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The rise of automation in 3PL industry

Surbhi Aggarwal

26th Mar, 2020

3PL

How you sell matters, what is your process matters but how your customers feel when they engage with you matters more. Selling is the most exciting part of a business. But what happens when a customer places an order? It has to reach the right person, at the right place and at the right time. And here come the 3rd party logistics providers in the picture to ease the above task. With the changing supply chain dynamics, the 3PL suppliers have geared up to become the catalyst in the chain to ensure accurate and timely order fulfilment.

To become the real catalyst in the process the industry has set to make moves towards advancing their operations through technical innovations such as automation and advanced software solutions. With the emerging ecommerce sector, 3 PL industry has to undergo several operational shifts in order to meet the ever-surging demand. It is changing the shape of e-commerce product distribution by providing a range of flexible storage and distribution services to its customers.

 

An amalgamation of 3PL and automation

1) Pick-Pack-Ship:

A 3PL company is more than simply a partner in the value chain for a company. It organizes the whole process of order fulfilment and owns it end to it till the last-mile delivery. Vast item selections, omnichannel order fulfilment, same-day shipping options, and advanced order tracking have all become necessities to compete for business. And this is where automation becomes an inevitable choice for 3PL providers. Solutions such as automated picking technologies and automated storage & retrieval system act as a catalyst in the operation.

2) Brains in Motion:

3PL partners use intelligent software to process the entire order fulfilment in cohesion and coordination. Automation fulfils this requirement of 3PLs and boosts the efficiency at every stage, be it picking, kitting or assembly operation.

3) Store-in-the-Hump:

3PL companies facilitate inventory management and handling peak season demands. AI-powered solutions in 3rd party logistics inventory management allow for systematic storage and retrieval of warehouse material, streamlined inventory management, and facilitation of order fulfillment.

4) Space No bar:

With many 3PLs serving different customers, space optimization is essential when housing so many SKU varieties in a single warehouse. Automation in 3PL can augment warehouse height utilization, unlocking higher storage capacity thus delivering more value for the same floor space.

5) Returns are welcomed:

Returns handling accounts for almost 30% of the purchase price in an ecommerce business. The modular features of a robust software solution ensure effortless handling of returns via proper data integration across all systems thus enhancing supply chain & inventory management, with positive ripples spreading to deliver enhanced customer experience and satisfaction.

In recent years, the 3PL industry has expanded at an unprecedented rate with an increase in revenue of 21.6 percent between 2017-2019. This unrelenting growth is attributed to the aspirations of retailers to stay competitive and meet increasing consumer expectations for on-time and accurate deliveries. They are tapping 3PL providers to augment their order fulfilment capabilities. The global 3PL market is projected to reach over $1,100 Billion by 2024 as a wide range of industries turn to these providers to handle various levels of warehousing, order picking, packing, transportation, and shipping operations.

Some of the 3PL players still deter to adopt automation into their system. Unpredictability in ROI is one of the top reasons for keeping this contention. Also, there are uncertainties around the investment option in a rigid automation solution for a customer today that might not even be in the warehouse tomorrow. The new-age automation is breaking all these fallacies and emerging out as the unanimous choice for all the 3rd party logistics providers. Automated warehouses and distribution solutions have become flexible and scalable enough to deal with the dynamics of business in today’s era and ensure smooth material handling to achieve unmatched efficiency in the warehouse.

“You never change things by fighting the existing reality, to change something, build a new model that makes the existing model obsolete” and technology in building these new models every day for every industry!

3PL Automation Order fulfilment Order Picking warehouse automation Warehouse Software

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