Why 3PL Companies must align with client’s ERP data for smoother operations in 2020?
Alignment between 3PL companies and client’s ERP data is critical for the success of respective supply chains. Find out what are the possible benefits of tech amalgamation between them.
3PL companies: Collaborating with Technology
Third-Party Logistics provider (3PL or TPP) companies are independent experts who manage end-to-end logistics for companies who do not have their own warehouse and distribution facilities.
"Many 3PLs are responding with increased capabilities and greater technological expectations, something essential to the 3PL's survival. Consumer behaviors have changed rapidly over the last several years, increasing the overall collective service levels within the industry. It is impossible to meet those demands without the proper technology on the front-end to execute. And those that are not investing just won't be around."- Joe Carlier, Senior Vice-President of Sales at Penske Logistics
According to 2019, 23rd Third-party Logistics Study, customers are concerned about the technological capabilities of their 3PL partners. Emerging technologies like Blockchain, Automation, and Data-driven analytics are key trends in this sector.
Why is alignment with clients' ERP a must?
ERP is driven by data to integrate inter-firm activities and achieve full-fledged coordination with entities making supply chains more responsive. In the absence of an exchange of real-time information between the 3PL provider and the client’s ERP data, chances of errors and delays are higher, leading to gaps in performance. The capacity of a robust warehouse and transportation system with 3PL companies remains underutilized if they do not fully integrate with the company's ERP.
Example of 3PL provider performing better with ERP alignment
National Tiles, a market leader in imported tiles and stone flooring in Australia, avails the services of C.H. Robinson to handle their international freight business. C.H. Robinson is an American Fortune 500 provider of multimodal transportation services and third-party logistics company.
C.H. Robinson uses National Tiles ERP for effective planning and procurement. They find that the client's ERP can be leveraged to create one source of truth, automate certain functions and obtain visibility to products while aligning with C.H. Robinson’s network and cross-docking to support commercial orders. Further, with right information, inventory management, product delivery, and positioning can be improved manifolds.
C.H. Robinson’s tailored technology solutions based on ERP used by National Tiles required setting up Advanced Shipping Notices (ASNs) delivered via EDI and integrating detailed shipment information from C.H. Robinson's technology platform into ERP. As a result of this, National Tiles remains updated on the status of their shipments without requiring manual keying-in of shipment files and orders with the help of ASN.
National Tiles has reported a 92% increase in shipment creation efficiency and also forecasting accuracy has improved. The seamless system integration between client and 3PL company ensures full visibility from order placement to shipment and arrival of freight.
How integration of ERP data is a win-win solution
Third-party logistics companies are recognizing the importance of bridging the technology gaps; not only internally within their systems but also externally between their clients and their delivery partners. The tech partnership between 3PL companies and their clients will continue to evolve as both parties take advantage of higher data availability and enhanced ability to make decisions in real time. Further, 3PL firms can pass the cost benefits accrued by implementation of technology to their clients in terms of lower service charges. The tighter integration and collaboration through tech alignment leads to sustainable and long-term relationships between parties. Both 3PL companies as well as clients become more responsive, accurate, and deliver superior customer service when ERP of client companies is synchronized with 3PL's technological capabilities.
Creating a bridge between client’s ERP and 3PL companies is necessary for enhanced customer experience for client and 3PL provider, the customer being the client for 3PL provider and the end-user for client.
No more need to function in data silos; collaborate with Katalyst Technologies to achieve seamless integration across your business supply chain.
Also, stay tuned to know the latest technologies that 3PL providers need to have in 2020 to ace their competition. Get in touch now!
Source: Free Articles from ArticlesFactory.com
ABOUT THE AUTHOR
Katalyst Technologies is the product and service base software company which gives best ERP solutions, supply chain management solutions, HR management software etc.