In today's age of digital innovation, technology is nonnegotiable. According to the Harvard Business Review, investing in and prioritizing automation enables companies to provide a better customer experience, increase efficiency, reduce errors and decrease team stress. A recent survey found that 90% of employees felt more satisfied with their jobs when they began using automation tools. The growing adoption of automation and industrial robotics leads experts to project the value of the global logistics automation market size to reach over $120 billion by 2027. Here's what you need to know about warehouse automation for third-party logistics.

What Is Automation in 3PL Logistics?

Third-party logistics (3PL) automation refers to the use of technology and robotics to streamline labor-intensive logistics processes. Automation is often used in 3PL to effectively manage highly interactive tasks, including shipping and fulfillment services.

Hardware components, such as automated storage and retrieval systems (AS/RS), combined with software, such as warehouse management systems (WMS), enable businesses to manage complex operations efficiently. Automation also improves the customer experience. By automating fulfillment requests, companies can fulfill orders faster, keep costs down and meet growing demands.

How Does Automation Work?

The specific functionalities of automation solutions depend on the solution itself and the specific needs of your company or warehouse. Tools like barcode scanners and sensors that track the movement of goods through your warehouse are examples of this technology. Businesses can partially or fully outsource their retail order fulfillment services and other areas of supply chain management with 3PL integrated services, including:

• Inventory monitoring and management
• Material procurement
• Picking and packing
• Product updates
• Returns processing
• Shipment tracking
• Shipping and receiving
• Transportation
• Warehousing

The automation capabilities of 3PL solutions help businesses accomplish their most essential tasks, like accurate order fulfillment, while minimizing human interaction. These flexible and easily scalable solutions allow staff to focus on high-priority needs like customer satisfaction.

Benefits of Automation in 3PL

Many companies have already made the shift to implement automation and robotics for a competitive edge. Check out these benefits of automation for third-party logistics companies.

1. Efficient Order Fulfillment

Order fulfillment speed and reliability are critical in the logistics industry. In a traditional manual warehouse or distribution center, workflows are often separated across distances. Employees typically must physically look for and retrieve items before they're shipped, which can be time-consuming and bring down operational efficiency. With automated technology, companies can speed up the key processes involved in fulfillment, from receipt of goods to item storage to order shipping.

Rapid order fulfillment also enables companies to maintain more competitive operating margins by reducing the number of processes and equipment needed in the warehouse. When items are picked, packed and prepared for shipment more quickly, companies fulfill orders more quickly. These faster delivery times are essential for improving customer satisfaction.

2. Reduced Costs

Automated systems can help reduce costs in several ways. For instance, manual data entry errors can lead to costly mistakes, while manual labor for repetitive tasks can result in unnecessary expenses. With more errors comes an increased likelihood of returns — further impacting revenue and taking up more time.

By automating certain processes, companies can benefit from significant cost savings across multiple areas of the order fulfillment pipeline. Because order fulfillment is also more efficient with automation, companies can save on overhead costs by maximizing employee time and optimizing resource usage.

3. Increased Accuracy

Human error can be very damaging to logistics companies. Incorrect documentation, storing items in the wrong location, miscounted items, inventory discrepancies and improper notations are a few examples of errors that often occur in a warehouse. Inbounding and picking departments are particularly vulnerable to human error due to the nature of their tasks, which often involve checking and retrieving items under time pressure.

Automated solutions can help staff members improve their precision and efficiency by ensuring a smoother operation. For example, barcode scanning and associated technology can significantly reduce the chance of sending the wrong item to a customer. Other automated solutions can help employees quickly verify items before they leave the warehouse and ensure correct inventory.

4. Enhanced Flexibility and Scalability

In the modern age, supply chains must be flexible to survive periods of volatility. During the COVID-19 pandemic, businesses had to shift their processes to address disrupted shipping, delays and shortages. Today, this agility is still needed to meet rising challenges. For repetitive tasks, automated solutions can be programmed and adjusted to optimize the supply chain without the need for major staffing changes.

Automation also enables logistics companies to respond to real-time market fluctuations. As priorities change, businesses can rely on automation tools and technologies to quickly shift their focus without too much overhaul. Alternatively, companies need to depend on a solution that can scale itself. For instance, adaptable automated solutions are essential during peak demand spikes throughout the year, allowing companies to accomplish more by expanding or constricting their automation needs.

5. Improved Employee Experience

Automation can help reduce the cost of labor and improve the experience of associates on the floor. For example, innovative solutions make jobs easier, safer and more enjoyable. A well-coordinated workflow can reduce the risk of accidents and create safer, more positive work environments. According to one report, 62% of candidates said they would be more likely to apply for a job with a company that has invested in automation. Additionally, employees at companies with high levels of automation reported being the happiest and most optimistic about their careers.

This is particularly beneficial for employees and employers, as the rise of technology has also generated concerns about job availability. Fortunately, automated 3PL solutions are designed to work with people, not just for them. This means employees can move from repetitive, mundane tasks to more complex and value-added activities. With reduced picking and retrieving obstacles, automation can also reduce the physical strain on workers.

As automation makes day-to-day tasks easier, companies may see improved job satisfaction, increased engagement and reduced employee turnover. Smoother and more efficient operations result in enhanced workplace productivity overall.

6. Maximized Warehouse Space

Growth, market changes and seasonal spikes can all impact your company's warehouse needs. Manual warehouses are more likely to have to use every inch of space for their storage capacity and processes, while automated warehouses can maximize their warehouse space.

For instance, automated picking and packing systems help companies efficiently retrieve items without using as much physical space for the same tasks. Warehouse automation in 3PL can help keep items organized and simplify the picking process, while other types of equipment can retrieve items from higher locations so companies can maximize vertical storage.

7. Strengthened Supply Chain Resilience

While implementing an automated solution won't necessarily strengthen your supply chain overnight, these solutions enable your business to keep moving forward no matter what you face. For example, automation can help companies reduce reliance on manual labor, which can be very vulnerable to human error and disruption.

Automation also frees up valuable employee time so they can focus on more challenging, innovative work. In a time of volatility, automation allows your company to adjust to rapid changes in demand or availability in supply. Automating repetitive resiliency tasks, such as backup and recovery operations, can also help your business proactively identify problems before they get worse.

8. Greater Visibility and Transparency

Automation for 3PL companies makes it easy to break down any complex workflow into manageable, visible steps. Gone are the days of trying to reconcile inaccuracies or pinpoint why a customer's item was accidentally sent to the wrong address during shipping. Today, automation allows companies to have real-time visibility in their supply chains and resolve pain points more efficiently.

Automation also allows companies and their partners to collaborate more effectively by upholding transparency. With an automated tool and a reduced risk of human error, companies can continuously evaluate and strengthen relationships with clients along the way.

This enhanced visibility and transparency also helps companies gain valuable insights and highlight areas for improvement. When all steps are clearly organized and laid before you, it's much easier to determine if additional steps can be automated or if certain processes are too nuanced for automation to improve.

Why Should 3PL Companies Use Automation?

Now that you know how automation improves 3PL operations, it's important to know how it can overcome existing obstacles. The above advantages can help companies address many of the challenges occurring in the logistics industry, including:

1. Lack of Planning

Supply chain resilience doesn't exist without planning and preparation. Between involving international logistics and environmental events, businesses may experience many supply chain disruptions and have to reconsider their strategies. By leveraging modern technology, you can help mitigate disruptions in your supply chain and prepare for demand spikes or market volatility.

For instance, scalable solutions that enhance visibility into your operations can help you anticipate and adapt to disruptions more effectively. With automation on your side, you can count on higher efficiency, larger margins, fewer human errors and flexible warehouse management.

2. Inefficient Employee Management

A manual logistics or warehouse workflow involves many moving parts. If you're a logistics manager, it's not possible for you to be everyone at once. However, this means many inefficiencies can go unnoticed. Using automation can help you identify which repetitive, low-value tasks can be automated. With automated solutions, things will naturally move more efficiently over time, which will help everyone stay on the same page. Communicating automation implementation to employees can help them understand your expectations and their responsibilities with this new shift in workflow.

3. Adhering to Regulations

Compliance requirements and laws are constantly changing, and the logistics industry is no exception. New local and international compliance standards mean companies must update their operations continually. Leveraging technology can simplify this complex and time-consuming process.

By streamlining repetitive tasks and ensuring an efficient workflow, automation solutions free up more time for you and your team to monitor the regulations that affect your operations. Additionally, reducing human errors with automation can help minimize operational disruptions and potentially reduce your risk of penalties.

4. Inaccurate Inventory Reporting

Proper inventory management is the lifeblood of your logistics operation. Outdated systems and human error can both contribute to inaccurate inventory reports, inevitably leading to lost profits and missed opportunities. Automated solutions designed with modern technology and innovative features can help you take the guesswork out of inventory management. 3PL integrations enable inventory monitoring so you can easily see and manage your inventory to ensure correct orders and shipments.

5. Poor Shipment Tracking

Customers and companies alike become frustrated when shipments are delayed or lost in transit. Outdated information and slow systems make it challenging to get visibility into the status of a delivery, which can result in a negative customer experience. 3PL integration solutions that offer shipment tracking features enable you to easily see inbound shipments, post office imports and exports, and goods shipped to customers in one central location. By easily checking the status of your shipments, you can anticipate potential logistical problems and avoid costly delays.

Key Areas Within 3PL Operations That Can Be Automated

The advantages of automation for 3PL companies cannot be overstated. 3PL automation can cover every step of your logistics workflow. From minimizing costs associated with processing time to increasing customer satisfaction with instant updates, 3PL fulfillment solutions can streamline all your processes. 3PL automation solutions can also help you effectively communicate with your business partners, reduce manual data transfer and provide real-time data updates.

When looking for the right 3PL solution, it's important to find one that integrates with your other business platforms. Integration with shipping and sales channels ensures all parties have access to necessary data, which can help reduce bottlenecks and disruptions in your supply chain. Additionally, convenient integration allows you to see important information like delays, departure times, product shipment details and other updates that give your team enough time to react to potential changes.

Though many logistics workflows are similar, your company's needs are unique. A 3PL fulfillment solution that can be fully customized to your specific requirements can help enhance productivity across your entire system and save you time and money.

3PL Integration Solutions From ConnectPointz

As a logistics manager or operation executive at a 3PL company, you know how quickly insufficiencies and poor coordination can harm your business. Implementing 3PL automation solutions can help you gain visibility and control over your supply chain and streamline your back-end processes. At ConnectPointz, we specialize in integrating business systems with custom and preconfigured automation solutions to improve workflows. Our 3PL fulfillment services can optimize your e-commerce operations by automating vendor communication and data entry.

Our customized 3PL integration solutions are designed to meet needs, from material procurement to warehousing to shipping and receiving. Contact us for a quote, and our qualified professionals will be happy to help.