Accurate Data Key to 3PL Order Accuracy
The saying “garbage in, garbage out” certainly applies to the retail supply chain. Wherever incomplete or errant data is found, so are mistakes, delays and additional costs. SPS recently surveyed nearly 200 third-party providers (3PLs) about data. The responses showed a direct correlation between timely and accurate data from customers and their order accuracy. The better the data 3PL customers can provide, the better for the 3PL as far as efficiencies, profitability and customer service.
First Order vs Final Order
In the survey, 60 percent of 3PLs shared that 75 percent or more of their customers share all of the data needed to meet their fulfillment expectations. At first glance, this indicates that 3PLs are getting the data their warehouse and fulfillment teams need. But the responses to subsequent survey questions clearly show the process breaks down after 3PLs receive the original order.
The first order communication is received in a timely manner, but there are often order and shipping changes that are poorly communicated or tracked in the 3PL’s system. Below are some comments from survey respondents that show there are wide-spread errors in the fulfillment data they receive including inaccuracies, typos, and errors. Often, the 3PL is the one to identify these errors before it impacts the 3PL’s order accuracy.
Validating Orders Takes Precious Time
When a 3PL’s data from their customer is incomplete or wrong, the pick-and-pack and shipping process is delayed. The 3PL’s customer service or warehouse team must devote time to correct the error(s) which can range from contacting the customer to manually checking item numbers.
Suppliers use 3PLs to take on the logistics and fulfillment aspects of their business. Without proper data, the 3PL cannot perform the tasks it was hired to do in the most efficient manner. These delays can impact shipments, putting on-time deliveries at risk. For the 3PL, data errors also cut into their margins as staff are address them. Incomplete data can also throw off warehouse schedules.
Better Data for 3PL Providers Benefits All
To improve customer data for 3PLs, there is a clear answer: automation. EDI is the most popular choice for 3PLs automating communications/orders with customers. In the study approximately a third of 3PLs reported they use EDI to exchange data with 75 percent or more of their customers. Email was the second most popular communication method at 23 percent, followed closely by APIs at 22 percent.
3PLs see a clear connection between automation and accuracy. When EDI is used, the quality of order data is greatly improved. Automation delivers two key benefits according to the 3PL survey. The first that it drives fewer errors (75 percent). The second highest response at 73 percent was that it improves order accuracy.
SPS asked 3PLs what was the one thing they would be doing to address 3PL order accuracy. The responses focused on automation, specifically increasing their use of EDI.
What are 3PLs doing in to improve order/fulfillment accuracy?
- Trying to move clients to EDI
- Working with customers to increase use of EDI
- Moving towards paperless workflow
- Standardizing system processes to minimize the need for manual data input
- Improving data flow through EDI, APIs and system upgrades
- Encouraging clients to use more automated data inputs
Interested in seeing how to receive complete and more standardized data? See how SPS for 3PLs can streamline your communications.
* This survey was conducted in 2020
Prior to joining SPS in 2019, Mark was President of Taylor Communications and held executive roles at Phreesia, UnitedHealth Group, and US Bank. In addition, Mark is an active board member in the technology start-up and non-profit community.
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