3PL Case Study
Third Party Logistics (3PL) providers exist in a highly competitive market place providing outsourced logistics services to other companies. Typically this will involve specialist integrated operation, warehousing and transportation services, scaled and customised to the customer’s needs.
Due to the highly competitive nature of the industry, margins tend to be tight and 3PL providers need to leverage effective IT systems in order to turn their logistics operations into a competitive advantage. Along with cost, speed is also of the essence, with system implementations often required in only a few weeks.
CSfD has a proven track record, providing agile systems in record times for a leading 3PL player. In a typical example, we installed a system in only six weeks from the point of project kick off.
The first phase of the project was to install our standard KDS system. The standard KDS system is rich in functionality and able to run effective fast order entry processing, warehousing (WMS) and delivery processes to reduce inventories, cut transportation costs and speed delivery. This was sufficient to allow the 3PL to commence servicing the contract, avoiding delays and costs in customising the system up front.
Phase two of the project bagan to look at the specifics of the contract and resulted in the carefully controlled application of changes to the basic system, in order to optimise performance. From the outset we were able to integrate with the end customer’s system, providing them with valuable contract related information.
Changing trends in the 3PL market place
The traditional, or standard, 3PL operation is concerned with basic picking and packing, warehousing and delivery processes. The trend is moving away from this model to a more sophisticated one, where 3PL are expected to increasingly apply value added services to their processes and activities. As part of this trend, 3PL are increasingly being expected to take over order entry processing requirements and many of the traditional WMS system providers are not well geared to this particular requirement. KDS is able to offer the best of both worlds, a highly effective sales order processing service coupled to a backend WMS. This means that the 3PL does not have to compromise between a traditional WMS system and the more specialist requirements of high volume fast order entry processing. We expect this trend to continue as companies increasingly look to outsource as much of their logistics operations as possible, including order taking, in a bid to keep costs down.
Procurement is another area where 3PL are expected to increasingly add value, equally as important as order generation, with 3PL taking responsibility for product availability and levels of inventory. KDS has full demand pull capabilities to monitor stock consumption trends and automatically calculate optimum stock holdings.
KDS has been purposefully designed to be very flexible, easy to change to manage ongoing requirements - including extension into sales and purchase ledger activities - and readily interfaces to a host of third party products. Occasionally, our system contains more functionality than the customer needs. Rather than struggle to maintain an overly complex system, KDS retains the ability to ‘switch off’ certain features and keep it simple.
Web offering
AXIS provides a secure business to business web site that enables the 3PL to offer their customers direct, online access to their inventory and order processing systems, 24x7x365, from virtually anywhere in the world and on a whole range of devices. Customers can check prices, check availability and place orders, all in real-time, using any web-enabled device. Examples of AXIS in practice:
- To provide access for in excess of 700 stores, to place orders as stock is used throughout the day, directly in real time onto the KDS system.
- The customers of the 3PL use the system to check on stock.
- The customers of the 3PL are able to use unmanned stock locations using handheld devices.
