Warehouse management system (WMS) software is the most implemented technology by third-party logistics (3PL) warehouses at 84%. However, having a WMS alone does not allow the software to operate at its full potential. One of the biggest advantages to cloud-based WMS is its ability to integrate seamlessly with other technologies and software to automate and streamline warehouse processes. The 2022 State of the Third-Party Logistics Industry Report highlights the technology transformation as one of the key trends in logistics this year as the cloud-based WMS market continues to grow. But, neglecting to use integrations results in underutilizing this technology.
What are the top integrations for WMS software? Warehouse management systems allow countless integrations with different hardware and software, but some integration types are more common–and arguably more useful–than others.
Third-party logistics (3PLs) should consider implementing these top 5 integration types to get the most out of your WMS.
1. Accounting and ERP Integrations
Only 28% of 3PLs use accounting integrations, but this software is critical to maximizing warehouse profits. How long does it take you to create invoices for billable events in the warehouse, and how long does it take you to get paid for those invoices? Probably not as quickly as you would want, considering the longer it takes you to create and send invoices, the longer it takes you to receive payment for services.
If you leverage a WMS specifically designed for 3PLs (like Extensiv 3PL Warehouse Manager), your WMS software will tackle the first issue of creating invoices by automating billing. A WMS can capture all billable events including receiving and storage fees, pick/pack fees, and shipping fees among others and automatically generates invoices at the end of the billing period organized by the customer. This functionality is a real timesaver and helps immensely with accuracy as no billable events go unnoticed, but without integrations to an accounting platform like Quickbooks (online or desktop), your software may only tackle half of the job. With integrations to accounting systems, you can instantly transfer these invoices and organize them, consolidate them into a single monthly statement, and send them to your customers for payment. These integrations make accounting processes that would manually take days to accomplish automatic.
2. Shopping Carts/Marketplace Integrations
Shopping carts and marketplace integrations ranked slightly higher with 33% of 3PLs using them, but ecommerce trends this year make adopting these integrations a must for any 3PL looking to stay ahead of the competition. As ecommerce continues to grow with revenue expected to reach $502.5 billion in 2022, shopping cart and marketplace integrations that connect via application programming interface (API) connections to automate ecommerce fulfillment improve warehouse efficiency by streamlining the orders process.
Rest API connections allow ecommerce channels and your WMS to communicate and send information back and forth regarding orders and inventory levels. For example, one of the more popular shopping cart platforms, Shopify, connects to the WMS via API and automatically pushes orders through to the WMS when they come in with all order information included. No more taking orders over the phone and having to manually input ship-to information! The WMS also communicates the inventory levels in your 3PL back to Shopify to avoid overselling products on the online platform.
The necessity of automating ecommerce fulfillment with shopping cart platforms is why Extensiv acquired CartRover–the leading platform for connecting order sources with order destinations like WMS software–in late 2021. By creating standard workflows, CartRover (now Extensiv Integration Manager) enables any 3PL using a WMS to automate and streamline order flow from any of the 100+ order sources (e.g., shopping cart or marketplaces), significantly boosting their ecommerce and omnichannel fulfillment capabilities.
3. EDI Integrations
Electronic data interchange (EDI) is one of the more frequently used integrations at 39%, but many more 3PLs could take advantage of EDI to support their customers’ retail operations and fulfillment. Whereas API and shopping cart platforms integrate to allow different software platforms to communicate with each other, EDI enables document exchanges between retailers, warehouses, and manufacturers. The documents most used in EDI include purchase orders and shipment notices like advance shipping notices (ASNs), enabling the receive against ASN functionality.
Certain retailers require EDI usage, so adopting EDI can open up business partners for your 3PL, but this is not the only benefit of using EDI integrations. The EDI document exchange increases warehouse efficiency by automating transactions that would otherwise require error-prone manual entry, like purchase orders, as well as accuracy because EDI documents require a particular format for processing. Additionally, EDI increases communication between retailer and warehouse: the retailer can send an ASN to let the warehouse know what inventory is coming in a shipment, and then the warehouse can receive against ASN to let the retailer know what the actual counts of received inventory are so all parties are on the same page regarding inventory levels. Like API, EDI digitally automates many of the transactional processes of the warehouse for faster and more precise processing.
4. Mobile Barcode Scanning
Mobile barcode scanning was the second most used technology by 3PLs (behind WMS) at 53%, and it is the only hardware integration included on this list. Given that more than half of 3PLs already use mobile barcode scanning, most 3PLs are already aware of its benefits in improving efficiency and reducing errors, but if you are not already using mobile barcode scanning integrations, you could be wasting a lot of time and money on inefficient processes.
Mobile barcode scanning integrates with a WMS to enable the system to receive and understand scanned barcodes as inputs in various fields throughout the platform. For example, at pick time, you only have to scan the barcode of the item you are picking for the system to mark it as picked; there is no need to write down long SKUs, UPCs, or serial numbers as the system records all that data with a single scan. At pack time, you again just scan the barcode on the item you are packing, and the system verifies that the item is correct, significantly reducing manual errors that result in shipping the wrong item to a consumer. You can even scan the packaging you are using for a shipment so the system can record the size and weight of a shipment to price out shipping fees. But these are not the only applications of mobile barcode scanning. Mobile barcode scanning also comes in handy verifying receipts, receiving against ASN, cycle counting, auditing inventory for quality, and more. In warehousing, time is money, and mobile barcode scanning integrations are timesavers in many warehouse processes, making them a key tool to maximize profitability.
5. Shipping Carrier Integrations
The shipping industry has changed drastically in the past 3-5 years and so, too, has the underlying technologies that support this process. In the old world, warehouses generally shipped directly with one of USPS, UPS, or FedEx. This was a simple process that warehouses might not even use software for–it was a land of spreadsheets and paper.
As ecommerce volumes have risen, those “Big 3” carriers concluded that they could not support all of this volume themselves directly. All three companies have been consistently raising their rates and plan to continue to do so in 2022. Additionally, these companies stopped giving volume discounts to smaller shippers, essentially “firing” these customers.
This section of the market is served by a variety of resellers, both well established and new to the market. These companies purchase shipping labels from USPS and others in bulk and resell them into their customer base. Pitney Bowes is a leading provider of USPS-based transportation and a leader in ecommerce with a 100-year history of service. Buku leads a new wave of software companies leveraging next-generation technologies to enhance and improve the shipping experience. Collectively, they are creating a new ecosystem of transportation resellers, and that ecosystem continues to evolve to meet the specific needs of each niche in the shipping market.
Extensiv 3PL Warehouse Manager’s Small Parcel suite is a player in this shipping ecosystem, utilizing shipping carrier integrations to connect directly to different carrier accounts to make shipping packages a breeze. Once you pack a package, you can use Small Parcel to get exact shipping rates for each carrier account loaded into the system. This means that Small Parcel uses negotiated rates when connected to the 3PL’s shipping account that has a special contract with shippers. Small Parcel also enables multiple accounts for a single carrier, so you can use your own shipping account or the accounts of your customers if you want your customer to pay for shipping. Another key benefit of Small Parcel is the rate shopping feature, where you can compare rates across carriers and service types to find the most affordable shipping option with the fastest delivery service. Once you choose a shipping service, all you have to do is press a button, and the system generates shipping labels ready for printing as well as tracking numbers for the shipment. Shipping carrier integrations like Small Parcel reduce the amount of software platforms you need to use to get shipments out the door, improving efficiency by offering an all-in-one shipping solution.
Technology is a must in today’s third-party logistics industry, but having the right technology in the form of a WMS is only half the battle. To succeed in today’s market, you need to maximize how you use your technology by leveraging integrations and taking advantage of all that your WMS has to offer.
To read more about technology trends for the year, read the 2022 State of the Third-Party Logistics Industry Report.