When a logistics company is on the hunt for top-class logistics management tools, knowing where to start can be a little daunting. There’s a huge range of options available right now. While it’s great for businesses to have a lot of scope and choice, this also means that finding viable software solutions can get tricky.
There are three main types of logistics management software: Warehouse Management Systems, Enterprise Resource Planning (ERP) systems and Integrated SCM suites. It is often difficult for companies, particularly third-party logistics companies, to make the right selection because they require specialized capabilities that may not be provided by all three types of logistics management software. Let’s take a look at how to use and choose the next logistics management software platform.
Standalone Logistics versus an Integrated Suite
The variety of logistics management solutions and the unique needs of businesses make decisions more difficult. However, this also increases the importance of choosing the right logistics management solution. And that decision starts with deciding whether standalone logistics management, ERP or Integrated SCM offer you the most value. Ultimately, warehouse management tools are built to increase the productivity of warehouse operations. Therefore, the long-term goal is to save money by speeding up work routines and getting products out faster. The major difference between standalone logistics and integrated SCM is that the former doesn’t accommodate other supply chain operations.
It is true that some standalone software includes access to transportation management tools. However, these capabilities are limited as you need a full SCM setup to effectively oversee supply chain management. It covers everything from supply chain planning and execution to demand planning and gives you the ability to streamline transportation routines.
Standalone solutions are less dynamic, but they still cover the control of inventory and the refining of warehouse functions like picking, packing, slotting and shipping. ERP systems, on the other hand, increase transparency by making it easier to track and monitor operational processes. However, take note that not all ERP systems include core logistics tools.
Key Features and Value-Added Services
To decide which solution is best for your business, first you’ve got to know what they can do. We recommend taking a close look at some of the specialized functionalities which 3PL companies can use to boost their bottom line and improve their supply chain management. Businesses that provide customers with value-added services (such as light assembly or kitting) should look for a system that helps them record and cost these processes. In this case, standalone logistics is a valuable choice, but you will also find such capabilities in high-level SCM solutions. For specialist labelling, it may be necessary to invest in a comprehensive ERP suite.
The diagram below shows the activities for providing value added services
The majority of warehouses handle more than one customer. Therefore, they need logistics and supply chain software which can accommodate inventory and purchase order processes for a (potentially) large number of clients. If you’re looking at cloud-based tools, be careful when shopping. Ensure that the system has the right chain management architecture and not just a multi-client deployment model.
Costing and Invoicing Control
Whether you decide to work with standalone logistics management or integrated SCM tools, accurate inventory tracking is vital. The software should help you formulate, process and apply service contract policies quickly and easily so customers can be invoiced on time, every time. To offer maximum value, your 3PL invoicing tools must provide a clear window on receiving, put-away, storage and shipping tasks.
It is common for 3PL companies to work closely with mainstream parcel carriers. Services like UPS and FedEx are integral to warehouse routines, and the smoother these interactions go, the more productive the business can be. Some SCM systems offer the chance to automatically send and receive shipping data. This saves time and reduces the number of operational errors, as well as ensuring on-time delivery.
Client Web Portals
Client and customer web portals can be incredibly valuable because they give 3PL companies full inventory control even when off-site. Inventory figures, product histories and shipment records are all accessible remotely with the right kind of logistics software.
Supplier-Managed Inventory (SMI)
Businesses that offer supplier-managed inventory should invest in software that automatically receives, records and processes replenishment requests. It speeds up the progress of deliveries by a substantial amount because clients don’t have to go through the standardized order system every single time they need a repeat shipment. You will find this capability in many supply chain management SCM solutions.
The Bottom Line
After examining their core features, we’ve come up with some recommendations for what we think logistics management vs. integrated SCM amounts to. While comprehensive SCM systems are no doubt useful, they are not necessarily essential. That is unless you’re keen to optimize supply chain operations beyond basic warehousing. Otherwise, a standalone logistics system should be enough to handle third party logistics, costing and invoicing, multiple client architectures and automated shipping data. It’s also a great choice for businesses that want to be transparent with their customers as a way to build stronger customer service.
For instance, best of breed software makes it easier for customers to view and browse warehouse inventory. Most importantly, it gives businesses the chance to seize a competitive advantage by eliminating inefficiencies in their supply chain. Daily operation becomes faster, smoother and more affordable.
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