What Did Warehouses Do Prior To 3PL Software?

It Was All Done ‘By Hand’

Remarkably, it was not that long ago third party logistics professionals managed all their warehouse functions without any 3PL wms software.  Only a few decades ago, all inventories were ordered, received, shipped and billed by manual transactions.  This undoubtedly sustained greater error potential than occurs with modern automated technologies managing a myriad of clients and customers within a contemporary 3PL provider.  It also took much more time. But there’s another factor to this long history of manual operations, with a shorter but more costly automated history of 3PL Software.  While human interactions have been drastically reduced in 3PL’s, for a time (and for some companies currently), stand-alone software was all that was used or available.  Single user 3PL software programs offered great benefits by saving time and increasing accuracy but they were far more costly to purchase and operate.

Enter web-based systems

Large corporations still often purchase in-house proprietary 3PL software systems.  Typically, these are companies that operate large inventories, often internationally, and have substantial budgets and margins within which to operate.  It may make sense for them to purchase their own systems.  However, they will also be taking longer to write and install them, require periodic upgrades (including patches or work-arounds), and hardware/servers to deliver their programs on an in-house basis. This expense and time shuts out small to mid-size 3PL’s who still may believe they have to rely on manual transactions.  Since human factors reduce accuracy and certainly are more time consuming, these 3PL’s have an alternative through 3PL software that is delivered via the internet.

Software-as-a-Service (SaaS)

The advantage to smaller 3PL’s using SaaS (and even large companies opening new markets) is substantial.  With the advent of web-based delivery systems that are accessible 24/7 from any computer browser, any 3PL can afford to boost their profitability through subscription services that are far more affordable and scalable.  What this means is that a company only pays for technology it uses.  It also means they can increase functionalities when business cycles expand or contract. SaaS delivery models (see 3PL Central) also allow for product improvements that are accessible to all users without extra costs.  There are no IT investments like hardware or consultants, or even long-term contracts.  It remains astonishing that much of wms software is still purchased as it was 20 years ago – having to buy the initial software, servers, ancillary hardware, resulting in 2 to 3 times the initial purchase price of a SaaS system.

Plus, stand-alone systems can take months to write and deploy.  Web-based programs can operational in hours.  So, it’s not always enough for a 3PL to eliminate manual transactions like days of old.  Equally important is the need to reduce costs and implementation time of in-house systems by purchasing 3PL wms software as a service.

If your company is looking to go from manual operations to automated, or from in-house to a web-based delivery system, please visit www.3PLCentral.com for further details.

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