How Wholesalers Can Improve Their 3PL Warehouse Shipping
What actually happens when you send a pick ticket to your 3PL warehouse? If you understand the process, you can improve efficiency, speed, and accuracy. In turn, these improvements can impact your bottom line both by improving relationships with your retail accounts and by avoiding chargebacks due to slow processing, short shipments, routing delays, and other errors.
Warehouse Management Systems
Even though your wholesale company has its own software system in place that tracks and processes orders, your 3PL warehouse will utilize its own WMS to manage inventory, picking, and shipping. There are many reasons why they use a WMS. Some reasons may have nothing to do with your direct needs as a wholesaler. Some reasons that a 3PL uses a WMS are:
- Charging you in/out fees, monthly storage, and special projects
- Keeping track of physical inventory
- Tracking employee metrics
- Managing shipping locations
- Tracking weights and dimensions for shipping
- Meeting vendor compliance
- Meeting customer requirements
Various 3PL warehouses process their pick tickets using alternate methods. Each will utilize different warehouse management systems (WMS) and may require simple file exchanges or PDF documents, carton labels, and BOLs and ASNs. Strange as it may seem, you might have an order in your system for months, but by the time the warehouse pulls the information into their system, there might not be a lot of time to turn the order around. They may even be entering the orders into their system manually at a stage in the order processing when deadlines are already tight. When an order must be fulfilled quickly, this extra step here that can cause problems.
File Exchanges and PDFs
Depending on the warehouse’s capabilities, you will be sending either electronic data files or PDF documents for them to pick your orders. If you send PDFs, the packing lists and carton labels are ready to go, but the warehouse will have to manually enter the orders into their system. This takes time and subjects the order to human error that can be costly and affect customer service.
If you send data files, you must also send order files and item files that the 3PL warehouse can import into their system. Item files need to be updated and sent on a regular basis. When using file exchanges, it is a good practice to send the expected receipt file as well. Once you are in the process of exchanging data files, you can receive shipped files as well to compare the two against each other.
What’s the best method? In theory, file exchanges are best, but that still leaves carton labels and BOLs to be created by the 3P, which raises other process questions. So it is usually best to work with your 3PL in the manner that they are comfortable processing orders. If you are unsatisfied with that process you may need to find a new 3PL.
Carton Marking Errors Are Common
It is common for cartons to arrive at your 3PL warehouse with carton markings that have slightly different item numbers from your own system. If left uncorrected, this can cause havoc to your inventory on an ongoing basis. You may be sending orders that include a style number that the warehouse doesn’t recognize. You keep short shipping yet you know you have the goods and can’t figure out why.
For example, your system identifies an item with the number A5436ST, but the carton arrives from overseas marked with 5436-ST-A. The warehouse uses the actual physical carton markings in their WMS because their pickers need to pull those cartons. Since those numbers are different from yours, when you send an order, they might not be able to locate the freight.
Any time there is an inconsistency between the actual carton markings from an overseas factory and the item number in your system, you are creating a potential stumbling block. There can be delays in shipping, inventory shortages, or lost freight.
All of your orders are tied to the original style number so you cannot change your system’s item number. The warehouse won’t change their system because then they won’t ever find the goods. Physically correcting carton markings at the warehouse level may be the best solution. The warehouse can then change their system style info as well. It will likely include a warehouse charge, but it may be well worth the cost. You may be able to charge your factory back as well. Charging the factory back can put them on alert and help prevent the same problem from occurring in the future. Your production team may also need to be made aware of the situation so as to avoid similar problems in the future.
BOLs and ASNs
Some 3PLs create their own BOL’s and process their own ASN’s, but many do not. Compared to BOLs, ASNs provide retailers extra detail in that the product line items are listed per box instead of per shipment. This can better alert them to when something is missing. ASN files can be data intensive so you may require outside help for processing them.
Getting BOLs and ASN’s right are critical. Timing and communication is critical. For instance, not getting timely information from your warehouse about a shipment going out can cause a delayed ASN that will result in chargebacks. It’s imperative that you make sure the information is sent as soon as the goods are shipped. For wholesalers on the east coast with west coast warehousing, that means staying in the office late until ASN’s are sent.
Tips on How You Can Improve Efficiencies with Your 3PL
Now that you are aware of some of the common issues that occur with typical day-to-day warehouse shipping orders, here are some tips that can help you improve efficiencies with your 3PL warehouse:
Work with the warehouse process not against it. If they prefer receiving PDF files, it is best you send PDf files. If they prefer data files, you need to send them data files. Unless you are their primary customer, it is unlikely that they can change all of their processes for you and remain efficient. You’re most likely not the only wholesale company they are serving, so it is best to mostly adapt to their processes. If you want to do it your way, it is best to find a 3PL that operates the way you need them to rather than expecting the existing 3PL to change.
Make sure carton markings are consistent. You need to get your production people on the same page. The problem that begins with production can become a shipping issue that results in lost revenue and poor customer service experiences. For many wholesalers carton marking inconsistencies are an ongoing issue. If the markings aren’t matching, it’s important to get to the bottom of why so it doesn’t happen again and again.
Ask your 3pl to send signed BOL’s at midday and again at the end of the day. Many 3PLs don’t send BOLs until the end of the day when the back office staff is ready to go home. Ask your 3PL to send them around midday or even 2pm so that the back office staff has sufficient time to invoice and handle factor assignments. A lot of invoicing can be knocked out during the day without the time pressure. That leaves significantly fewer documents to process at the end of the day when errors are more likely because people want to end their day and get home.
Keep track of your own storage and other charges. Depending on your agreement with your 3PL you may be paying monthly storage fees based on a complex or straight forward formula. Either way it is critical to reconcile all of your charges on a monthly basis.
All in all, improving the shipping process is critical. Making the necessary adjustments can improve efficiency and increase profitability. When you’re able to successfully fulfill orders your buyers gain trust in your wholesale company. Most buyer’s avoid writing larger orders if they don’t have confidence that you can actually deliver. Yes, pricing and product are both critical, but so is reliability. Reliable delivery is not all that matters, but if you can’t reach that threshold, cost and product won’t be enough to grow the account to its maximum potential.
Wholesale Executive Insider is a publication dedicated to helping owners of wholesale companies stay up to date with the latest industry insights to improve their operations and increase their bottom line.
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