What is a 3PL Warehouse Management System?

With companies holding on to more inventory, the inventory management capabilities of your 3PL partner are more important than ever. At the heart of those capabilities is the 3PL’s warehouse management system (WMS). In this article, we’ll take a closer look at the role of the WMS in the warehouse, and the benefits it can bring to 3PL inventory management and other vital functions.

What is a 3PL warehouse management system?

A WMS is a software-based system that performs a variety of functions related to goods arriving to the warehouse; goods stored within the warehouse; and goods leaving the warehouse. Its basic capabilities include:

• Warehouse inventory management: The WMS manages key characteristics like product location, on-hand quantity, pallet ID numbers and, where applicable, lot number, serial number, and/or expiration date. This information can be accessed in real-time by the 3PL’s warehousing customers.
• Product segregation: The WMS enables 3PL providers to segregate products and prevent cross contact in accordance with Current Good Manufacturing Practice (CGMP) standards for pharmaceutical products and the Food Safety Modernization Act (FSMA). 
• Order management: Shipment status, parcel tracking information, and other information can be viewed – and is automatically updated – within the WMS.
• eCommerce pick and pack: The 3PL can design the most effective picking pattern so that associates reduce walking distance and overlap, and therefore minimize labor costs. Associates then follow the packing instructions generated by the WMS and affix the shipping label (also WMS-generated). 

Additional benefits of using a 3PL’s WMS

In addition to its common capabilities as listed above, WMS systems are almost endlessly adaptable and customizable – providing 3PL customers with many benefits.

• Avoid systems investments: While the capabilities of WMS systems are indispensable to modern businesses, they can come with a hefty price tag. 3PL customers can largely avoid this cost by paying only for the WMS resources they use. Some 3PLs, like Kanban Logistics, do not charge customers for WMS usage and instead charge only for related labor (e.g., the labor involved with pick and pack). 
• Ability to support integrations: The WMS can integrate with a 3PL’s other platforms (e.g., transportation management systems) and with external software platforms via electronic data interchange (EDI). This includes eCommerce platforms such as Amazon, Shopify and Magento, so that orders placed on those platforms feed directly into the WMS. Subsequent actions by the 3PL (e.g., shipping) are then reported by the WMS back to the eCommerce platform. The WMS can also integrate with parcel carrier portals for real-time shipping updates. 
• Ability to customize stock rotation and handle recalls: WMS systems support 3PL inventory rotation protocols like FEFO and FIFO. For food and pharmaceutical companies, the WMS is a key component of product recalls. In the event of such a recall, the WMS will assign the flagged items to a segregated hold location and prevent them from being distributed. 
• Just-in-time capabilities: 3PLs like Kanban that specialize in just in time arrangements with manufacturers lean on their warehouse inventory management systems to streamline the process. For example, if a 3PL stores raw materials for a manufacturer, it will be notified by the WMS whenever an order is placed requiring those materials. The 3PL can then immediately supply the manufacturer. 
• Custom reporting: WMS systems not only perform an almost endless array of functions, they can report on them too. From standard stock reports to fully-customized KPIs that matter most to your stakeholders, the 3PL WMS can give you the reports you need when you need them.
• UCC-128 label support: Most WMS systems can handle retailer UCC-128 labeling for all major retailers including Walmart, Target, and Costco.

Lean on Kanban’s WMS for 3PL inventory management and much more

3PLs enable retailers and manufacturers to compete more effectively using an agile, asset-light logistics model. Companies are able to leverage a 3PL’s physical infrastructure (warehouse network) and the systems infrastructure (full-featured WMS and TMS systems) to support growth without investing to purchase and support this infrastructure. In this way, logistics costs can parallel your revenue stream. To learn how you can put Kanban’s 3PL inventory and logistics capabilities to work for your operation, contact us today.