This means modern 3PL providers are expected to manage diverse inventory, meet tight delivery windows, and provide real-time visibility, while battling rising operational costs and labor shortages thanks to the flagging global economy.
To survive in this increasingly competitive market, many 3PL providers have adopted warehouse management systems (WMS) — software solutions that optimize processes such as inventory tracking, order management, and shipping facilitation.
Thanks to 3PL warehouse management systems, many 3PL companies have successfully optimized warehouse performance, boosted client satisfaction, and future-proofed their business. However, many also ended up with the wrong WMS due to falling into avoidable traps during the WMS selection process, such as underestimating user experience and picking systems that don’t scale.
This article outlines the most common 3PL WMS selection mistakes. It also provides actionable tips for picking the best WMS for fulfillment centers.
Key takeaways
- The best WMS for your ecommerce company must integrate with enterprise resource planning (ERP) solutions, ecommerce platforms, and carriers.
- User-friendliness leads to reduced training time, lower training costs, and higher adoption rates among warehouse staff.
- Client-facing features like portals and real-time dashboards boost transparency and trust.
- Cloud-native WMS solutions provide cost-effective scalability and can future-proof your business.
- 3PL providers must consider the total cost of ownership (TCO) when deciding what WMS to get, not just upfront licensing fees.
Common mistakes to avoid when choosing a 3PL WMS
With numerous options available on the market, selecting the right WMS can be a challenging task. Here are the top mistakes to avoid when choosing a 3PL WMS.
Mistake #1: Underestimating scalability and future needs
Many 3PL companies make the mistake of picking a WMS solely based on current needs. This can cause them to pick a lightweight WMS that only works for existing client volumes and stock keeping units (SKUs), but won’t be able to handle new customers, warehouses, and verticals.
That’s why you should always pick a scalable WMS that can handle future needs. A scalable WMS can support growing order volumes and multi-warehouse operations, while also handling seasonal fluctuations and complex inventory rules.
Mistake #2: Ignoring integration capabilities
If 3PL providers overlook the importance of seamless integration, they may choose a WMS that can’t “talk” to core systems in the supply chain, such as ERPs, ecommerce platforms, and shipping carriers. This leads to data silos, manual data entry, order processing delays and bottlenecks, and customer dissatisfaction.
To avoid these issues, 3PLs should prioritize WMS platforms with seamless integration capabilities. The right solution will enable real-time data exchange across your tech stack, eliminating the need for error-prone manual processes and ensuring warehouse and client systems are always in sync.
Mistake #3: Overlooking the user experience (UX)
Many 3PL providers frequently overlook the importance of user experience (UX)—the overall experience a user has when interacting with the WMS.
As a result, 3PLs may end up with a technically capable but outdated, unintuitive WMS that frustrates users. The clunkier the interface, the lower the adoption rate—leading to longer training times, more user errors, and decreased overall efficiency.
Additionally, a user-friendly design is now a must to attract and retain warehouse staff at all levels. Today’s workforce, including tech-savvy Gen Z employees, expects intuitive, mobile-friendly interfaces.
Mistake #4: Neglecting client-facing features
A WMS isn’t just for internal operations—clients also use the system for real-time visibility into their inventory, order status, and fulfillment performance. As such, 3PLs need a cloud WMS with a robust client portal. Without one, clients will be unable to track both inbound and outbound shipments, view stock levels in real-time, and access dashboards for reporting and analytics. This lack of transparency can lead to confusion, support tickets, and ultimately, client dissatisfaction.
Request a free demo to learn more about Logiwa WMS.
How to choose a WMS for 3PLs
Now that you know what mistakes to avoid when choosing a WMS, here are some tips to select the best WMS for your 3PL company.
Tip #1: Define your requirements and create a scorecard
First, identify your specific needs before selecting a WMS. Consider the following:
- Current order volume
- Client expectations
- Reporting requirements
- Labor capabilities
- Integration stack
Then, create a scorecard to evaluate potential WMS vendors objectively. This will help you assess every solution against your list of needs.
Involve key stakeholders from across the organization, including warehouse operations, IT, sales, and customer support. Gathering opinions from all departments ensures the final decision aligns with the broader needs of your company, not just one team’s preferences.
Tip #2: Prioritize cloud-native and SaaS solutions
When creating a list of potential WMS vendors, prioritize modern WMS solutions like cloud-native Software-as-a-Service (SaaS) systems. Designed to run in cloud environments, a cloud-native SaaS WMS enables users to access warehouse information in real-time from anywhere in the world on a subscription basis.
Key benefits of cloud-native WMS for 3PLs include:
- Lower upfront costs and faster WMS implementation for 3PLs
- Automatic software updates and security patches
- Seamless remote access for distributed teams
- Easier scalability across multiple warehouses or clients
#3: Conduct thorough due diligence
Don’t just rely on vendor demos or sales presentations when evaluating a WMS. To make an informed decision, you need to go beyond the demo:
- Check client references: Speak directly with other 3PLs or companies of similar size and complexity.
- Read case studies: Look for examples online that align with your industry, volume, or growth stage. For example, if you deal with temperature-sensitive products, look for case studies that highlight how a WMS handles cold chain logistics.
- Seek independent reviews: Use platforms like G2 to read unfiltered feedback from real users.
#4: Consider the Total Cost of Ownership (TCO)
3PLs often fall into the trap of focusing solely on the WMS initial license fee. However, a WMS with a low upfront price may still prove expensive once you factor in real-world operational needs.
Instead, you should consider all costs associated with the WMS, including:
- Implementation and setup fees
- Training and onboarding costs
- Ongoing support and maintenance
- Customization or integration expenses
You should also consider the vendor’s pricing model. Some WMS use a traditional per-user pricing model, which varies depending on the number of users with accounts in the system. Others use a volume-based pricing model, where your monthly bill depends on the number of orders processed.
Generally speaking, for growing 3PLs, volume-based models provide greater scalability, more predictable costs, and better alignment with business performance.
Make a Smart Decision for the Future: Choose a Reliable WMS
Choosing the right WMS isn’t just a software decision. It’s a long-term investment in the growth and future of a 3PL. Besides optimizing inventory tracking, a robust WMS streamlines order management, accelerates shipping, minimizes delays, and boosts overall client satisfaction.
However, picking the right WMS is easier said than done. 3PLs often pick the wrong WMS by underestimating scalability and future needs, ignoring integration capabilities, overlooking UX, and underestimating the importance of client-facing features.
To create a list of the best WMS vendors, you must:
- Clearly define your requirements and create a scorecard.
- Prioritize cloud-native SaaS solutions for scalability and ease of use.
- Perform thorough due diligence with case studies, client references, and independent reviews.
- Consider the total cost of ownership (TCO), not just the initial subscription cost.
If you’re looking for a user-friendly, cloud-native SaaS WMS, consult a Logiwa fulfillment expert today. Logiwa’s AI-driven warehouse management helps you take back control of your warehouse.
