Osa conducted a poll on LinkedIn about how 3PLs communicate with partners’ technology applications and systems. The results came in with an overwhelming majority using third-party software, instead of manual processes (such as Excel or Google Sheets) or legacy systems (potentially outdated software or systems built in-house). With the boom in e-commerce, the need for state-of-the-art technology to process and keep track of orders and inventory is more paramount than ever. It’s no wonder that more and more 3PLs are switching out antiquated ways of communicating and managing their warehouses for innovative technology that seamlessly connects to all parts of the supply chain.
EDI and API Solutions
For the last several decades, 3PLs have traditionally used EDI, or Electronic Data Interchange, solutions. EDIs allow for consistent connection and secure exchange of information among the supply chain, providing a transparent way to consolidate and analyze data. Though EDIs are industry standard and therefore widely used by many retailer chains, the technology’s age slows down the spread of information. Moreover, smaller companies that still use EDI technology may run into problems with bigger companies that are more advanced in their software. Since supply chain partners, especially shippers, expect real-time visibility, more and more companies are switching to state-of-the-art software to keep up with demand.
This is where API, or Application Programming Interface, solutions come in. An API, a newer type of technology, is an individualized way for a logistics application to send and receive data without the need for human participation, therefore removing the possibility of human error that occurs with manual processes. APIs are specifically designed to enable differing applications to exchange logistics information so that each application can utilize that data to its best advantage. APIs, unlike EDIs, operate at sub-second speeds, making them the latest frontier in logistics communication. However, the relative novelty and the distinct coding required of APIs mean that 3PLs and other partner applicants might incur additional costs when switching to APIs.
Another way 3PLs communicate with their partner’s technology applications is via TMS, or Transportation Management Systems, which allows 3PLs to digitally control every aspect of the supply chain (storage, transportation, and fulfillment) and give suppliers the transparency required to streamline operations, therefore enhancing customer satisfaction.
A TMS provides 3PLs and partner applications with information like available inventory, tracking of shipments and containers, shipment status, and freight capacity, all of which logistics providers can utilize to optimize the transportation of products. An efficient TMS will procure data to create a more seamless supply chain journey, such as optimizing routes and equipping 3PL customers with real-time tracking information of their products. Essentially, a TMS connects shippers with carriers, guaranteeing that both parties' needs are met and ensuring that the most optimized processes are directing the transportation of goods.
The next frontier for 3PL communication via technology is IoT, or the Internet of Things which describes devices, systems, or software that connect and share data over the internet. When 3PLs utilize IoT technologies, they are able to leverage Artificial Intelligence to view the real-time location and current state of goods and are able to solve issues, such as damage or spoilage, as soon as they arise.
IoT can also enable blockchain technology, a significant innovation in 3PL software solutions. Once information is stored on the blockchain, it cannot be deleted or changed; this kind of interface enables an ongoing ledger of information all across the supply chain. This accountability ensures better supply chain finance management, and inventory management (forecasting for future demand, allocation by expiration date, real-time updates of SKU count, and more). Additionally, blockchain allows a customer to see the entire journey of their product, which leads to retention. This traceability is key to improving customer relationships. When a blockchain framework is adopted by all service providers, there is a smoother handover from the freight provider to the warehouse, and from the warehouse to the freight provider. Providers can track when the product was received and shipped.
The Osa Unified Commerce Platform
Osa offers supply chain technology that streamlines communication among supply partners. The Unified Commerce Platform connects everything to a single hub, including integrations, data order management, warehouse management, and transportation management, to seamlessly link your business to your partner’s applications such as e-commerce platforms, data formats, parcel carriers, and last-mile providers.
The Integration Manager Hub allows 3PL customers to manage their supply chain and e-commerce transactions from order to delivery, while also offering 100+ preset integrations. The Data Order Management Hub provides 3PLs with AI-powered aggregated data, enabling 3PLs to make optimal decisions based on network activity. The Warehouse Management System Hub lets 3PLs track every item from the cloud, automate orders with shopping carts and API/EDI integrations, and improve inventory accuracy and forecasting, all while reducing shipping time and costs. Finally, the Fulfillment Hub allows 3PLs to transform and expand distribution.
As noted, blockchain’s ability to provide decentralized storage and an immutable distributed ledger has opened up a wide range of opportunities, especially in the e-commerce and retail supply chain ecosystems. Blockchain allows for a single unified view of product attributes, inventory movements, and real-time allocation of resources. The Osa Unified Commerce Platform is built on blockchain; it functions as an asset management that works as one operating system, allowing 3PLs to align their entire supply chain by creating a decentralized system.
There could be occasions where suppliers fail to deliver goods intact or on time, leading to potential time-consuming disputes and punitive legal recourse measures. Utilizing the Unified Commerce Platform avoids such scenarios because it allows parties to negotiate smart contracts with suppliers that clearly define terms, conditions, and the mode of functioning, while further mandating intelligent data collection and control via sensors of all goods. Moreover, The Unified Commerce Platform built on blockchain offers a new solution to financial compliance regarding digital payments. Seamless, public-private permissions display sensitive information only to authorized parties while storing all data on the ledger. Owners set unimpeachable rules that all participants must follow, ensuring total compliance and validity of transactions. This simplifies any financial transaction that may occur between a 3PL and its partners.
As any 3PL executive knows, a well-run organization relies on seamless communication among partner applications. Knowing the benefits of the latest 3PL technology and how to correctly utilize them can be a lifesaver for any 3PL who wants to boost their operations and ensure a good flow of data, in addition to continually satisfying customers.
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