In today's competitive landscape, third-party logistics (3PL) providers are under immense pressure to meet consumers' growing expectations for fast and free shipping. To keep up with these demands, 3PLs are strategically expanding their networks and geographic reach by adding more warehouses. However, managing multiple warehouses presents a unique set of challenges, particularly when it comes to managing inventory, orders, and service-level agreements (SLAs). Catering to customer and consumer needs becomes complex when you’re providing services to multiple customers and hundreds, if not thousands, of products. Manual intervention simply isn’t a sustainable solution as you scale your warehouse network.
Manually Managing Chaos and High Consumer Expectations
Receiving orders from your customers is often thought of as the beginning of the journey for consumers, but as the Wall Street Journal has beautifully shown, two-day delivery on a phone charger often begins two months before a consumer adds the item to their shopping cart. Once received, multi-warehouse networks need to sort orders to the right facility based on the destination, stock availability, and any additional needs unique to the customer. Manually managing orders and allocating them across multiple warehouses can be a time-consuming and error-prone process. 3PLs often rely on data entry, spreadsheet management, and phone or email communication to assign, route, and split orders based on the criteria mentioned above. This manual approach can lead to inefficiencies and errors, ultimately resulting in shipping delays, unsatisfied consumers, and strained relationships with clients.
The complexity of order management is further exacerbated by the diverse SLA requirements of different customers. Some clients prioritize fast delivery and may be willing to incur higher fulfillment costs, while others prefer free shipping and want the 3PL to minimize costs while still meeting delivery deadlines. This often means various packaging and carriers are used to align with SLAs.
Yet, at the end of the day, 3PL providers face the difficult task of balancing consumer expectations for fast and excellent service with the reality of thin profit margins. Expanding warehousing operations to multiple locations can present both opportunities and challenges in this regard. On the one hand, it enables 3PLs to better serve their customers by providing faster and more cost-effective shipping options. On the other hand, this can introduce increased overhead costs and introduce additional complexities in coordinating inventory, order routing, and SLA tracking.
To provide flexible and personalized service to customers at scale, the right technology is the only sustainable solution.
Intelligent Business Rules
One way to address the challenges posed by diverse customer requirements is through the use of intelligent business rules. These rules allow 3PL warehouse managers to create customized order routing strategies that cater to the specific preferences of each client. For example, a customer who prioritizes fast delivery might require orders to be split between multiple warehouses to ensure items arrive on time, even if this results in higher fulfillment costs. Conversely, a customer focused on free shipping may prefer orders to be consolidated in a single warehouse to minimize costs, even if it takes longer for items to reach their destination.
Intelligent business rules help streamline decision-making processes and workflows using condition-based logic to apply actions, similar to IFTTT (If This, Then That). By implementing intelligent business rules, 3PLs can adapt to the unique needs of each client and order, optimizing fulfillment without ignoring the unique needs of each client. This not only helps to meet consumer expectations but also fosters stronger relationships with clients, which can lead to increased customer retention and loyalty.
Yet, leveraging intelligent business rules to automate the splitting and routing of orders is only half the battle. If your systems are not communicating together and inventory counts are inaccurate, no business rule or manual oversight will cure your headaches. Extensiv understands the value of connectivity when errors lead to shipping delays and incurred costs while risking relationships with clients.
Simplify Your Network with Extensiv
Extensiv Network Manager seamlessly integrates with warehouse management systems (WMS) to deliver full visibility into inventory and orders across all warehouses and offers powerful orderbots that optimize fulfillment with intelligent automation. Our new innovative platform can automatically route orders to the most efficient and cost-effective facility based on customer preferences and real-time inventory data. By streamlining the communication of inventory levels and actions on orders, 3PLs can greatly enhance the efficiency and accuracy of their fulfillment processes, ultimately improving consumer satisfaction.
Minimize manual effort with robust business rules called orderbots that process each incoming order through a wide range of filters that trigger specific actions. Orderbots provide unique solutions for 3PLs of all shapes and sizes by processing granular details and layering rules to ensure actions are accurately executed. Personalize workflows to provide unprecedented flexibility to your clients and uncover opportunities to grow your bottom line through operational excellence.
Whether your inventory is strategically divided, or your clients have intricate requirements for fulfillment, Extensiv Network Manager and orderbots have the flexibility to solve intricate scenarios with an easy-to-use setup. Recently run out of stock for a product at your west coast facility but still need fast shipping to Arizona? No problem. By selecting a few filters and actions from a dropdown menu, Extensiv Network Manager can update the shipping method and assign a backup warehouse to fulfill from. There’s no coding or development skills needed to simplify your warehouse network.
Whether you’re a 3PL with multiple warehouses or partnering with others in a 4PL network, Extensiv Network Manager delivers seamless connectivity to scale fulfillment and provide unparalleled service to your customers. Learn more about how Extensiv’s platform can overcome disjointed and manual workflows with dynamic technology that sets your business apart from the competition. Request a demo today!
