3PLs and Enterprise Resource Planning—What You Need to Know
Third-party logistics providers (3PLs) are quickly growing in popularity, especially amongst small businesses looking to get their product from Point A to Point B as quickly and inexpensively as possible. However, between rising freight rates and capacity issues, 3PLs have a lot of hurdles to address in order to provide their services in the best ways possible. Just like the businesses and organizations they serve, 3PLs can benefit from focusing on enterprise resource planning (ERP) internally.
Here’s what you need to know about how enterprise resource planning can be used to improve workflow for 3PLs.
Depending on the size of a 3PL, getting a sense of the finer points of daily business processes can be easier said than done. This is especially true if crucial information is currently living either on paper or throughout a variety of different applications that don’t communicate with one another. ERP services can break down these barriers to offer high-level visibility and provide data that can be analyzed to further improve daily processes.
Most 3PLs are made up of numerous departments, many of which tend to operate in a silo. What does this mean? Essentially, communication between departments is not robust to the point of being able to prevent mistakes or unnecessary energy expenditures from occurring. Siloing occurs in all sizes of 3PLs but it’s particularly problematic in larger companies. By improving ERP and moving to a software platform that can be utilized across your organization, you’ll be making great strides toward “de-siloing.”
Reduced IT Expenses
There’s no getting around the fact that IT expenditures can be significant for 3PLs. The problem is especially apparent in organizations that attempt to handle IT in-house, which typically means either hiring experts that demand tall salaries or tasking your existing employees with things they don’t fully understand, leading to productivity loss. Managed ERP plays a major role in improving IT processes, and the associated costs are a fraction of what most companies spend to tackle IT needs in-house. Plus, you’ll never have to worry about non-experts handling sensitive IT issues.
Improved Relationship Management
Most 3PLs find themselves dealing with hundreds if not thousands of carriers, which can be overwhelming to say the least. It’s essential to focus on not only maintaining these relationships, but fostering them as well. ERP software can be helpful in both regards, allowing you to quickly identify which carrier may be right for a specific job but also to grow relationships over time.
With a new focus on enterprise resource planning, 3PLs can not only stay afloat in a changing industrial landscape, but thrive. Start by choosing the right software option, weighing the pros and cons between platforms and looking for a vendor that prides itself on offering great customer service. Once you’ve gone through the implementation process, you’ll never look back.