Aug 11, 2020 3 Min READ

Five Incentives for 3PLs to Use Business Intelligence
Chelsea Mori

Chelsea is an experienced marketing and demand generation strategist with over 17 years of B2B experience. She oversees demand generation strategies, campaigns, and brand awareness programs to solidify Extensiv as the leader in warehouse management software. A multi-dimensional marketing operations professional, Chelsea has built a track record of driving new business through creative demand and lead generation programs.

3 Min READ
Five Incentives for 3PLs to Use Business Intelligence


Warehouses produce massive amounts of data daily. This data is a treasure trove of information and business intelligence for third-party logistics (3PL) warehouses. When analyzed, it provides details on core business metrics and key performance indicators (KPIs) including areas of success and those in need of attention—uncovering opportunities to increase productivity and efficiency as well as where the business can save money or increase revenue.

In addition to the financial benefits, there are significant competitive advantages. In many cases, warehouses can use this information to improve customer satisfaction and even share data with their customers to help their businesses grow.

To reap these benefits, warehouses should start evaluating Business Intelligence, or “BI” software, within their warehouse management system (WMS), that will allow 3PLs to analyze, understand, and leverage the massive amount of data they produce. Here are five of the most attractive benefits of BI and how warehouses can use data to improve their businesses.

Benefit 1: Win New Business

3PLs know the critical importance of data analytics. In fact, 99% of 3PLs agree that analytics is a necessary element of 3PL expertise. However, only 27% are satisfied with their current analytics capabilities.

Warehouses that use business intelligence can predict demand and future requirements by establishing a baseline for their operations. This will help prepare a 3PL to understand how they can then, in turn, help their customers better manage inventory, order volumes, peak season task management, and a variety of other metrics.

Business intelligence capabilities may soon become a “must-have” for many logistics businesses. According to Supply Chain Executive Magazine: “The days of third-party logistics companies competing on prices are over. The successful ones now use another factor to gain an edge: analytics.”

Benefit 2: Increase Profits

BI will provide warehouses with invaluable insights into their own operations to see exactly where they operate profitably–as well as growth opportunities.

With a global overview of their entire supply chain, business intelligence can help to identify unneeded costs and reduce overhead. As shared in the 2020 State of the Third-Party Logistics Industry Report, 3PL providers can save up to 40% on operational costs by improving decisions such as the optimal selection of inventory placement and transportation modes.

In fact, warehouses can analyze data from just about anywhere in their business to learn where they could improve operations, including: labor management, route design, mode and carrier selection, inventory planning and management forecasting, and sourcing and procurement.

Benefit 3: Build Strong Relationships

3PLs have a reputation of caring deeply for their customers. Maintaining good relationships and offering the services their customers require is very important to remain competitive in today’s logistics landscape.

Sharing data collected with warehouse customers gives 3PLs the opportunity to better understand where they can work together to improve their customer’s revenue as well. This is especially true for warehouse customers who have their own “analytics-gap” in knowing what data to review and capture. 3PLs who share this data and help their customers make more money will not only prove their value as a true-partner but earn the loyalty of their customers—reducing the chances they might move on to another 3PL provider.

Benefit 4: Improve Value to Supply Chain Partners

The ability to analyze and leverage the data flowing throughout a 3PL’s global fulfillment chains will make them a more appealing partner for OEMs, freight forwarders, shippers, delivery providers, and more.

This will lead to tighter partnerships, more preferential treatment–and increased odds that a 3PL will become a partners’ vendor of choice whenever it comes time to recommend a data-savvy fulfillment provider.

Benefit 5: Offer New Services

Investing in BI software will enable third-party logistics warehouses to understand their operations better. In doing so, they can unearth potential opportunities to find a host of lucrative new services to offer warehouse customers. These may include data analysis, predictive analytics, supply chain consulting, shopping cart integrations, and business planning.

In addition to bringing in significant amounts of new revenue, such services will allow a 3PL to differentiate themselves from the competition, increase their perceived value, and further embed itself into their customers’ operations.

Final Analysis

3PLs who thrive in the decade ahead will almost certainly do so by capitalizing on the new technologies, trends, and opportunities they have before them. Logistics businesses who invest in business intelligence will gain an invaluable advantage in an industry that continues to be more data-driven and competitive by the day.

To learn more about how Extensiv can help your warehouse prosper and grow, we invite you to request a personalized demo of Extensiv 3PL Warehouse Manager WMS form one of our experts.

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