Top 7 criteria every 3PL should consider when choosing a WMS

The global logistics industry is changing fast. As technology advances, businesses, including modern third-party logistics (3PL) companies, are looking for ways to simplify their operations and gain an edge over competitors.

One of the most important tools for doing that is a warehouse management system, or WMS. The WMS market has grown quickly, with new options appearing regularly, so it’s hard to know where to start. What features do you need? How do you avoid paying for things you won’t use? What about customer support?

This post covers seven criteria for choosing a WMS for your 3PL business. Not sure you’re ready yet? See the 6 signs it’s time to implement a WMS for your 3PL business. For a broader look at WMS types and the selection process, see our guide to how to choose a warehouse management system.

First, a quick review of the challenges a WMS solves.

What challenges do modern 3PL businesses face?

If you’ve read our blog, you know we’re no strangers to 3PL. 3PL operations are complex and getting more so, and the challenges you face keep changing. Here are some of the most common.

Too many manual processes

First it was pen and paper. Then spreadsheets. But going digital isn’t enough. Spreadsheets can’t be automated and don’t adapt as your business changes, and manual processes are no longer efficient or necessary. Many businesses, including some 3PLs, still rely on them, and it costs them time and money.

The risk is real. Imagine managing a new client in a spreadsheet. You add inventory when it arrives and subtract it when you pick and ship. If your warehouse team gets busy and misses a few entries, one wrong value can throw off all of that client’s inventory data. And if you don’t keep good records, it becomes a liability when a client comes looking for stock they say you have, and your system says you don’t.

Poor data integrity is common in manual systems, and it almost always means a lack of visibility and traceability for the inventory in your warehouse. It only gets worse as you handle more inventory.

Time-consuming implementation

Implementing a new WMS has to be straightforward, because you probably can’t shut down operations while you troubleshoot a new system.

Many companies think they can handle it alone, buying software from one vendor and hardware from another. But the software developer and hardware maker need to work together, or you’ll hit roadblocks. And a WMS implementation is about much more than learning the software. A failed implementation can take a long time to recover from, and stakeholders will remember it.

Poor reporting

A key benefit of a WMS is better visibility into your operations through live reporting and data-driven decisions. If the reporting is poor, you’re not getting the most out of the system. Reports need to be user-friendly and customizable, so they give each stakeholder insights that are relevant to them.

In a larger company, people want different reports, and your system should accommodate all of them without adding complexity or requiring extensive training.

Cumbersome software

The software behind your WMS should be flexible and easy to use. If it’s too complicated, people won’t use all of its capability, and you’ll need more help training users, so it takes longer for them to get up and running.

Using multiple tools for individual tasks

Too often, a WMS is used only to track physical inventory. At that point, you’re using a glorified (and more expensive) spreadsheet.

A modern WMS should handle multiple tasks across the business. If there are no integration points between your WMS and your other systems, you’re missing chances to automate tasks and save time and money. A WMS that integrates with your accounting system, ERP, shipping software, and more means you don’t waste time entering the same data into multiple systems. The interfaces have to be easy to use, too, or you’re back to the cumbersome software problem.

The bottom line: if you’re relying on manual processes or disconnected tools, it’s likely costing you business. Here’s what to look for in a WMS.

What criteria should you consider when looking for better software?

When shopping for a WMS, look for these seven criteria.

1. Client portal and reporting tools

For a 3PL, trust with clients is essential, and visibility builds it. A good WMS should let you:

• Give clients visibility into their inventory data, locations, and records
• Understand handling and storage costs by client
• Grant access to billing and activity history reports so you can bill clients accurately

Ask each vendor to show you what a client would actually see, and how you control what each client can access.

2. An easy-to-use interface

Choosing and using a WMS shouldn’t be an arduous process. The software has to be easy to understand and navigate, or you’ll lose the productivity gains from implementing it.

When you evaluate software, make sure you can see how you’d use it day to day. Is it clearly laid out? Is the experience smooth? That’s why a live demo matters: it lets you picture your own team using it. Features are nice, but if the user experience is poor, they won’t matter.

Questions to ask:

• Is it easy for all of your employees to use and learn?
• If training is required, how long does it take?
• Will staff need help from IT or another department when they have more complex questions?

3. Room to grow

Businesses of every size use WMS software, from a one-person shop to an international operation with warehouses around the world. Your system should be able to grow, or shrink, with your plans without disrupting existing workflows.

Ask how the system handles more clients, more locations, and more volume, and whether growth brings extra fees. Check whether connecting additional systems, integrations, or clients costs more, since that can limit how quickly you can take on new business.

4. Flexible integrations

A WMS should connect to the other systems in your business. Integrations let you automate tasks across departments and give you a more complete view of what’s happening. Without them, you’re stuck doing everything manually, which is slow and prone to error.

Check that it connects with your accounting system, ERP, shipping software, and your clients’ ecommerce platforms and sales channels, and ask what each integration includes.

5. Ability to handle multiple tasks

A modern WMS should handle more than inventory tracking. Make sure the software can manage receiving, storage, picking, packing, shipping, returns, and data entry into accounting or other systems. If you only use it to track physical inventory, you’re not getting the most from it.

6. Automation

Automation is critical for any logistics business. It reduces cost by cutting manual entry, so your team can focus on more complex work that adds value instead of keying data into multiple systems.

When vendors talk about automation, ask what’s actually automated: which tasks happen without manual steps, and which rules you can set up yourself. Specific answers matter more than buzzwords such as “AI-powered.”

7. Quick implementation

3PL owners need to be able to train staff quickly, because the volume of inventory moving in and out every day doesn’t pause for learning curves. Many implementations run over schedule and budget because of complexities nobody expected.

A good WMS should be implemented quickly without much fuss or extra cost, which matters most if you’re replacing an existing system or expanding your warehouse operations fast. Ask every vendor for a written timeline for an operation like yours. For reference, Linnworks go-live can take as little as 40 days, and your own timeline depends on your catalog, clients, and data.

What is the main benefit of a WMS?

A WMS improves the efficiency of your warehouse by automating tasks and giving you one system that connects with the rest of your business. It helps you manage inventory more effectively, makes tracking and finding items easier, and reduces errors from manual data entry, which saves time and money.

When it’s time for a change, turn to Linnworks

Now that we’ve covered the key criteria and the benefits of a WMS, here’s how Linnworks fits.

Linnworks warehouse management (powered by SkuVault) is built to simplify warehouse operations and help you get back to higher-value work, like growing your revenue. With it, you can:

• Reduce incorrect shipments with quality control checks that verify items as they’re picked and packed
• Improve accuracy and speed with 1D and 2D barcoding and cycle counting
• Convert case quantities into individual units for better traceability and inventory visibility
• Connect your shipping software to automate ecommerce transactions

Linnworks also connects with 100+ native channel integrations and keeps stock in sync across them in under 10 minutes, which helps when your clients sell on several channels.

See the full list of features on our warehouse management system page, or request a demo to see how Linnworks can help you simplify your logistics and inventory management.