Four Keys to Successful Technology Adoption in the 3PL Industry
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The challenges of maintaining a strong value proposition as a 3PL service provider are quite formidable. Shippers and retailers trying to survive in today’s challenging business environment look for better service, lower rates, and more efficient logistics. The logistics industry therefore continues to find ways to make their companies supply chain stand out from the crowd.
No doubt technology that enables the ‘paperless warehouse’ is the way forward. 3PL warehouses must embrace technology to move from a familiar but inefficient manual environment, in order to harness the potential gains from technology. The fact that 70% of 3PL companies are still limited to using manual paper-based methods and basic tools like Excel to operate, underlines how much of a challenge technology adoption remains.
Adopting new technology needs a specific set of skills and strategic organization to pull off. This post examines four areas that hold the key to success for 3PL companies about to adopt new technology.
3PL companies must be prepared to recognize when any technology reaches its limits of efficiency and a smart upgrade to a scalable solution is needed. Integrated software for picking, packing, and shipping from a central warehouse management platform is the change that helps 3PLs increase their fulfillment speed. These types of implementations can bring about exponential efficiency gains to the warehouse operations, but may require a change in how the warehouse operates.
Managing the natural resistance to change from your workforce and helping users accept new technology must be a planned process. Warehouse management system (WMS) software is designed with best practices in mind, so to bring about meaningful change, be prepared to embrace changing workflows. Bring together the expertise and experience to design important workflows that are simple and easy for warehouse staff to embrace.
Remember that the actual objective in a technology implementation is met only when the warehouse achieves increased productivity or makes the transition to a paperless environment.
Invest in Training
Remember that technology is only as good as the people and processes it enables. You can buy the greatest software solutions in the world, but if your employees don’t use it, you won’t get your money’s worth. It’s important that you carefully plan and build in enough time in your implementation plan for training. It is critically important to ensure each warehouse worker gets the necessary training so they know what their role is in the workflow and how they can do their role the easiest and most efficient way.
It’s also important to consider that many warehouse workers may not be fully versed in using even the simple devices such as tablets, laptops, mobile scanning devices used in a technology-enabled warehouse environment. Including the “why” of the implementation when communicating to different audiences is a key component of change management strategy. Communicating frequently and openly about job impacts and challenges will ensure that staff are ready for the change.
Collaborate with your entire network to add value
3PLs who adopt technology successfully also learn how to to manage and engage with all stakeholders – clients, trading partners, suppliers and marketplaces from across the whole supply chain. Collaboration is based on sharing information at the right time with the right partner, establishing and implementing smart contracts, and stored interactions and enhanced communications for improved efficiency.
3PL leaders can leverage their technology platform to collaborate with partners in their supply chain across a range of warehouse operations – execute orders and shipments, share data regarding order status, real-time shipment visibility, and more. These add value to all the players in the 3PL supply chain thus making your warehouse logistics stand out from the crowd.
Ensure Technology is Supported
The most cited reason for the failure of 3PLs who embark on a technology implementation project is the lack of understanding of the impact of digital technologies. They often fail to consider that the investment in technology does not stop at simply selecting and implementing a warehouse management system. The entire warehouse operation must be enabled by technology at every step, in an integrated and planned manner with no room for disruption from systems failing or being unavailable at any point.
For example, a WMS may also include barcode scanners, shopping cart integrations, connections to data sources and marketplaces, properly managed tablets and other devices. Each component of your solution will need a plan for support and resolution in case of failures and disruptions. A cloud-based WMS has the advantage of guaranteed uptime commitment from the vendor, but you may also need to plan for IT resources to ensure consistent availability and integration of your warehouse management technology.
We are living through a period of enormous change that will require a successful 3PL warehouse to continually evolve and change along with it. According to a 2019 survey, published by Inbound Logistics, challenges that weigh most heavily on shippers’ minds include business process improvement (32%) and improving customer service (31%). Choosing the right WMS is an important decision in building a successful, modern 3PL that will help your warehouse deliver excellence to your clients on both these factors.
But the above four key areas are equally important to get right if you want to make the decision to adopt technology the right decision that delivers the expected ROI. If you are ready to take the plunge to adopt technology in your 3PL, make you follow these important tips to best ensure this investment is successful.
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