Third-party logistics (3PL) software manages outsourced supply chain activities such as transportation and warehousing. Companies that choose not to have their own warehouses and fleets of trucks can work with third parties that manage these activities for them. This type of software is used by 3PL providers to plan, schedule, and monitor supply chain operations on behalf of their customers. Customers should also have access to the system, which improves transparency in their supply chain.
While some vendors offer 3PL products specifically designed for outsourcing, other solutions can be used by 3PL providers and by any company that wants to manage supply chain operations internally. As part of a company's larger suite of supply chain management tools, 3PL software integrates with transportation management software and warehouse management software. Furthermore, third-party logistics software is used more and more by e-commerce companies and requires integration with e-commerce platforms.
To qualify for inclusion in the Third-Party Logistics (3PL) category, a product must:
Manage contracts and service level agreements for SCM outsourcing
Provide features for multi-warehouse and inventory management
Deliver functionality for transportation management and shipping
Track the costs (estimate and actual) of all outsourced supply chain activities
Maintain a repository of providers of supply chain operations
Allow customers to access information such as inventory availability
Include metrics and KPIs that customers can use to track performance
