Custom 3PL Warehouse Management Software Solutions

3PL software for warehouse management is gaining relevance: first of all, due to the ability of logistics service providers to work simultaneously in various interaction formats, with different commodity flows and contracts, the number of intermediaries, etc. In addition, unlike basic solutions, 3PL solutions are predisposed to multi-channel logistics, where the transparency of processes “from A to Z” is critical. 

At the same time, choosing out-of-the-box solutions is not always justified, since even with fine tuning, they are often unable to cover complex processes affecting several suppliers/departments/business models at once. That’s why more and more businesses that deal with warehouse management have to resort to custom 3PL warehouse management software development. But how does WMS work in logistics? Let’s answer this question below.

What Is 3PL Warehouse Management Software?

So, what is 3PL warehouse management software? In a nutshell, it’s a solution tailored for interaction with third-party logistics operators. Unlike conventional WMSes, which are aimed at automation of internal operations within only one warehouse, 3PL systems are designed for centralized warehouse automation for 3PL. This approach initially ensures scalability and guarantees transparency for all parties.

It follows that 3PL warehouse management software is tailored for a multi-client format since it makes it possible to store, track, and process goods from different manufacturers and with different requirements, providing each individual client with personalized access to data. Ultimately, the implementation of such systems reduces operating costs and speeds up order processing compared to standard WMS.

Challenges Without Proper 3PL Software

The lack of a custom 3PL WMS software can make any system consisting of disparate solutions chaotic, as in this case, all processes will be scattered between separate tables, integrations will provoke data duplication, and management will lose proactivity. For example, we have noted how companies lost reputation with clients and faced overhead expenses – simply because the basic WMS wasn’t able to take into account the multi-client nature of 3PL operations. Let's consider the most typical challenges in 3PL warehousing in more detail:

• Lack of inventory visibility. Lack of real-time inventory visibility often causes wrong decisions, including excess product reserves, order fulfillment downtime, fines for non-compliance with contracts, etc. As a result, even small discrepancies between accounting and actual balance lead to a chain of accounting and invoicing errors.
• Order tracking delays. Delays in tracking order statuses degrade the customer experience and undermine the 3PL operator’s ability to meet acceptable delivery deadlines. In particular, when statuses are updated manually or are delayed due to poor integrations with seller and carrier platforms, returns and penalties arise.
• Manual processes and high error rates. Manual operations in warehouses open up a path to errors in picking, lost cargo, and suboptimal work schedules for your personnel; if you add poorly implemented automation to this, scaling processes will become unreasonably expensive.

As a company specializing in the development of custom 3PL warehouse management software solutions, we can build a system that will allow you to overcome all these challenges. If you are interested in obtaining all the benefits of 3PL software, feel free to contact us in any way convenient for you.

Off-the-Shelf 3PL Software vs. Custom Solutions

The decision between out-of-the-box third-party logistics software in the SaaS format and a custom solution should be made not only by taking into account your financial constraints and the ROI potential, but also from the point of view of the need for control and the ability to integrate a specific type of software into the logistics operations typical to the business model of each individual client.

For example, ready-made cloud-based 3PL WMSes have the advantage of speed of implementation and the availability of ready-made functionality; at the same time, their configuration capabilities, frequency of updates, potential difficulties in migration, as well as binding to specific 3PL WMS software providers, often become a serious obstacle to non-standard scenarios and sophisticated SLAs. As for custom 3PL software solutions, they obviously require time and expenses for development; meanwhile, they give complete freedom to set your own business rules and implement specific integrations. A hybrid format is also possible, where we connect custom extensions to a standard core module. 

Key Features of Custom 3PL WMS

A properly built custom 3PL warehousing software combines core functionality and a set of extensions that are suitable for fine-tuning, including inventory management, order fulfillment orchestration, multi-client support, integrations, analytics, and much more. Hence, the urgent need to initially think through the modular architecture – otherwise, you won’t be able to quickly connect new sales channels and store separate business rules for each client while maintaining a single data source for reporting and billing. Let's consider the standard features of custom 3PL software in more detail below.

• Inventory management. Typically, this functionality of 3PL software for small businesses includes the ability to track goods by batch and serial numbers, setting up FIFO/FEFO rules, cross-docking, automated order generation for replenishing reserves, inventory, and reconciliation tools, etc. It’s also crucial to ensure that each operation leaves an audit trail and allows you to quickly identify deviations by client and by location within the warehouse.
• Automated order fulfillment. For this type of functionality, it’s important to provide for prioritization, optimization of picking routes, document printing, integration with carriers for instant sending of labels and receiving tracking numbers, etc. All these features should work/update in real time – this is the only way you can maximize the productivity and accuracy of product picking.
• Multi-client support. Another critical part of the functionality is ensuring the isolation of each individual client's data and the ability to customize, including picking rules, packaging, labeling, tariffs, and SLA. At the same time, you have to maintain access to common warehouse resources. That is, the optimal model would be when each individual client can see only their own operations, while the operator has to be able to centrally manage resources, issue invoices, and monitor KPIs for contracts.
• Custom reporting and dashboards. Standard reports, even implemented through customizable templates, are rarely able to cover all possible scenarios of 3PL operators – that’s why it’s better to think about implementing custom dashboards for monitoring KPIs for contracts and automated reconciliation for billing. It also makes sense to customize reporting for specific user roles, such as an operations manager, a merchant, an accountant, a client, etc.
• Scalability and future-proofing. When designing a custom 3PL software for small businesses, it’s essential to initially assess the potential load increase over the next 3-5 years. This can affect the choice of architecture of third-party logistics software systems in favor of a cloud, microservices, and with a predisposition to horizontal scaling and connecting new sales channels. It’s also worth considering an increase in the number of caching levels, message queues, and automatic scaling on time so that the system doesn’t freeze under peak loads. 

If you would like to bring all these features or any others that weren’t listed above to life, write or call us, and we‘ll come up with the fastest and easiest way to implement them.

Integrating 3PL WMS with Other Systems 

Correct synchronization of orders, inventory balances, returns, and statuses requires reliable APIs, message queues, and error handling mechanisms. To ensure this, we build an integration layer with the ability to hot replace connectors so that when changing the client's ERP or platform, the execution logic doesn't change.

Also, all our integrations cover synchronization of orders and statuses, two-way replication of balances, exchange of data on returns and financial reconciliation, as well as communication with CRMs. In this case, we use a combination of web hooks, queues, and adapters for marketplaces and ERPs, configure data transformations, and implement mechanisms for automatic correction of exchange errors to ensure seamless processes and not violate the accuracy of reporting.

Implementation Example

As for our practical experience, we implemented a comprehensive AI-powered solution for smart routing for a logistics company specializing in the transportation of international freight. It has to enable its operators to track cargo in real time. One of the significant development milestones was truck telematics integration with 3PL WMS via REST/MQTT API and configured intermediate connectors, which eliminated the need for more complex, multiple DBMS integrations.

After deployment of this 3PL inventory management software, the client received the ability to process 100% of telematics events in a standardized format, reducing route and speed violations, as well as real-time reporting on fuel consumption, downtime, and violations. You can learn about this case more here.

Choosing the Right Development Partner

Are you going to hire 3PL software developers? Generally speaking, choosing a technology partner for custom 3PL software development is a very important decision that will determine your business’s sustainability and scalability. That’s why you should pay attention not only to the practical expertise in logistics of your potential technology partner, but also to the experience of building integrations with ERP, eCommerce, CRM systems, marketplaces, accounting platforms, etc. Finally, you must make sure that your contractor can guarantee the long-term scalability of the created solution without rebuilding its core – otherwise, you risk getting a system that will become obsolete in a few years and be unable to contribute to the development of your business for decades.

Conclusion

If your business has scaled to the point where ready-made solutions no longer cover all your requirements and tasks, then it’s time to think about developing a custom warehouse management software for 3PL. If this is your case and you’re planning to build 3PL warehouse management software, you can book a free consultation with our experts, where we’ll analyze your current processes, identify bottlenecks, and demonstrate what opportunities such a solution will open for your business. This will be the first step towards turning your warehouse infrastructure into your competitive advantage.

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