When you search “3PL software” on a search engine of your choice, the definition you get does not necessarily define it in its simplest form. Do not fear! 3PL software is two parts of one story: 3PL and software. Here, we will break them down and clear any and all confusion that might surface.
What is 3PL?
The answer to that question is multi-tiered. Businesses that provide a physical product obviously need to get to a specified location, whether that be the people directly or to a store that stocks them on their shelves. Businesses have to worry about ordering, warehousing, and transportation, and that is where 3PL comes in.
3PL is a fancy acronym for “Third Party Logistics.” Do not worry, it will be explained. Let us say you are a business that wants to sell a product. You store the product in your own warehouse and when customers buy your product, they buy it straight from you and it is sent directly to them. That is not third party logistics. Now, let us say you are the same business but rather than sell your product straight from your company’s warehouse, a middle-man is established – a broker. These brokers handle the invoices you get, they handle warehouse management, inventory management, labor management, and even freight management. Now that is third party logistics in action, most likely using 3PL software. So, essentially, you are outsourcing your business.
3PL software is a middle-man’s bread and butter. Pen and paper management is not like it used to be at the forefront of business management, but rather, took a backseat in lieu of computer software. That is not to say pen and paper does not have a place, quite the contrary. In fact, pen and paper is perfect as a source of backup since computers can be unplugged and destroyed; all data is lost unless there is a server that can retain the information somewhere else, even if your business lights go out.
This is because, unlike the human hand, computers never get tired; never need food; never need vacations or personal time; and make tedious office work much more bearable and faster. They can get computer viruses though, but again, pen and paper can be the backup to your backup.
And since outsourcing means many hands will be working at once, 3PL software provides the quick and precise decisions needed. These are goods that are traveling miles to locations you might never see by drivers you probably will not meet. Outsourcing your business with third party logistics can make running your business a whole lot easier.