A to Z of 3PL: All the definitions you need to know about order FULFILMENT and E-logistics
In the ever-evolving landscape of logistics and supply chain management, the language used to describe processes, technologies, and services can be complex. For those venturing into the world of Third-Party Logistics (3PL), understanding the terminology is crucial for effective communication and collaboration. This article aims to demystify the definitions of key terms in the realm of 3PL, shedding light on the language that forms the backbone of this dynamic industry.
3PL (Third-Party Logistics): Third-Party Logistics, commonly abbreviated as 3PL, refers to the outsourcing of logistics and supply chain functions to an external provider such as Dress Circle Warehousing. These providers specialize in an array of services, including transportation, warehousing, distribution, and fulfillment. Companies often turn to 3PL providers to enhance efficiency, reduce costs, and streamline their overall supply chain operations.
Air Cargo: Air Cargo involves the transportation of goods by air. It plays a crucial role in expedited shipping, especially for time-sensitive or high-value products. 3PL providers work to optimize air cargo solutions, ensuring timely and efficient delivery.
B2B (Business-to-Business): B2B refers to business transactions that occur between two businesses. It is a type of commerce or transaction where products, services, or information are exchanged between two or more businesses. In a B2B scenario, the buyers and sellers are business entities rather than individual consumers.
B2C (Business-to-Consumer): B2C transactions involve businesses selling products or services directly to end consumers. It refers to a type of commerce or transaction where businesses sell products, services, or information directly to individual consumers.
Backorder: A Backorder occurs when a customer places an order for a product that is temporarily out of stock. Managing backorders involves coordination with suppliers, inventory management, and effective communication to fulfill orders promptly once stock is replenished.
Barcoding: Barcoding is the use of barcode technology to track and manage inventory. Barcoding plays a vital role in optimizing order processing, improving accuracy, and enhancing overall inventory management efficiency.
Batch Fulfilment: Batch Fulfilment involves processing and fulfilling multiple orders simultaneously. This approach is particularly useful for 3PL providers dealing with products grouped in batches, streamlining the fulfillment process.
Carrier: A Carrier is a company or individual responsible for transporting goods from one location to another. 3PL providers collaborate with carriers to optimize transportation logistics, ensuring cost-effective and reliable delivery services.
Crowdfunding Fulfilment: Crowdfunding Fulfilment refers to the logistics and fulfillment services required for products funded through crowdfunding campaigns. 3PL providers play a crucial role in storing, packing, and shipping products to backers, ensuring a smooth process for crowdfunding initiatives.
Dashboard: A Dashboard is a visual interface that displays key performance indicators (KPIs) and metrics related to logistics operations. Dashboards provide real-time insights, facilitating informed decision-making and efficient monitoring of logistics activities.
Dimensional Weight: Dimensional Weight is a pricing technique based on a package's volume rather than its actual weight. 3PL providers take dimensional weight into consideration for accurate shipping cost calculations, optimizing cost-effectiveness in transportation.
Distributed Inventory: Distributed Inventory involves strategically storing inventory across multiple locations to reduce shipping times and costs. 3PL providers implement distributed inventory strategies to ensure timely and efficient order fulfillment.
Dropshipping: Dropshipping is a fulfillment method where products are shipped directly from the manufacturer or distributor to the end customer without passing through the retailer's inventory.
DTC (Direct-to-Consumer): DTC refers to the Direct-to-Consumer business model, where products are sold directly to end consumers without intermediaries. Supporting DTC brands involves providing logistics and fulfillment services tailored to meet direct consumer demands.
Ecommerce Platform: An Ecommerce Platform is an online platform where businesses sell their products or services. In the 3PL landscape, integration with ecommerce platforms is essential for seamless order fulfillment, ensuring a smooth flow of information between online storefronts and logistics operations.
EDI (Electronic Data Interchange): Electronic Data Interchange (EDI) involves the electronic exchange of business documents between different companies. 3PL providers leverage EDI for seamless communication, improving accuracy and efficiency in data transfer and processing.
FBA (Fulfillment by Amazon): Fulfillment by Amazon (FBA) is a program where Amazon provides storage, packing, and shipping services for third-party sellers.
Freight Forwarder: A Freight Forwarder is a company that arranges and manages the transportation of goods on behalf of shippers. In 3PL, collaboration with freight forwarders is common to optimize shipping routes, ensuring efficient and cost-effective freight transportation.
Freight Shipment: A Freight Shipment involves the transportation of goods by various modes such as truck, rail, air, or sea. In the 3PL landscape, coordinating and optimizing freight shipments is a core service to meet the diverse needs of clients.
Less-than-truckload (LTL) - One to six pallets
Partial truckload (PTL) - Six to twelve pallets
Full truckload (FTL) - Twelve to twenty four pallets
Fulfillment Centre: A Fulfillment Centre is a facility where orders are received, processed, and shipped to customers. 3PL providers operate fulfillment centers, serving as centralized hubs for efficient and accurate order fulfillment.
Fulfillment Service Provider: A Fulfillment Service Provider is a company that specializes in providing order fulfillment services, including warehousing, picking, packing, and shipping. In the 3PL realm, providers offer comprehensive fulfillment services tailored to the unique needs of their clients.
Hazardous Materials: Hazardous Materials are substances that pose a risk to health, safety, property, or the environment. Managing and transporting hazardous materials involves strict adherence to regulations and safety standards to ensure the secure handling of such goods.
Inventory: Inventory refers to the stock of goods a company holds for production, storage, or shipment. Dress Circle Warehousing plays a critical role in managing and optimizing inventory levels to meet client requirements while minimizing costs.
Inventory Management: Inventory Management is the strategic control and tracking of stock levels to meet customer demand while minimizing costs. Advanced inventory management systems are employed to ensure efficient and accurate tracking of inventory.
Kitting and Assembly: Kitting and Assembly involve the process of combining multiple items into a single package. Dress Circle Warehousing offers kitting and assembly services to create product bundles or kits, streamlining the fulfillment process for diverse product offerings.
Last-Mile Delivery: Last-Mile Delivery is the final stage of the delivery process, ensuring that products reach the end customer's location. Optimizing last-mile delivery is crucial for enhancing customer satisfaction and meeting delivery expectations.
Net-Weight: Net-Weight is the weight of a product excluding packaging. Consideration of net-weight is essential for accurate shipping calculations, ensuring transparency and precision in weight-related logistics processes.
On-Demand Warehousing: On-Demand Warehousing involves temporary access to warehouse space as needed, providing flexibility for businesses with fluctuating storage needs. Dress Circle Warehousing offers on-demand warehousing services to accommodate varying inventory levels.
Order Fulfillment: Order Fulfillment is the process of receiving, processing, and delivering customer orders. 3PL providers specialize in efficient order fulfillment, ensuring accuracy, timeliness, and customer satisfaction.
Packing: Packing is the process of preparing products for shipment, including packaging and labeling. It is important to ensure that products are packed securely and in compliance with shipping regulations to safeguard against damage during transit.
Packer Slip: A Packer Slip is a document that accompanies a package, detailing its contents and handling instructions. Packer slips play a crucial role in facilitating accurate order picking and packing, reducing the risk of errors in the fulfillment process.
Pallet: A Pallet is a portable platform with both a top and bottom deck for storing and transporting goods. Pallets are used to efficiently handle and move bulk quantities of products, optimizing warehouse space and transportation.
Picking: Picking is the process of selecting items from inventory to fulfill customer orders. 3PL providers employ various picking methods, such as batch picking or zone picking, to enhance efficiency and accuracy in order fulfillment.
Picking List: A Picking List is a document that guides warehouse staff in picking items for customer orders. The use of picking lists is standard practice to ensure systematic and accurate fulfillment of orders.
Receiving: Receiving is the process of accepting and recording incoming inventory. Receiving involves careful inspection and logging of received goods, ensuring accurate inventory management and transparency in the supply chain.
Reorder Point: Reorder Point is the inventory level at which a new order should be placed to prevent stockouts. 3PL providers assist clients in setting optimal reorder points, minimizing the risk of inventory shortages and disruptions.
Returns Handling: Returns Handling is the process of managing and processing product returns. Efficient returns handling is essential for maintaining customer satisfaction and facilitating the reverse logistics process.
Self-Fulfillment: Self-Fulfillment refers to businesses managing their own order fulfillment and logistics internally without outsourcing to third-party. Some companies opt for self-fulfillment to maintain control over the entire supply chain process.
Shipping Zones: Shipping Zones are geographical regions used to determine shipping costs based on distance. Consideration of shipping zones is crucial for accurate shipping cost calculations and optimizing transportation strategies.
SKU (Stock Keeping Unit): SKU, or Stock Keeping Unit, is a unique identifier assigned to each product for tracking purposes. SKUs are used to manage and organize inventory systematically, facilitating accurate order fulfillment and inventory tracking.
Split Shipment: Split Shipment involves dividing a customer's order into multiple shipments, each sent separately. The use of split shipments can optimize delivery times and accommodate specific customer preferences or requirements.
Storage Fees: Storage Fees are charges associated with storing products in a warehouse. Storage facilities apply storage fees based on factors like volume and duration, reflecting the cost of maintaining and managing goods.
Warehousing: Warehousing involves the storage and management of goods in a warehouse facility. Warehousing services play a pivotal role in efficient inventory management, ensuring products are stored securely and retrieved promptly for order fulfillment.
White-Label Shipping: White-Label Shipping refers to shipping services where the carrier's branding is not visible, allowing businesses to use their own branding. Dress Circle Warehousing offers white-label shipping options, allowing clients to maintain brand consistency throughout the fulfillment process.
WRO (Warehouse Receipt Order): A Warehouse Receipt Order (WRO) is a document acknowledging the receipt of goods into a warehouse. WROs are essential for tracking and managing incoming inventory, providing transparency and accountability in warehouse operations.
In the dynamic world of 3PL, understanding the nuances of terminology is paramount. The definitions provided above offer a comprehensive guide to navigating the realm of Third-Party Logistics. As businesses continue to embrace outsourcing for enhanced efficiency and streamlined supply chain operations, a clear understanding of these key terms becomes the foundation for successful collaborations and optimized logistics processes. Whether you are a seasoned professional or a newcomer to the 3PL landscape, a shared language ensures effective communication and paves the way for continued innovation in the world of logistics and supply chain management.