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A Two-Prong Approach for Improving 3PL Agility

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CASE STUDIES

Our Client

 

Third-party logistics (3PL) providers have become increasingly popular in recent years, as they allow companies to outsource their logistics operations to a specialist provider. In this case study, we examine how one 3PL clients transformed into a more responsive e-commerce provider by working with Open Sky Group to improve space and labor management with newly implemented supply chain solutions.

Open Sky Group was founded in 2006 and has since become a leading provider of supply chain and logistics solutions. They specialize in helping companies optimize their supply chains and reduce costs with technology and automation.

THE CHALLENGES

Managing labor and warehouse space for a limited number of SKUs through high and low seasonal peaks is challenging enough for a manufacturer operating a dedicated distribution center. When you consider the complexities of doing the same for dozens of brands, as third-party logistics (3PL) companies do every day for their e-commerce clients, the challenge can be downright daunting.

THE TRANSFORMATION

The Solution:

Juggling space and talent to accommodate multiple inventories, promotions, shipping schedules, and business rules requires acute flexibility on the part of any 3PL. Our 3PL client services their client fulfillment needs within the current warehouse by allocating dedicated space to each client based on forecasted needs throughout the year, including peak season. This dedicated space model leverages the WMS to configure client-specific processes, where needed, to provide a custom experience for each client and their consumers. To slot the warehouse in the most efficient way, frequently picked items are front and center, and grouped with other items typically sold together. Labor teams work key areas of the warehouse according to fluctuating client demands.

 

The 3PL began working with Open Sky Group to implement a tier one WMS, WFM and LMS, now the backbone of the company’s operating systems. Positioned in the cloud, the combined systems seamlessly interface with their various customers, carriers, and partners to provide a single version of truth across the enterprise.

With the newly implemented WMS, our 3PL client was able being processing the data surrounding every item stored in the warehouse. As goods come in and flow through the warehouse, floor managers can determine where items are in relation to open customer orders, move product into optimal positions for prompt picking, packing and shipping, and analyze historical information useful in forecasting future inventory events.

 

The implemented system tracks weight and dimensions of every box and integrates with the company’s enterprise level Transit Management System (TMS) so that shipments can be processed in real-time at the lowest possible cost with the most appropriate carrier for the fastest possible delivery. These requirements can be modified to meet each customer’s unique business rules.

 

Likewise, the labor side of the equation is managed by the company’s LMS system. Based on data indicating volumes for an average week, shifts are set. The system accounts for various skill sets, tailoring the right combination of pickers, packers, kitters, lumpers, labelers and drivers to economically staff each shift. As each day progresses, it identifies bottlenecks, slow areas and available personnel across the floor to keep the warehouse moving at peak efficiency.

With their WMS and LMS both implemented by Open Sky Group, our 3PL client noticed cross-training is simplified; 80% of what a warehouse associate learns in one area of the operation can be transferred. This allows for staff trained in one area to be deployed in another area based on volume demands, with minimal time required for training.

 

Open Sky Group is a leading provider of 3PL services that can help companies improve efficiency, reduce costs, and scale their logistics operations as needed. With their expertise in transportation management, warehousing, fulfillment, and value-added services, they are well-equipped to help companies optimize their supply chains and remain competitive in a rapidly changing marketplace.

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