Many companies have grown up having their own warehouse, processes and procedures in their own ERP to handle the business required. In many cases the in-house ERP system has been dramatically developed to cater for interfaces for shop floor or transportation systems. In the new world, companies are looking for 3PL providers to bring their expertise and scalable resources to effectively replace this part of the business, and provide significant business benefits from operational performance to cost savings.

Third-party logistics (3PL or TPL) providers typically specialise in integrated operations of warehousing and transportation services that can be scaled and customised to customers’ needs to meet the demands and delivery service requirements for their products. Services often extend beyond logistics to include value-added services related to the production or procurement of goods, such as services that integrate parts of the supply chain. A provider of such integrated services is referenced as a third-party supply chain management provider (3PSCM), or as a supply chain management service provider (SCMSP). 3PL targets particular functions within supply management, such as warehousing, transportation, or raw material provision.

In order to make this business change work, the underlying IT process and procedures must be changed to reflect the transmission and receipt of information that mirrors the physical movement of goods. Although this may be seen as a daunting task, with the right expertise this IT transformation can be achieved.

The first objective is to understand the complexity of the existing code within the in-house eco system and check for bespoke process, interfaces and code that has been specifically written to help drive the goods movement.

Once understood it is relatively simple to map high level goods movement and then plan with the 3PL how to interface to the new system. The diagram below has a high-level view of a possible scenario.3PL diagram

  • Request Mechanism.
  • Frequency of execution.
  • Access Controls.
  • Error Handling.
  • Performance Metrics.
  • Business Continuity.
  • Disaster Recovery.

G3G has recently been involved in several 3PL projects and would like to share our knowledge and experience with other companies that are looking at this business opportunity.

If you would like to know more then please get in touch.