The connection of an external logistics service provider (3PL) optimizes logistics processes through increased efficiency, flexibility, and scalability. Modern interface technologies, digital tracking solutions, and automated warehouse management ensure a transparent, cost-efficient, and high-performance supply chain.
Why should your company consider connecting to an external 3PL service provider?
Connecting to an external 3PL service provider (Third-Party Logistics) can bring numerous advantages to your company. One of the main reasons is the (partial) outsourcing of warehouse logistics. By using a specialized service provider, you can concentrate your internal resources on your core business while benefiting from the expertise and advanced technologies of the 3PL provider.
In addition, working with a 3PL service provider offers flexibility and scalability. An external logistics service provider can react quickly to seasonal fluctuations or unexpected events and adapt its services to the changing needs of your company.
How does system integration take place between our company and the logistics service provider?
The integration of an external 3PL warehouse and the use of SAP WM (Warehouse Management) or SAP EWM (Extended Warehouse Management) enable significant efficiency improvements in warehouse logistics. The company uses an ERP system (e.g. SAP S/4HANA, Microsoft Dynamics 365), while the logistics service provider may use a customized logistics system. Since different systems are in use, data is exchanged via electronic interfaces such as EDI (Electronic Data Interchange) and APIs (Application Programming Interfaces). Middleware such as SAP PI, SAP PO or Mulesoft can support this to ensure a smooth connection between the systems.
Formats such as XML, CSV and JSON are used to standardize data exchange. JSON is used in particular for modern API communication. This ensures real-time integration of stock levels and automated shipment tracking through track-and-trace systems.
The efficiency of connecting an external logistics service provider
Which service and performance standards should be agreed with the logistics service provider?
A central aspect of the cooperation is the definition of delivery times and availabilities. Delays or delivery difficulties are managed through defined escalation processes and close coordination with the service provider. Companies often use project management methods such as ITIL for service processes or agile approaches with Scrum for rapid adjustments.
Returns management is another important point. The handling of returns and general returns management must be coordinated with the service provider and the processes defined.
The quality of the service is monitored using KPIs (Key Performance Indicators), including:
- Delivery accuracy (On-Time-Delivery, OTD),
- Delivery time (average transport duration),
- Damage rate (proportion of damaged shipments).
In addition, there are contractual regulations regarding liability and claims settlement. Service Level Agreements (SLAs) define minimum standards to ensure consistently high quality.
How is transparency, communication and flexibility ensured in the cooperation?
A high degree of transparency and regular status updates are essential for successful cooperation. Communication takes place via fixed contact persons and regular meetings.
The logistics service provider offers different service levels, including express and standard deliveries as well as different shipping methods. Compliance with the service levels is ensured by dashboards and reports that enable end-to-end tracking of the processes.
An important factor is the flexibility of the service provider to be able to react quickly to seasonal fluctuations or unexpected events. Many 3PL providers use dynamic warehouse capacities or on-demand warehousing platforms to temporarily provide additional space.
Likewise, the scalability of the solution must be ensured so that growing business requirements can be easily integrated.
Which financial aspects are regulated?
The cost structure must be transparent and can be regulated either via fixed tariffs or consumption-based billing. Common models are:
- Fixed tariffs → monthly fixed costs for storage space,
- consumption-based billing → Pay-per-Use model for storage space or transport,
- Additional costs for special requirements → e.g. express shipping or special storage requirements such as refrigerated transport.
By connecting a 3PL logistics company and integrating the system with SAP, the efficiency of logistics processes is increased, supply chain transparency is enhanced, and supply chain management is optimized. The use of modern interface technologies, digital tracking solutions and intelligent warehouse automation enables a cost-efficient, flexible and scalable logistics solution.
Optimize your logistics today! Benefit from more efficiency, flexibility and scalability by connecting to a 3PL service provider. Contact us now for a customized solution!
