All In One Guide to 3PL Inventory Management

Third-party logistics or 3PLs are companies proficient in handling a business’s supply chain. This includes everything from order fulfillment, shipping, maintenance of products, and more. One key aspect of it all is inventory management. With the shift towards emerging market trends, companies have different outlooks on handling inventory. Businesses alone need to be better equipped to overcome these situations effectively but can explore a whole new world through successful collaboration with a 3PL service provider. 3PLs have much to offer the business, from reduced operational costs to increased efficiency and scalability.

Overview of 3PL Inventory Management 

3PL companies play an active role in handling your business inventory management by leveraging their resources. As a result, your business faces fewer disparities in the supply and demand of the products. Since 3PL companies are well-versed in product demand, they utilize their experiences and identify ways to boost your business’ growth through an efficient inventory management system. 

By availing the services of a 3PL company, you can witness real-time inventory management and automated order fulfillment. It simply means that the burden of inventory and order delivery management is lifted off your shoulders, and you can have ample time to focus on other areas to ramp up your business’s success. Moreover, the additional costs of manually hiring a designated workforce for handling management can be saved. 

Emerging Trends in 3PL Inventory Management 

As the world evolves and new trends emerge in every market daily, further modifications bring more efficacy to 3PL functioning. With AI taking over the globe like a storm, technological advancements drastically affect the business market. Therefore, wisdom lies in finding ways to keep up with the changes. Economic trends are inevitable, but depending on 3PL companies to tackle supply chain uncertainties is the right approach.

As 3PL companies face current trends like increased consumerism and the rise of e-commerce, moving towards proficient Warehouse Management systems is vital. A systemic WMS can change the whole supply chain management trajectory in 3PL. Through a well-organized WMS, issues faced by a 3PL, like the rising inventory levels and lack of demand, can be handled more. Therefore, it is crucial to equip and learn 

Key Features of 3PL Warehouse Management Systems 

As discussed earlier, a WMS can influence the proper functionality of 3PL and fill the missing gaps in supply chain management. Understanding the functionalities and features can help navigate how it works to aid supply chain management. 

  • At a basic level, WMS plays a pivotal role in displaying the status of the current inventory and provides real-time tracking.
  • Order management and fulfillment are the most significant aspects in which WMS can help immensely. 
  • Timely delivery of products, with management of return and reverse orders, is another critical feature of WMS.
  • Last but not least, data analytics tools in WMS aid in identifying the aspects that require more effort. 

Benefits of Implementing 3PL Inventory Management Software 

Having talked about the features of WMS, highlighting the critical benefits of using one can help comprehend its significance better. Whether it is management software in 3PL or some other firm, software and technology can streamline the entire process effectively without hassle.

Using a 3PL inventory management software for your business can assist you in boosting your journey in the following ways:

  • Opting for Inventory management software can cause an evident reduction in the cost being spent through a minimal labor workforce.
  • Using software results in real-time inventory management visibility and increased order fulfillment efficiency.
  • Customer satisfaction can improve significantly due to timely delivery and better service
  • Lastly, software that is programmed in nature can help customize workflows and manage orders optimally. 

Challenges in Modern 3PL Inventory Management 

Although 3PL companies have advanced problem-solving techniques and pave their way through each situation, some issues are inevitable. When it comes to inventory management, warehouses are the backbone. One of the most common issues is warehouse space shortage, leading to problems in the storage of products. As the market fluctuates in every season, consumer spending trends also vary. It can have a massive influence on inventory, directly proportional to planning disruption.

Simply put, scalability is a considerable problem. 3PL providers can need help navigating. Maintenance of accuracy and real-time inventory management with several clients is another significant issue, especially when many businesses are on board. Moreover, with the current spike in inflation, increased costs can pose a massive hurdle in maintaining the quality of services while sticking to a budget. 

Integrating eCommerce with 3PL Operations 

With the world functioning primarily online, integrating substantial operations within eCommerce can be the turning point for businesses. The cornerstone of a successful business lies in retaining customers and providing a top-notch service. By availing of 3PL services, companies can overcome the difficulty of maintaining customer satisfaction through 3PL’s automated order management. 

It can rectify a huge array of problems within the eCommerce industry. The 3PL provider company also manages inventory management and other vital functions. In this manner, businesses can avoid overhead costs and tiring labor work and move towards finding ways to scale up their operations. Since 3PL providers have strong resources, other aspects of business can also benefit from it. 

Cost Reduction Strategies Through 3PL Services 

Moving forward, 3PL companies, as mentioned earlier, can help you avoid hefty overhead costs in different ways. One significant aspect to acknowledge is that 3PLs have shared warehouses, meaning businesses don’t have to invest in a separate storage space. Moreover, through years of experience, 3PLs can manage inventory and predict future market fluctuations.

In turn, labor costs and the risk of disruption within the supply chain can be minimized. Through automated logistics processes, 3PL can boost your scalability as a business. Their connections and resources are the prime reason most cost-reduction strategies suffice. In sum, operational efficiency is increased with additional costs being saved and can be utilized for other business areas.

Selecting the Right 3PL Partner for Your Business

Now, after having a fundamental insight into the significance of 3PLs for the growth and scalability of business, choosing the right one is the next most important step. It is crucial to navigate your expectations from a 3PL provider and then communicate with the potential ones to find out if both of you are on the same page. Some tips that might aid in selecting a 3PL partner are as follows.

  • Understand the core objectives and needs of your business. Find out your weak areas that require more attention. Make a list and write down everything like management, storage, shipping, etc.
  • Go through the services offered by different 3PL providers. Most 3PL providers have other specialties; therefore, find the ways whose services align best with your business needs. 
  • Look out for the experience of 3PL provider and their scalability potential. Then, pay attention to their stability level as well. It is essential to know that your provider can tackle adversity easily.
  • Evaluate the business’ budget and financial planning. Then, look out for 3PLs that fall in your budget. Discuss all the services being provided and then make an informed decision. 

Leveraging Technology in 3PL for Competitive Advantage 

The surge in technology is a reality no one can ignore now. With technology integration, business can go a long way. 3PLs can now transform supply chain management through real-time inventory tracking and automated systems.  Therefore, the services of 3PLs don’t come only with management perks but can give you an edge over other businesses in the market. With the world moving so fast, technology is your true savior. 

Through 3PLs, you can optimize your business and find ways to bridge the distance between your reality and the business of your dreams. The Warehouse Management Software also has special analytic tools to evaluate the progress of your business and help identify weak aspects. Therefore, you can find ways to effectively plan towards improving these areas. Moreover, with the release of advanced AI, a lot can be done to level up your business and take it to the next level. 


To wrap it up, opting for a 3PL company can be the single choice in attaining the growth you desire for your business today. Inventory management in the supply chain might seem easy, but the reality says something different. From reduced operational costs to boosting your business’ growth, 3PL is the way to go.

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