3PL EDI: reducing operational costs with digital transformation

Costs associated with introducing and managing new processes have become a barrier for many retail businesses. Digital transformation teams are discovering more innovative and manageable ways to create greater efficiencies and savings in their organisations.

Following the pandemic and Brexit, online channels are more important than ever and international business has become increasingly complicated. For organisations targeting these key business strategies, they need to ensure they have efficient, cost-effective and scalable processes in place. 3PL EDI is just one area where businesses can achieve this…

3PL, or Third Party Logistics providers, support organisations by managing all or part of the order fulfilment processes. This ranges from warehousing and stock management, to pick, pack, and delivery. In short, organisations are able to outsource this complicated area of the business to specialised providers, called 3PLs.

Companies from SMEs to MNCs are turning to 3PLs as they enter new sales channels and scale-up. Growing the business means the need for robust processes and infrastructure. The associated costs with implementing these processes in-house can be restrictive. Onboarding a 3PL is a natural alternative. It is a faster and potentially more efficient way of scaling the business/entering new sales channels. 

3PLs have been especially useful for businesses looking to implement D2C (Direct to Consumer) and Dropship sales channels. Over the course of the pandemic, businesses have been forced to rapidly expand their channels. Many have turned to online marketplaces and/or implemented their own eCommerce enabled websites. 3PLs have helped facilitate this agility in the business strategy, especially as organisations are also increasingly expanding their businesses into new territories. 

3PL lends itself very well to EDI, largely due to the handling of order data.  

Forward-thinking organisations will implement a reliable and efficient EDI solution to support the automation of order messages data with the 3PL directly for order fulfilment.

The data included in these EDI messages can include order details such as; item information, quantity, packing information, and shipment details such as delivery locations and shipment date. Depending on the scale of the operation, shippers and 3PLs could need to communicate thousands of documents daily. Manual processing is therefore practically out of the question.  

EDI is the most reliable and secure way to exchange order data between the two parties. All of these messages can be sent and received digitally and automatically. This removes the need for paper formats such as post, email attachments and PDFs. Information is automatically transferred into business systems for immediate visibility. There’s minimal need for manual intervention with no rekeying of data.  

Organisations that do not follow a digital transformation approach risk incurring huge costs in managing manual processing of data. They will likely also miss key business data, such as reports, that could be fed into the business automatically from the 3PL. Overall, this would lead to a lack of business insight that could better inform future strategy in other departments. 

We have been supporting our clients with digital transformation projects, such as 3PL EDI, and propelling them forward with more robust and efficient business processes.  

For example, we supported a client as they entered a new market in Europe, by automating elements of their warehousing and logistical processes, as well as communications with multiple online marketplaces. The manual processing associated with sending messages to their 3PLs for the pick, pack, and delivery of goods was extremely costly and time consuming for the client. 

Our solution automated multiple types of message exchanges, including to the 3PL, via an integrated feed into the client’s systems. All of this information was now able to travel between our client’s systems and their connections frictionlessly. This meant processing time was drastically reduced, with just a few hours a week required to monitor all of the new automated processes. Ultimately our solution created greater business efficiency and saved the client significant time and money. 

Take a look at our pre-packaged EDI bundles that have been carefully selected to cater to different business needs. We can digitise your entire supply network as well as integrate into your business systems, for complete and immediate data visibility whenever you need. 

Our eDI Freedom solution is especially suited to businesses who need to digitise and automate the information they share with their 3PLs. This is a build-your-own solution where you can select the exact messages, connections, and integrations you need to succeed. For an off-the-shelf approach, our EDI Connect and EDI Connect+ bundles also offer direct integration with your systems and are catered towards more complex supply chains.