What is a 3PL?

Third-Party Logistics service providers manage outsourced procurement, distribution and transportation services for clients. Some companies focus on specific industries or some focus on specific functions such as Procurement, Transportation, Warehousing, and Distribution.

Automating Processes

In all services of Third-Party Logistics, there are optimization opportunities. In each of the main functions of the a 3PL service provider, efficiency in operations can be achieved through automation by integrating a handheld scanner, tablets or smartphones with a warehouse management system (WMS) or Enterprise Resource Planning system (ERP). This allows quick data retrieval at the point of task execution and eliminates the need to move the items near static operation lines.

In distribution processes, electronic barcodes could be generated to distribute e-vouchers that can be used as discounts for future e-commerce transactions. Marketing content can also be embedded via barcode and printed into packaging materials of physical products.

Third-party Logistics provides such service called value-added services by sticking additional labels as requested by its client. A customer can access the online digital content by scanning a QR code on the product packaging through a smartphone. This provides valuable insight to marketing team about customer journey that they can use to further improve their marketing initiatives.

In warehouse processes, warehouse goods will not move around the warehouse by itself, even if robots are used. To move the correct product and quantity from the right source location to its destination, it must be identified via labels stuck on it. These labels include key information such as Product Code, Quantity, Unit of Measure and the source and target location.

Software applications can embed data validation to ensure operation steps are executed accordingly to avoid warehouse mistakes that may impact subsequent processes such as (stock take, sales outbound delivery processes, etc.)

Another crucial element of mobility solutions is to quickly transfer information from the physical object to the mobile handheld. This is where barcode labels are very important in automation of processes.

Barcodes may contain relevant information of the object scanned that can be parsed by the software application, trigger another process or trigger validations. If such validation fails, the executor is prompted immediately and requested to re-enter information.

Barcode thermal labels for both thermal transfer or direct thermal printing facilitates quick data transfer from physical object to the handheld after scanning the barcode label. These significantly reduces potential data entry errors. Barcodes are not only used in product labeling, it can also be applied to identify documents and check for validity. In sample supplier order below, a barcode that contains the purchase order number indicates that this document will be scanned later during goods receiving processes.

On the left is an example of a purchase order that has a barcode label that contains the PO number. Next screenshot illustrates a typical goods receiving process in the warehouse and how handheld scanners can help reduce the need to manually track entries through notes on papers.

With the use of barcode, manual typing of entry is not required and will help improve efficiency within the warehouse operations. When goods have been received, subsequent processes of updating finance books can also be triggered and informing the warehouse manager that a warehouse staff is available are triggered in real-time.

Optimized Goods Receiving Process with Mobile Handhelds and Barcodes

Goods receiving process steps:

  1. Goods are unloaded from delivery truck.
  2. Delivery person provides the copy of purchase order to warehouse staff. Warehouse staff scans the purchase order barcode to check if it’s an expected replenishment order.

Barcode screen sequence: 

   a. Start screen of mobile scanner is shown below, Menu 1. Distribution is pressed.

   b. In next screen, the document number can be entered manually or the barcode scanned.

   c. Result is shown in next screen with details. This PO can be processed by clicking “Receive” button.

3.  Forklift operator processes receiving and movement of goods inside the warehouse.

4.  Operator stores the product to the storage bin and to ensure all steps are valid, he uses the handheld scanner to track all his steps:

Barcode screen sequence:

a. He scans the material, the mobile application, immediately triggers a validation if the product scanned is the product in the      purchase order number record in the WMS system. If the material scanned is wrong, then an error is shown on the screen. He then scans the destination bin label to determine if the destination bin is according to the instructions provided in the handheld. He then enters the quantity that the application also validates. Once he’s done, he clicks NEXT button.

b. He is taken to the next screen and he’s requested to finally confirm he’s done with receiving the item, before the entry is finally posted to the WMS system database. This step may also trigger automatic posting to financial books by increasing the inventory stock account.