How to simplify your 3PL Integration — Amosoft
Introduction to Logistics Integration
Integrated logistics, in some respects, seems identical to logistics in terms of its understanding and defining aspect with some fundamental difference i.e., the integration of each step, both with the planning as well as the control phase. In other words, Integrated logistics, along-with its dealing with everything related to traditional logistics patterns, also connects with various departments like that of production, marketing, finance, supply chain and all other departments of an organization. Integrated logistics is therefore more oriented or rather say inclined towards optimising production costs and times and improving quality.
Introduction to 3PL Integration
Basically, third-party logistics (3PL) offer services to organization to support specific aspects of shipping operations. It is an important link in the supply chain management that brands use to outsource their distribution as well as fulfilment services. Today, for most of the manufacturers, 3PL integrations are a tangled web of EDI connections.
Transportation EDI is a complex thing. Setting up your 3PL integration can be just as time-consuming and costly for most businesses, but the catch is that it does not have to be that costly and time consuming as much as it is projected to be. If your business unit works with several 3PLs, which typically means that the custom integration environments are needed to be built and maintained. With legacy EDI systems in place, you are creating peer-to-peer integrations for all your transaction types and for each 3PL connected. The only trick to simplify the tangled web is to set up all your transactions as efficiently as possible. Alike traditional way, there is no need to wait for weeks on end to enable your transactions with your EDI service provider. Working with a 3PL EDI Integration, typically involves seven core and important EDI transactions types with their relevant document types. Below depicted in the image is a step-by-step breakdown, to help you understand the process flow of these transactions in detail.
What is the process that takes place within a typical 3PL Integration?
Let us understand the complete process that explains a typical 3PL integration. Suppose you are a manufacturer and taking orders, that too online, from the customers. Your web portal will pass orders into the ERP, or some sort of system of records, which will then communicate via EDI with your 3PL provider’s system. This will allow to send the order to the customer.
· The transaction commences with customer’s purchase order i.e., 850.
· The company then sends a 940 (warehouse shipping order) to its 3PL. It asks for the order to be fulfilled successfully.
· Once company’s 3PL fulfils the received order, it sends 856 (advanced shipping notice) to the customer directly.
· 3PL communicates back to the company with 945 i.e., warehouse shipment confirmation signifying that the shipment has left the warehouse and is in transit.
· Once 945 is received, the company can send the invoice to the customer with an 810 (Invoice) based on the confirmation that the product has already been shipped, is in transit.
The question remains as to how do the 943 (warehouse stock transfer shipment advice) & 944 (warehouse stock transfer receipt advice) transactions fit into a 3PL integration?
· To meet customer demands, you need to ensure that your 3PL is stocked with the product that the customer has ordered. In such case, you must order directly from your supplier and instruct them to send product to your 3PL. This is done by sending them an 850.
· Till then, you send a 943 to your 3PL to let them know about the incoming of goods into their warehouse along0-with the information as to when is the product going to be delivered to the customer.
· Once the shipment is ready from the supplier end, they 856 to the 3PL to confirm the contents of the shipment prepared. In this case, the supplier can then send you an 810 (invoice) for the cross verification and to allow you to keep a track record.
· Once your 3PL receives the product from your supplier, it will thereafter send you a 944 to notify that they received the product from the shipment. 944 majorly serves as a receipt of your order.
How Amosoft simplifies 3PL Integration?
As mentioned above, the seven transaction types are critical to any 3PL integration. Companies working with legacy EDI systems already at placed, have built custom integration environments that are maintained by either an in-house team of EDI experts or outsourced to a managed service provider as a whole. This web of integrations is complicated and expensive to maintain and challenging to scale as you continue to grow your business to a greater extent.
By integrating with solution from Amosoft, you do not have to build point-to-point integrations. Amosoft will remain the central point of integration for your ERP and your 3PL. Connect once to our platform and tap into an existing network of 3PLs, consolidating all the EDI vendors into one specific hub.
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