October 15 2019
Business has been booming in recent years for 3PL (third-party logistic) companies. While this is great for sales, many 3PL providers are having a hard time keeping up with demand. Automation technology provides relief to those sinking under the pressure to grow. Below are some of the top challenges facing third-party logistics providers, and how automation can help.
1. Workforce Issues
One of the most significant 3PL challenges is staffing. Attracting and maintaining top talent is one of the biggest problems plaguing business leaders today. Automated storage and retrieval systems (AS/RS) reduce the number of employees in the typical high-turnover jobs. Reliability and productivity are no longer an issue with a machine that can run 24 hours a day, 7 days a week. Benefits of an AS/RS include lower risk of human error, increased accuracy, higher output quantity, and much more.
2. Scalability
As sales increase, storage capacity is being strained past its capabilities. An AS/RS has the unique ability to scale with a company as it grows; there is no need to continuously change software or equipment as your business expands. Westfalia is prepared with a flexible system that can seamlessly adjust according to the needs of your company. Automated warehouses typically use 50% less overall building footprint for goods when compared to a traditional warehouse. For companies who have run out of storage space, this means that instead of purchasing additional warehouse space, you can optimize your current building to increase inventory capacity and even expand up instead of out.
3. Keeping Track of Shipments
The Amazon effect has hit many businesses in the warehousing and shipping industry. E-commerce sales continue to rise every year as do consumer expectations for faster shipping times. It can be especially difficult for a 3PL to keep track of orders due to their large variety of inventory from numerous vendors. A sophisticated warehouse execution system (WES) ensures that all inventory is accounted for and reported on. Savanna.NET® WES simplifies supply chain transactions by showing a visual representation of all operations in the warehouse. In real-time, you can watch your products move throughout the entire warehouse or zoom in on one specific item.
4. Seasonality
3PL companies serving clients with seasonal products absorb the struggles with seasonality. Huge sales peaks at certain times of the year can cause inefficiencies in the warehouse. Manufacturers and distributors are often forced to employ seasonal workers to keep up with the rapid increase in demand. An AS/RS can dissolve the need for this type of labor by adapting to the ebbs and flows in the business cycle. A flexible, high density storage system allows users to utilize additional storage positions to accommodate SKU growth during the busy season without having to make any major software or process adjustments.
Warehouse automation has become a necessity for many companies in the 3PL industry. It can give your business the competitive advantage it needs to not only fulfill current demand but grow to new levels. Contact us to receive a complimentary data analysis from our Solutions Team!