Warehousing Ops: Don’t Forget the Data

Warehousing is changing as the supply chain becomes more distributed and flexible. Specialized service providers prove helpful in the effort, but can add layers to the route that products take from manufacturer to consumer.

Because these third-party logistics providers (3PLs) specialize in operations that are typically not core competencies of their customers, they frequently offer services at costs that are compelling. Still, not every 3PL delivers the same services, and when one of the missing pieces is real-time data about your shipments, the advantages of those lower costs can disappear quickly.

The main problem lies with 3PLs that have not deployed fully integrated software systems and rely on manual processes, disconnected applications, and immature data handling. Any particular 3PL may have a great warehouse management system and even a spectacular transportation management system in place. But having advanced applications that manage individual aspects of an operation can leave data gaps that need to be handled manually. And without direct and instantaneous updates, information can get old before there's time to act on it.

With the increasing emphasis on supply chain visibility, anything that limits access to the status of your orders puts the company at a competitive disadvantage. A delay of a few minutes may not seem insurmountable, but that short time can easily turn into hours or even days when left to manual processes. And updates delivered using spreadsheets or other detached tools make the situation even more difficult. These updates can become outdated as soon as they are created.

Certainty of time and date of delivery is increasingly critical as companies of all kinds reduce or eliminate their warehouse operations. Manufacturers that rely on just in time (JIT) delivery to meet production schedules can be caught off guard when unannounced delays hold back product assemblies. And retailers that keep all stock on the sales floor can face out-of-stock conditions when an unforeseen delay affects their inbound shipments. Perishable goods like groceries are at even greater risk when out of stock becomes out of date and results in spoiled products.

The solution to keeping data flowing and up to date, and thus keeping shipments on track, is automation. That may seem like an obvious statement in this age of cloud computing where it seems all kinds of data are available at any time and accessible from anywhere. However, smaller operations may not have made the investments necessary to fully automate their processes and provide viable ways to make that information available as needed.

The process of choosing a 3PL should include reviews of their capabilities that go beyond their basic logistics capabilities and include the technologies they use to manage their operations. Look at their capacities for real-time updates, integrated application suites, and their overall technology platform. Look for easy access to their processes dashboards that let you view specific shipments and schedules. Finally, find out what kind of proactive alerts they deliver that let you know about problems, or even potential issues before they become disasters. Without these capabilities, your 3PL cannot provide the best value to your organization.

10 comments on “Warehousing Ops: Don’t Forget the Data

  1. elctrnx_lyf
    July 5, 2013

    The logistics provider should have the automated system to provide real time data which could help the customers to know the status of the shipments. The logistic service providers shall have the complete automated system which also can send proactive alerts.

  2. Scott Koegler
    July 5, 2013

    @elctrnx_lyf that's exactly the point. The Logistics provider is the monkey in the middle that collects and dissemiates the data (and the products). That's why it's important to be armed with the questions you want answered as you're selecting a 3PL. There are plenty of small players that are still in the process of getting their data infrastructure built. Their customers will be the ones helping them to work through the mistakes along the way.

  3. _hm
    July 6, 2013

    Real time data is attractive feature. But that should be supported with call center human interaction and eventual service to get box to customer. e.g. Fed-ex/UPS data is flowless. However, when they miss or delay your packet, contacting customer service makes your life so so difficult.

    There should be proactive real person ineraction form 3PLs if normal flow of data is disturbed.


  4. SP
    July 6, 2013

    Yes the follow up and tracking of a shipment is the most bugging part for the customer. The logistics companies need to be more customer centric and if there is a delay they must inform the customer in advance and the reason behind the delay. But this seldom happens. I remember a situation where the normal shipment would have taken 1 day but it took more than 15 days and the shipment company officials were clueless about the delay. All they were doing is to pass the buck from one office to another. And the online tracking was not even getting updated. The situation is horrible when the company uses shipping partners in different states.

    July 11, 2013

    I think the problems occur when the 3PL systems are not integrated with your own and then things fall through the cracks.  Sometimes the 3PL folks also are nto too forthcoming with data for some reason and this does not help either.

  6. Scott Koegler
    July 11, 2013

    Agreed. Integration between systems is a tough act, but automated data transfer and updates between systems is achievable when it's a priority for both companies. The standards already exist in several forms but ultimately need to be incorporated properly to become useful.

  7. t.alex
    July 29, 2013

    Yes, and it's not just between any 2 companies. There has to be a way that multiple companies can participate in the process with a common standardization.

  8. SunitaT
    July 31, 2013

    A company that manufactures goods, needs to be visible. With so much competition to worry about, time of delivery is crucial. While the goods are sponsored, the additional services that could have decreased downtime to a minimun by quickly handing out shipments to local markets, often fail to do so. Supposing a company makes bricks and promises to deliver to an overseas market within a timeframe. There is a delay in the delivery and the company finds that the market has settled for another brick making company. The communication between companies and SP's should be fast and uncomplicated.

  9. SunitaT
    July 31, 2013

    ''Warehousing can add layers'': some of the best services do not come cheap, and the price is added to the original price of the goods. This is a big nuisance to companies and customers alike.

  10. Scott Koegler
    July 31, 2013

    Certainly every service needs to compete on its own merits and costs, not to mention efficiency. In general, companies that concentrate on one particular specialty (in this case – warehousing and shipping) need to be able to do better in all ways than the companies that are outsourcing the function to them. The competitive marketplace removes those companies that don't provide benefits, and will reward those that do.

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