3PL Software: Types, Advantages, & Guide on Choosing

Last Modified: March 24th, 2022

4 min read

What is 3PL Software?

3PL software, or just commonly referred to as ‘3PL’ in business systems, is a  business management solution for 3rd party logistics companies. 3PL software is used to manage the entire 3rd party logistics process, including sales and marketing, operations, and finance. 3PLs are focused on providing customers with efficient logistics services. 3PL customers range from small businesses to large corporations.

The 3PL terminology used in this article is not to get confused with the ‘3PL’ generally used in supply chain management which refers to the actual company or the provider of “third-party logistics services.” The former is a logistics management system or application used by the latter to carry out its business more efficiently.

What are the different types of 3PL software?

  • • Standalone Warehouse Management Systems (3PL WMS)

A 3PL WMS is developed to manage the 3PL warehouse or storage operations, including order picking and packing, materials handling, inventory management, transportation management, customer relationship management (CRM), etc. Stand-alone 3PL Systems are also known as 3PL Warehouse Management Systems, 3PL Software, or 3PL Warehouse Management.

  • • Enterprise Resource Planning (ERP) Systems

ERP 3PLs systems are enterprise solutions for 3rd party logistics providers. It is a complete solution combining distribution, supply-chain management, and transportation services to automate logistics operations. Warehouse Management Systems (WMS) & Enterprise Resource Planning (ERP 3PL) can be combined into one system along with integrated modules.

  • • Integrated Supply Chain Management (SCM) Suites

An integrated supply chain management (SCM) system is a software package that manages and supervises the whole supply chain from product development to warehousing, inventory control, and shipping. The system records the movement of products, data, and financial assets from start to finish. The suite aims to improve visibility, mobility, and security while lowering operational costs, ease of use, and collaboration between different aspects of supply chain management.

What are the benefits of using 3PL?

As a business owner, you’ll understand the importance of efficiency. If you’re not using 3PL to run your logistics, then chances are that it’s costing you money and time. Find out more about how 3PL can help increase efficiencies for your business:

  • • Automation

3PL automates and streamlines business processes. It can help to remove expensive and time-consuming manual processes, leading to efficient workflows and boosting profits.

  • • Cost-saving

3PL can help to manage and allocate logistics costs as it consolidates supply-chain data into real-time information, allowing business owners to make informed decisions, which leads to reduced operational costs and higher profits.

  • • Real-time accuracy

3PL ensures that real-time data on inventory levels, product flow, and shipment status is provided to the right people on a single platform. It makes it more customer-oriented with quick response to customer inquiries. 3PL can also provide logistics providers with real-time access to accurate product information, which leads to increased customer satisfaction and lowers costs.

  • • Customization and integration

3PL systems offer flexible software customization. It is also flexible and scalable in that it can be integrated with third-party applications, such as ERP systems for inventory and accounting, and WMS for warehouse management.

  • • Business intelligence

It facilitates the planning process to optimize product flow across the supply chain, allowing 3PLs to increase capacity to meet changing market conditions. 3PL can handle large volumes of data while improving accuracy and insight into customer needs. For example, 3PL can provide them with customized reports that can be used to see their inventory levels and what they need to re-order.

What are things to consider when choosing a 3PL software?

3PL software can vary based on operation size, scope, and requirements. One should consider the criteria that matter most when evaluating 3PL solutions. It may include system scalability, integration capabilities with another backend, mobile support for field staff, many more. Below we provide the things to consider when choosing a 3PL software partner:

  • • Capable of integrating into your business ecosystem

3PL software should be capable of integrating into your systems. It should be able to support your business ecosystem, such as your Warehouse Management Systems (WMS), Transportation Management Systems (TMS), Delivery and Distribution (D&D) Software, and Customer Relationship Management Solutions (CRM).

  • • Customizable to meet specific needs

3PL software should be customizable for specific needs, future upgrades, and migration to other platforms. It should be able to meet relevant requirements by your existing systems for other extended functions.

  • • Scalable in terms of costs

3PL software should have a flexible pricing structure that covers software modular functions, technical support, and other maintenance services. So it should be scalable in terms of growth trajectories and added complexity of business requirements, ensuring a seamless experience.

3PL is created for company growth

3PL software is a powerful tool that can help your company grow. Whether you’re in the manufacturing industry, retail world, or looking to automate your supply chain and warehouse operations – there are a number of 3PL software options that can help. Or whether you’re looking for a standalone warehouse management system, an enterprise resource planning suite, or integrated supply chain management software for your business ecosystem, there are 3PL solutions out there that can help. You’ll want to make sure you choose the right type of 3PL for your needs, and it’s important to understand how each one will work with different aspects of your business ecosystem before making any decisions. 

Before choosing the right one for you and your business needs, take into consideration what’s important to you – whether it be automation, cost-saving measures, real-time accuracy in inventory tracking, and reporting of data points like lead times and shipping costs. And don’t forget about customization options! Your choice of 3PL software should allow for integration with other aspects of your organization so that once implemented seamlessly throughout all levels of operations from warehousing through delivery – it will continue to deliver value over time as new demands arise within the marketplace.

Got more questions?

If you’re still unsure about what types are best for you, don’t hesitate to reach out! We have experts who are ready and waiting to answer all your questions. Have any additional questions? Email us at info@excelym.com

Serge is a Managing Partner and the head of sales and business development.

Published on: September 17, 2021