Smart 3PL Warehousing: Technology, Techniques and Best Practices

Today’s 3PL warehouses are equipped with cutting-edge tools such as robotics, logistics automation, IoT technology, and real-time inventory management software. This evolution plays a major role in smart 3PL warehousing.

Smart warehousing brings substantial value by integrating technology and automation, which enhances efficiency and reduces costs. By automating various internal processes, tracking operations in real-time, and analyzing performance, smart warehousing enables more informed supply chain decisions.

If you’re an online retailer seeking to enhance your 3PL warehousing operations, this article will delve into the concept of smart warehousing, its benefits, and best practices in the industry

What is Smart 3PL Warehousing?

Smart 3PL warehousing refers to a warehouse or fulfillment center that leverages advanced supply chain technology and automation to streamline, accelerate, and enhance logistics operations.

By incorporating these technologies and automation, online retailers can expand their businesses, meet customer expectations, and optimize logistics costs.

By implementing smart 3PL warehousing, Macmillan’s primary objectives of smart warehousing is to improve speed, accuracy, visibility, and transparency within the warehouse to provide you with real-time responsiveness.

How Does Smart 3PL Warehousing Benefit Retailers?

Smart warehousing revolutionizes logistics operations, allowing online retailers to expand their businesses while maintaining transparency and control over their warehouses.

Here are some key benefits of investing in smart 3PL warehousing to grow your online presence:

Improved Operational Efficiency: Automation and advanced technology streamline processes, reducing manual labor and minimizing errors.

Enhanced Inventory Management: Real-time tracking and data analytics provide accurate inventory insights, preventing stockouts and overstock situations.

Faster Order Fulfillment: Automated systems speed up order processing, ensuring quicker delivery times and higher customer satisfaction.

Cost Reduction: Optimized logistics operations lead to lower operational costs and increased profitability.

Scalability: Smart warehousing solutions are adaptable, allowing businesses to scale operations seamlessly as they grow.

Real-Time Data Reports: automatically collect and aggregate data from across your logistics network. This provides valuable insights into performance and real-time inventory levels.

7 Smart Warehousing Techniques and Technologies to Implement

Rapidly expanding online brands managing their own warehouses must be willing to experiment with modern technologies like AI, robotics, and automated guided vehicles to get smart 3PL warehousing rights.

In this guide, we delve into essential smart warehousing tips, tricks, and technologies that are shaping the future of the logistics industry.

1. Warehouse Robotics

Warehouse robotics are often the first innovation that comes to mind in logistics. They enhance order accuracy, boost productivity, and reduce labor costs, allowing your team to focus on optimizing operations instead of being bogged down by tedious tasks.

Warehouse Robotics in Action:

• Automates Picking: Automated picking tools, such as mobile robots, collaborate with pickers to select orders off the shelves two to three times faster, reducing inaccuracies.
• Improves Inventory Visibility: Drones, though reminiscent of sci-fi, add significant value by autonomously conducting inventory audits, cycle counts, item searches, and more, enhancing inventory visibility.

2. Artificial Intelligence

Artificial intelligence (AI) leverages supply chain data to predict potential crises and enable intelligent decision-making, transforming warehouse operations.

Artificial Intelligence in Action:

• Optimizes Storage: AI-powered systems alert you when storage space is running low, allowing you to plan for increased storage or reduced inventory volumes.
• Averts Risks: By analyzing historical sales data, real-time market fluctuations, and current inventory levels, AI helps predict potential issues like overstocking, understocking, and shipping delays, enabling you to take preventive measures.

3. Warehouse Management Systems (WMS)

A distributed inventory model, which involves storing inventory in multiple locations to reduce shipping costs and speed up transit times, requires a robust warehouse management system.

A WMS centralizes logistics operations, enabling seamless tracking of inventory and ensuring that goods are stored, picked, packed, and shipped efficiently. MacMillan uses WMS integration with your systems to manage zero error rates and tracking.

4. Setting Reorder Points

Balancing inventory levels is crucial, too much inventory increases carrying costs, while too little can lead to stockouts. To effectively manage restocking amidst fluctuating demand, supplier deliveries, and logistics issues, smart warehousing techniques can be essential.

Utilizing an inventory tracking system that allows for automatic reorder point notifications can optimize inventory levels. By analyzing first-mile delivery timelines and inventory turnover rates, you can make informed decisions on when to restock using the reorder point formula.

For example, working with a 3PL provider like MacMillan, which has a built-in inventory management system, provides insights into delivery timelines and turnover rates, helping you set and adjust reorder points.

Reorder Point Automation in Action:

• Automatic Alerts: Receive notifications when inventory levels for each SKU are low or hit their threshold, prompting timely reordering from suppliers.
• Inventory Forecasting: Adjust reorder points based on fluctuating demand, manufacturer lead times, and inventory trends, ensuring timely notifications and optimal stock levels.

5. Automated Guided Vehicles (AGVs)

Automated guided vehicles (AGVs), including forklift AGVs, towing AGVs, and unit load handlers, enhance internal processes like storing, lifting, and stocktaking. These autonomous vehicles follow guide paths or sensors, optimizing warehousing operations.

AGVs in Action:

• Automated Inventory Handling: AGVs automate receiving, storage, and shipping processes, allowing a hands-off approach to inventory management.
• Efficient Pallet Operations: AGVs streamline the loading and unloading of semi-trailers and the picking and stacking of pallets, reducing handling time and improving accuracy.

6. Inventory Management System

An inventory management system centralizes control over inventory variations across multiple storage centers, offering real-time tracking of SKU quantities, damage return rates, and performance metrics.

Inventory Management in Action:

• Enhanced Visibility: Gain a comprehensive view of inventory levels across all warehouses and channels, centralizing operations for better management.
• Improved Efficiency: Efficiently allocate inventory across the distribution network, assign optimized picking routes, and enhance picking and packing processes.

Many online retailers’ partner with fulfillment providers like MacMillan to leverage real-time inventory tracking and automation without investing in infrastructure.

7. Internet of Things (IoT)

The Internet of Things (IoT) connects various devices and objects within a network, allowing seamless communication and data sharing.

Synchronizing smart warehouse technologies (WMS, sensors, conveyors, RFID tags, AGVs) and connecting them to the internet enables deep visibility and prevents data silos.

IoT in Action:

• Item Location Tracking: A network of security devices constantly monitors product locations, preventing errors, theft, and misplacement.
• Predictive Analytics: Data collected from interconnected devices provides insights into the arrival times of goods, inventory levels, and maintenance needs, optimizing supply chain operations.

What are the best practices for smart 3pl warehousing?

Smart warehousing prevents empty shelves and costly bottlenecks, ensuring a smooth and efficient supply chain. Here are some best practices to help decision-makers fully leverage smart warehouse technology and automation solutions.

Key Take Aways

Today’s 3PL warehouses are equipped with advanced tools such as robotics, logistics automation, IoT technology, and real-time inventory management software, which are central to smart warehousing.  

If you are an online retailer aiming to improve your 3PL warehousing operations, understanding and implementing smart warehousing practices is essential. This involves leveraging advanced technologies like AI, robotics, and automated guided vehicles, as well as adopting robust inventory management systems and IoT connectivity.