A 3PL warehouse is primarily focused on managing the inventory and shipping needs of an off-site supplier using a variety of tools. Most successful 3PL’s use EDI (electronic data interchange) integration, which is the structured transmission of electronic documents between the supplier and the 3PL.
There are significant benefits for the supplier and a 3PL warehouse from using EDI technology. EDI transactions eliminate the need for manual data entry and increase both accuracy and speed. They allow the 3PL to handle many more shipments each day, and provide better customer service.
EDI transactions are the easiest way to scale a warehouse operation. EDI is an effective way for 3PL’s to manage inventory, packing and shipping processes. The warehouse has the ability to take on numerous suppliers and maximize the discounts through various carriers including UPS and FedEx. Most pass the savings on to the supplier in an effort to develop a strong working partnership.
Using electronic transmission, the data can be shared between company servers without the need for human interaction. Typically, an EDI transaction will use a form that meets the needs of the supplier and the 3PL. Through integration, the communication is streamlined and eliminates many of the common friction issues caused by a manual supply chain operation.
Foundation for Success
Effective EDI integration with a 3PL is built on a solid foundation of planning and testing with the supplier or the supplier’s third party EDI provider. The result is EDI transactions that effectively communicate shipment directions from the supplier to the 3PL and from the 3PL back to the supplier to inform them of goods that have been shipped to distributors, retailers, and other businesses.EDI Integration with a 3PL by Steve Brewer