WhitePaper: 3PLWarehouseGuide: 7EssentialsforSupporting eCommerceFulfillment

As a 3PL warehouse, you cannot afford to ignore the significant growth opportunities doing eCommerce fulfillment. Whether you already handle fulfillment or are looking to expand your warehousing services, this 3PL Warehouse Guide covers the seven essential functions needed to support eCommerce fulfillment.

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Introduction
Are your ready (or even participating) in the growth of online commerce? Some of the biggest shopping days of the year fall around the holidays and having the expertise and systems to support these upturns are critical for any 3PL warehouse handling consumer shipments. One of these big online shopping days is even coined with its own name, Cyber Monday, which is the Monday after Thanksgiving while the biggest day for ecommerce sales falls in early to mid-December. This is the time when consumers purchase online with the promise of guaranteed delivery by Christmas. Forrester Research, a leading research firms tracking online sales, reported that in the United States 2010 online sales are forecasted to reach $172.9 billion, up 11% from 2009. In 2009, Forrester reported over 154 million people in the U.S. bought something online, or 67 percent of the online population. The most popular product categories being sold online include computers, apparel, and consumer electronics representing more than 44 percent of online sales ($67.6 billion) in 2009. And the growth of online sales is predicted to continue with 9 to 11% growth over the next 5 years. With such strong growth, the opportunity to grow your 3PL warehousing business by providing eCommerce fulfillment services is unquestionable. Handling eCommerce fulfillment takes a combination of operational knowledge and system capabilities -- this White Paper will detail seven essential system capabilities to eCommerce fulfillment.

Source: Forrester Research, 2010

the opportunity to grow

your 3PL warehousing business by providing eCommerce fulfillment services is unquestionable..
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The 7 Essentials for Supporting eCommerce Fulfillment

1. Inventory Visibility & Synchronization Accurate inventory levels reflected in your customers eCommerce shopping cart software is important for the highest level of customer satisfaction and for a streamlined order fulfillment process. A 3PL warehouse management system which has the ability to update your customer's shopping cart software with current inventory levels will significantly differentiate you from other 3PL competitors. Besides eCommerce inventory is commonly depleted for shipments from a variety of sources. There are many other ways shipments might be initiated in addition to shopping cart orders, those include: salesperson samples, retail store orders, and wholesale/distribution channel orders to name a few. Since these other order sources could quickly exhaust stock, it is important to have an automated and regularly scheduled inventory update from the WMS to shopping cart. Typically inventory levels are updated once a day or once per week depending on the popularity of the products. This ensures that items which are out of stock are not be displayed (or they will be listed as out of stock) to consumers visiting your customers' online store. By properly reflecting out of stock status, you can better manage backorder issues and customer expectations.

2. Real-time Communication of Order Details Between Shopping Cart Software and WMS The continued growth of online retail sales have been a boom for fulfillment houses year round. From mega-sites like Amazon.com and e-Bay to hosting companies that service one person operations, online retailers have streamlined the buying process by implementing virtual shopping carts with a convenient checkout button to pay for and complete a transaction. Shopping cart software saves the buyer and seller time and expense by automating the buying process. Your warehouse can also take advantage of this automation by tapping into these shopping carts for order processing and status updates. Shopping cart software and warehouses primarily communicate through three methods: 1. Email Alerts 2. Batch Processing by Manual Import/Export 3. Automated Integrations (APIs and Web Service Calls) between systems The first and most basic method is through e-mail alerts sent to the fulfillment house. This one-way notification is fine for drop shipments and partners who do not ship regularly but is not a guaranteed message delivery method. The second method is integration through batch processing which allows the fulfillment house to process multiple transactions by manually importing and exporting data files between systems. Batch processing requires user interaction to import and export flat files to move data between systems. This method is relatively inexpensive and is familiar to most experienced computer users. Flat file imports and exports can also be implemented very quickly. Unfortunately, batch processing creates delays in the information pipeline which is inefficient be definition.
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Batch processing may also require you to import and export a new file for each shopping cart. While you may not have to retype order data, you will have to manage the inbound and outbound file traffic for each of your customers. One downside to batch processes is that this user interaction can delay fulfillment and status updates. The third method provides a real-time way to integrate shopping carts with your warehouse management system that eliminates this user interaction: Application Programming Interfaces, better known as APIs or Web Services. APIs and Web Service Calls link your customers shopping carts with your warehouse management system in real time. The APIs create an automatic two-way link that sends order information to the WMS and updates the shopping cart with status and tracking information as orders are filled. The Web Service calls are seamless to your customer and the consumer because their systems are simultaneously updated with the shopping cart acting as the conduit. This reduces the lag time for sharing information and becomes an extension of your customers service and visibility. It is no secret that real time integration will not only improve your service and fulfillment Key Performance Indicators (KPIs) to your customers, but they will also increase your throughput and lower your overhead. Since the process is automated, there is no limit to the number of shopping carts you can connect with the WMS which can handle multiple customer shopping cart connections. This increases your exposure and allows you to accept orders from hundreds of different sites and shopping carts and route them to the correct customer inventory and warehouse. The warehouse management system will in turn update each shopping cart and customer as you process transactions without having to send individual e-mails or answer telephone calls from uninformed customers. Real-time access to order data through API connected shopping carts also has operational benefits for the warehouse. As orders are received, inventory can be allocated in real time. Having this information in a timely manner can give the warehouse a head start replenishing pick locations, recognizing fast moving items, triggering re-order processes and display accurate available inventory counts to customers trying to place orders for backordered product. Real-time shopping cart API connections not only save you time and administrative overhead but also help proactively track inventory levels and keep your customers informed. While batch processing is an inexpensive option, it does not necessarily provide enough automation to keep up with multiple shopping carts and increased order volume.

3. Handling Larger Order Volumes Operational inefficiencies can be magnified as order volumes increase. This is especially true when seasonal workers are brought in that may not be as familiar with the warehouse or inventory setup as your regular staff. A solid Standard Operating Procedure (SOP) for pulling orders is a great place to start, but enforcement can be difficult in times of high activity. Right when you need it most! As your order volumes increase, let your employees focus on accurate fulfillment while your WMS optimizes your workflow and enforces your picking rules. Limiting movement and repetition in the warehouse is key to improving productivity. Pick line locations and pick location priority settings can be used to direct your staff to the most logical items to pick based on shortest distance, least touches, package configuration or a number of other criteria. When set up correctly, your WMS can automatically allocate product from these optimized locations. Mobile scanning features can enforce the pick
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process to help maintain order accuracy. Another way to limit movement and touches in the warehouse is to utilize batch or wave picking methods. Wave picking works by reviewing a large batch of orders and plotting the best course through the warehouse to pick product from each location. This means that if all multiple orders require items from the same location, the operator will pick all items at the same time. Once all items have been picked, the operator will segregate the product into the correct orders during the packaging process. Batch picking eliminates redundant location picking and greatly reduces distance travelled in the warehouse. An operation that appears efficient at half volume could easily be overwhelmed as peak season hits. Pick location prioritization is one of the best solutions for reducing costs and processing more orders during a given period. Fewer location touches and less travel time equates to a more efficient and safer operation. Process more orders than ever and be confident that the holiday rush will put you in the black instead of having you seeing red.

4. Increased Pick Accuracy (Barcode Scanning) Picking accuracy is an essential component of ensuring that the product ordered is the product delivered. One way to ensure accuracy is to leverage barcode scanning technology at the time of pick and pack. A WMS system that has barcode scanning functionality will both direct a warehouse picker to the correct inventory location as well as verify the picked product. It is critical to have the capability to immediately verify that the correct SKU was selected at the time the product is picked. This enables the picker to quickly move to the next line item to be picked or stop and resolve the reason why the item does not match the item specified by the WMS system. Having this real-time verification based on the Item Number or UPC barcode provides immediate feedback to the picker. Barcode scanning is one of the best ways to increase your shipment accuracy resulting in happier customers and consumers. Barcode scanning also helps to reduce customer service costs.

5. Custom Branded Packing Slips One of the largest challenges in handling eCommerce fulfillment as a 3PL warehouse is supporting the customized requirements each of your customers would like the consumer to have when they open the carton. It is understandable that each customer wants to not only deliver the products the consumer ordered quickly and accurately, but they also want to give the customer a feeling of being special. One way to create this brand experiences is to place a customized packing slip in the carton. Placing a printed packing slip in the carton is easy to do -- the challenge is printing different looking packing slips for each of your customers. One customer wants their logo included, while another wants the 3PL's address as the return address instead of the companies' own address. Having a WMS system that can support these types of customizations, by customer, will enable you to grow your eCommerce fulfillment customer base. It is also common to have more than one custom packing slip per customer -- this adds another layer of complexity. So, having a system that can not only customize packing slips per customer but also have multiple different versions depending on the website where the order originates, will truly set you apart. One
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example is when fulfilling orders from Amazon. In Amazons case, the packing slip will look different than the orders generated by your customer's own online store. The largest benefit to you as a 3PL is that with each packing slip you customize, it becomes more difficult for a customer to switch to another fulfillment provider. Thus, custom branded packing slips help make your solution more relevant and valuable to your customers.

6. Integration with Shipping Systems A great way to make your eCommerce fulfillment more profitable is to integrate with small parcel carriers such as UPS WorldShip, FedEx Ship Manager and Endicia and eliminate retyping and associated costs. Order fulfillment is not complete until the packages are off your dock. With the peak season approaching, the demands on small parcel carriers and the United States Postal Service are in overdrive. This means drivers are less likely to wait while you create labels and generate manifests, and customers are less forgiving if their packages do not arrive on time. Time and accuracy are of the essence while pressure and workload are on the rise. You can avoid the stress and inefficiency of double entry by integrating your inventory and order systems with the small parcel carriers. Federal Express, UPS, and the Postal Service all have a variety of ways to connect and share data. The most common ways are through flat file direct integrations, Native API connections, and 3rd party shipping applications. The most common and least expensive way to integrate with the small parcel shippers is through flat file or direct database connections to the carriers stand alone shipping systems. This method involves exporting shipment and package data from your warehouse management system and mapping the fields into the carrier system. Once the map has been established, most systems provide a variety of processing methods including batch processing and keyed imports allowing you to complete all transactions at once or key through them one at a time. Besides the lowest cost, the key benefit to direct integration is the ability to take advantage of all of the features offered by the carriers

You can avoid the stress and inefficiency of double entry by integrating your inventory and order systems with the small parcel carriers.
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shipping software. This often includes additional reference fields, reprints, rating, custom labels and more. These applications are typically more full featured than native API connections and are provided free of charge by the carriers. Native API connections can be great time savers when processing numerous, standard orders. Native API connections between order and inventory systems and the small parcel carriers work by sending shipment and package data directly to the carriers and generating shipping labels and logs out of the warehouse management system. API connections eliminate importing and exporting data and update the carriers in real time. API connections also eliminate the need to move between multiple carrier shipping systems. The biggest downfall of Native API connections is their lack of flexibility. Each carrier has a unique set of rules and data points for communicating. This can stress a typical ordering system. In addition, you are limited to the options and configurations provided by your inventory management software which are typically not as robust as full carrier software. A third small parcel option that can minimize the system usage, but provide a great deal of flexibility is through the use of 3rd party shipping applications. These integrate directly with the small parcel carriers. In this setup, the warehouse management system exports a general set of data to a 3rd party shipping application that provides full featured integration to all of the small parcel carriers. This allows you to manage all of your shipments across multiple carriers from one application while providing the flexibility and options of using each carriers systems individually. While 3rd party applications blend ease of use and performance, they can add another layer of cost and complexity. 3rd party systems can be costly to purchase and maintain and may not be directly supported by all carriers or warehouse management systems. The added costs should be taken into consideration when evaluating your options. Regardless of the integration path you choose, the warehouse can realize significant increases in productivity and throughput. All of these methods eliminate double entry which is critical to reducing mistakes and streamlining your small parcel shipping operation.

7. Automatic Email Notifications to Customers In order to handle higher volumes of orders which often come from eCommerce fulfillment, you must streamline your processes and reduce the need for additional customer service. With increased order volume, often comes increased customer support needs -- the trick is to increase your volume without any additional back office resources. And this is possible with a robust reporting and email notification system as part of your 3PL WMS offering. As a 3PL operator you know the availability of real-time, accurate information is as important as any core function. Customers demand immediate details, but they do not all expect it to be delivered identically. Some want it pushed to them via automatic e-mail updates, while others wish to pull it themselves via their own access to online reporting. Some want it both ways. A robust WMS enables the 3PL operator to provide flexible communication options to its varied customer base, and a great WMS does so while rolling that functionality into the day-to-day workflow. This streamlines this critical task operationally while eliminating missed customer updates.

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With a solid 3PL WMS you should have the ability to automatically email both your customers and the customers customer (i.e. the consumers) information when an order ships. Automatic email notifications should also be fully customizable by customer and for different audiences (internal users versus the consumer.) Also, customer service resources are greatly reduced when customers can access real-time reports online at anytime. This provides your customer with both the control and visibility which they often do not even have in their own internal systems. 3PL operators know what missed customer updates can mean: an upset customer with other 3PL options. Communication is at the heart of a 3PLs core services, and a great 3PL needs a WMS that provides immediate, accurate details. Finding and keeping customers is a difficult task, but losing them is easy. The best defense is communication, and the best communication is delivered automatically and sent at the time the task is completed.

Conclusion
Dont let the opportunities of eCommerce fulfillment pass you by. And, if you pursue eCommerce fulfillment, make sure youre 3PL warehouse is setup to do it right. A good 3PL-focused WMS solution can provide all of the basics you need to grow your 3PL business and take advantage of the online business boom.

The 7 Essentials for Successful eCommerce Fulfillment

1) Inventory Visibility & Synchronization 2) Real-time Communication of Order Details Between Shopping Cart Software and WMS 3) Handling Larger Order Volumes 4) Increased Pick Accuracy 5) Custom Branded Packing Slips 6) Integration with Shipping Systems 7) Automatic Email Notifications

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WebBased/SaaS
UNIQUE ADVANTAGES
Web-based applications are rapidly overtaking traditional software. Its numerous advantages are compelling and are making traditional, installed software obsolete. Web based software, also known as SaaS (software as a service), converts the costs of a WMS from a large capital expense to a subscription for a service.

AUTOMATED PROCESSES
- ORDER MANAGEMENT - RECEIVING OPERATIONS - AUTO NOTIFICATION MESSAGES - ONLINE REPORTING - INVENTORY MANAGEMENT - UCC-128 LABEL PRINTING - SHIPPING MANAGEMENT - BILLING MANAGEMENT

This on-demand pricing structure is ideally suited for how 3PLs run their business. Aside from making robust applications affordable, SaaS allows 3PLs to pay for what they use. Other benefits include:
Full functionality is available anytime from any

internet-enabled PC. Set-up and integration is simple and inexpensive. No IT investments no expensive hardware required. Product improvements are accessible to all users at the same time. No long-term contracts.

No upgrade fees.

About3PLCentral

BUILT EXCLUSIVELY FOR 3PLs

3PL Central is the only web-based WMS built exclusively for the unique needs of a 3PL. 3PL Central provides easy-to-use, on-demand warehouse management software (WMS) exclusively for third-party logistics companies. 3PL Centrals product, 3PL Warehouse Manager, helps 3PLs run more efficiently, grow their business and satisfy customers beginning at less than $500 per month per warehouse. Based in the Los Angeles area, 3PL Central is a privately held company and one of the fastest growing solution providers to the thirdparty logistics industry.

To learn more, contact 3PL Central: 1-888-375-2368, or at info@3plcentral.com.

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