provide tools for automating processes and workflows. Both can be used interchangeably, but they are not the same thing. Here’s how the two solutions differ:
- WMS is a software that helps simplify the daily operations of a warehouse including receiving, put away, picking, packing, and shipping. A WMS is used to help make all the activities in a warehouse hum with efficiency.
- ERP software integrates into different departments in a business and centralizes a company’s data. That way all departments from accounting to marketing to risk management have a real-time analysis of the different business processes. This can also help companies achieve effective control and management.
How can a WMS reduce the cost of operations?
A WMS can reduce your warehouse operations cost by making it possible to process more orders without having to hire any more operatives.
Conclusion: The Future of WMS in 3PL Operations
A warehouse management system (WMS) can bring many benefits to a 3PL operation, including improved efficiency, increased productivity, enhanced accuracy, and better inventory management (to name a few).
Book a call with our team to see if Zenventory’s WMS is the right solution for you and your business.
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