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The Role of Automation Technology in 3PL Ecommerce Fulfillment

In the increasingly digitized world of e-commerce, businesses face a growing need to be faster and more efficient. This is especially true in the realm of e-commerce fulfillment, where customer satisfaction hinges on the speed and accuracy of order processing, inventory management, and delivery.

To help with these tasks, many companies rely on outside experts called third-party logistics providers (3PL) who can offer a comprehensive suite of services to manage their supply chain effectively. However, as customer expectations continue to evolve, 3PL providers need to keep one step ahead with the latest technology to improve their services.

This article outlines how technology, especially automation, is making a big difference in how 3PL providers handle online orders and why it matters.

Understanding Technology-Enabled 3PLs

Before delving into the specifics of how automation technology is revolutionizing third party logistics, it’s important to understand what a ‘technology-enabled 3PL’ entails. Essentially, these are logistics providers that leverage cutting-edge technology solutions to streamline shipping and order fulfillment. They combine traditional logistics services, such as inventory warehousing, picking, packing, and shipping, with goods-to-person automation, and sophisticated software that integrates data from various sources. This combination of technology and logistics provides an end-to-end e-commerce fulfillment solution that enhances visibility, efficiency, and accuracy.

Investing in Automation Technology

 The cost of initially implementing automation technology can be substantial. It includes expenses for purchasing equipment, software, and infrastructure changes. But the upfront investment should be compared to the expected long-term benefits, which are outlined in the section below.

For 3PLs, it’s essential to conduct a comprehensive cost-benefit analysis to determine the overall cost efficiency of implementing automation technology. This analysis should consider the specific circumstances and goals of the 3PL and its clients, as well as industry trends and competitive pressures. Automation can be a valuable investment for many 3PL providers with benefits that can be shared with clients through smart-task completion. But automation technology should be strategically planned and executed to maximize cost efficiency and long-term success.

The Benefits of Using a Technology-Enabled 3PL

 E-commerce fulfillment automation is the integration of technology with business resources to create a seamless process from start to finish. By automating established best practices, it accelerates processes, enhances efficiency, reduces human errors, and saves on costs and time.

The decision to partner with a technology-enabled 3PL offers a host of advantages for e-commerce businesses. Here are the top nine benefits.

 1. Efficiency through Automation

Automation eliminates the need for manual order entry and dispatching, thereby saving time and reducing the chance of errors. With a 3PL’s software integrated directly with online storefronts, the warehouse is notified the moment a new order is placed. Each step in the order fulfillment process is then documented and updated in real-time, providing sellers with up-to-date information on the status of every order.

Automation can also come in the form of goods-to-person automation such as collaborative robots, automated sortation, or box-on-demand. These types of automation solutions help support employees, reduce carbon footprint, and create efficiencies through smart task completion.

VLM Automation Technology

 2. Faster Order Processing

Automation allows for faster order processing through secure and effective data exchange. Administrative tasks can be automated, freeing up time and resources for other strategic growth activities.

 3. Optimized Warehousing

Automation algorithms can identify the optimal fulfillment center for prompt, efficient delivery of orders. With access to a nationwide distribution network and millions of square feet of fulfillment space, businesses can find the ideal warehouse location for any circumstance. Additionally, goods-to-person automation solutions can assist workers, improve accuracy, and speed up and streamline item retrieval.

4. Faster Delivery Times

Customers expect fast delivery as part of their purchasing experience. Fulfillment automation creates workflow efficiencies to maintain speedy delivery times, ensuring products are delivered as designated by the brand. 3PLs, like SCI, who have integrated contract logistics and transportation solutions can streamline these services even more and simplify your supply chain.

5. Cost-Efficiency

Automation can reduce the need for manual labour, which is helpful to offset labour shortages. This reduction in labour costs can lead to long term savings. Automation also results in increased throughput with improved speed and efficiency of order processing, warehousing, and transportation. This can lead to more orders processed and increased capacity to serve more customers. Automation can also make it easier to scale operations up or down according to demand, helping to optimize resource usage. Automation technology can even help track and analyze operational costs, enabling 3PLs to identify areas for cost reduction and efficiency improvement.

6. Data-Driven Decision Making

Automation technology allows 3PLs to collect, integrate, and centralize data from various sources, including warehouse management systems (WMS), transportation management systems (TMS), sensors, and IoT devices. This integration creates a single source of truth for operational data. Automation systems provide real-time data, offering immediate insights into inventory levels, order statuses, and transportation metrics. This real-time access enables quicker decision-making.

Automation technology can also leverage historical data and machine learning algorithms to predict trends, demand fluctuations, and potential issues. This aids in proactive decision-making. Automation helps optimize inventory levels by monitoring stock in real-time and suggesting reorder points. Data-driven decisions on inventory management can reduce holding costs and stockouts.

Advanced analytics provided by fulfillment software can even help businesses make more informed decisions regarding their shipping and logistics strategies. Custom metrics, such as revenue of orders shipped by day, sales by channel, peak fulfillment times, and sales and quantity of orders based on delivery zones, can offer valuable insights, guiding more effective supply chain decisions.

Data Driven Automation Technology Insights

 7. Smoother Returns Management

 Automation streamlines the returns process by automating the initiation, authorization, and tracking of returns. This speeds up the handling of returned items, reducing customer wait times and operational delays. Automation also aids in optimizing the logistics and transportation aspects of returns, reducing transportation costs, and improving the speed of return item processing. Automation technology can set up tracking and alerts for customers to know when their package is arriving and how they can make a return. Automated systems can also print return labels, sort returned items, and direct them to the appropriate processing areas, reducing manual labor and minimizing errors. Finally, automation ensures that returned items are promptly reflected in inventory management systems. This helps prevent issues like overstocking or overselling and allows for quicker restocking or resale of returned products.

8. Reduction in Errors

By automating the order fulfillment process, technology-enabled 3PLs can significantly reduce the likelihood of human error. Integrated systems offer greater transparency, allowing sellers to monitor the accuracy of the 3PL’s operations at every stage. Automation systems can also alert 3PLs to potential risks and issues, such as supply chain disruptions or compliance violations, allowing for timely responses.

In e-commerce and supply chain management, automation ensures that orders are processed accurately, reducing the risk of shipping the wrong items or incorrect quantities. Automated systems can also keep track of inventory levels in real-time, reducing the chances of overstocking or overselling products.

9. Enhanced Customer Service

 A smooth order fulfillment process is key to customer satisfaction. Fulfillment software provides sellers with a comprehensive view of the entire process, enabling them to improve service delivery. By offering up-to-date information, technology-enabled 3PLs help businesses meet the fast and accurate customer service standards expected in today’s next-day landscape. Automation technology can help create different categories to apply specific values on customer orders, lifetime cycle, and acquisitions. This data-driven approach helps improve business strategy and optimize the entire supply chain.

Why is Automation Technology Important for E-commerce Sellers?

While automation offers numerous benefits, it’s essential for businesses to assess when it’s the right time to implement an automated fulfillment solution. Here are some factors to consider:

Task Efficiency

If your business is spending excessive time on manual, repetitive tasks such as triggering shipping notifications, identifying best-selling items, managing refunds, and pinpointing best sales channels, automation can significantly streamline these processes.

Cost Savings

Compare the costs of an ecommerce fulfillment automation software solution with the cost for roles necessary to manually perform the work. By eliminating manual tasks, automation can result in significant cost savings, allowing resources to be redirected towards growth initiatives.

Improved Customer Service

Automation can help businesses gain a deeper understanding of their customers’ purchasing behavior. This intelligence can guide strategies for inventory forecasting, communication, and other growth initiatives, all geared towards improving the customer experience.

Competitiveness

Without process efficiency, businesses risk being left behind in the fast-paced world of e-commerce. By leveraging data-driven insights, 3PLs can differentiate themselves from competitors by offering more efficient, cost-effective, and responsive services.

SCI’s Intelligent Automation Solutions

SCI’s tagline ‘we’ll make you even better’ embodies our continuous improvement focus. The combination of our progressive technologies including tools, integrations and automation enable you to mitigate risks, maximize production capacity, increase productivity, and optimize operations to save on your bottom line.

From seamless integrations with our API catalog, operational efficiencies with our automations, through to our award-winning Business Intelligence Tool for end-to-end visibility; we give you the competitive advantage to grow and keep steps ahead of consumer expectations. We are also proud to provide a ready-to-deploy suite of integrated industry-leading solutions such as collaborative robots, box-on-demand, goods-to-person, and automated sortation.

SCI is committed to continue investing in automation solutions to help reduce carbon footprint, support our employees, and share the benefits of smart task completion.

Conclusion

In today’s competitive e-commerce landscape, businesses need to leverage every tool at their disposal to stay ahead. Technology-enabled 3PL providers, with their advanced automation capabilities, offer a powerful solution for businesses seeking to streamline their e-commerce fulfillment operations. By embracing automation, businesses can enjoy enhanced efficiency, cost savings, reduced errors, and improved customer service, all of which contribute to a more robust and competitive business model.

Contact SCI’s team today to discover how our technology forward approach to logistics, fulfillment, and transportation can revolutionize your supply chain and change the pace of how you do business.

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SCI Awards of Excellence Winners 2022

Every year SCI holds awards to recognize our employees for their contributions to SCI’s continuous improvement program. This program encourages employees to implement initiatives that benefit the company and our clients such as reducing waste, improving safety, fostering a better work environment, or enhancing customer experience. From finding new ways to improving performance, sharing expertise, and developing talent, we had over 1,600 ideas, submissions, and projects in 2021. We’re proud of our employees for their engagement and dedication to operational excellence.

Congratulations to the winners of this year’s SCI Awards:

Casey receiving award of excellence

Casey (left) receiving award

1st Place: Casey

Casey led a project that redesigned the pick and pack process for one of SCI’s clients. The project improved picking accuracy, productivity, efficiency, and streamlined the shipping process. The project has now been implemented at multiple locations across Canada. This is a great example of how a focus on continuous improvement and operational excellence initiatives can make a huge difference for our organization and our clients.

2nd Place: Heritage Road Facility

This location’s project provided a solution that enables the facility to induct oddly sized items into their conveyor line. The project increased process efficiency and productivity and is a great illustration of embracing our culture values of ‘operational excellence’ and ‘achieving together’.

3rd Place: Longueuil Quebec Facility

This location’s project improved their waving and picking process. As a result of their work, picking density was improved, and travel time was reduced. Improvement’s such as this are a great example of how SCI is constantly striving to make us, and our clients, even better.

Congratulations to all our winners!

You can see last years winners HERE 

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At SCI Our People Make Us, and Our Clients, Even Better

At SCI, we’ve been putting people first for over 30 years. Our 3,000+ employees are the reason why we are Canada’s leading business to consumer supply chain partner.

We make our clients even better by working as an extension of their organization to successfully fulfill their promises to their customers.

Watch the full video below to see how we empower our employees to shape our award-winning culture, whether by sending a recognition kudos card, celebrating each other’s culture through employee driven engagement activities, or submitting ideas for continuous improvement.

Our employees show up every day exemplifying our culture pillars of:

  • Building trust
  • Embracing change
  • Achieving goals, together

In this video you’ll hear directly from employees about SCI’s collaborative spirit that helps us achieve amazing results for our clients, as well as the opportunities given to our employees to learn and grow.

At SCI you’ll be seen and heard, develop as an individual, and make an impact. We’ll let you shine. Work with us and we’ll make you even better!

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SCI Named One of Canada’s Most Admired Corporate Cultures

Canada's Most Admired Corporate Cultures ImageSCI is proud to share that we have been named one of Canada’s Most Admired Corporate Cultures for 2021 by Waterstone Human Capital. This national program, now in its 18th year, recognizes best-in-class Canadian organizations for having cultures that have helped them enhance performance and sustain a competitive advantage.

SCI’s culture journey started in 2017, when we established a set of shared values and behaviours that would unite employees under a common purpose. Since then, SCI has done some incredible work defining its culture and imbedding these pillars and guiding principles throughout the organization.

A key driver behind this has been SCI’s people. They continue to bring SCI’s desired culture to life by embracing change, building trust, and achieving together.

“Winning this award would not have been possible without our employee’s dedication, hard work, and commitment to culture,” states Chris Galindo, President and CEO of SCI. “I sincerely thank everyone for coming to work each and every day with the goal of making SCI even better.”

Being honoured with this prestigious award was based on a rigid set of criteria and a lengthy review process by a Board of Governors comprised of CEOs and Senior HR Leaders from across Canada. Specifically, SCI was recognized for successfully making significant investments to help shift culture and support the change with proven results. This included a strong overall commitment to a 4-year culture transformation to become a people centric organization, successfully modelled throughout business operations. In addition, SCI built robust programs in people development and talent management; and focused on developing DEI and ESG initiatives with substantial employee involvement.

SCI is thrilled to receive this recognition and we will continue to make culture a priority in the organization.

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Top Six Supply Chain Challenges Solved

In an era defined by uncertainty, it can be harder than ever for supply chain teams to operate efficiently, let alone capture competitive advantages. In addition to facing down changing regulations, trade disputes, climate change and labour unrest, leaders need to take a more holistic, strategic view of the supply chain. This means supply chain strategies must closely align with the overarching goals of an organization, as well as with the more specific priorities of the procurement, sales, marketing, manufacturing, customer service, and product management teams.

This e-book examines six key challenges facing supply chain leaders today and provides ways an expert 3PL partner can help organizations approach these challenges with end-to-end solutions to become more strategic and resilient. The six challenges covered are:

  1. Empowered consumers
  2. Market and social volatility
  3. Talent shortages
  4. Growing complexity
  5. The need for analytics
  6. The need for digital maturity

Download the e-book now to learn more about each challenge to assist in your planning.

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SCI Awards of Excellence Winners 2021

Every year SCI holds awards to recognize our employees for their contributions to SCI’s continuous improvement program. This program encourages employees to implement initiatives that benefit the company and our clients such as reducing waste, improving safety, fostering a better work environment, or enhancing customer experience.

From finding new ways to improving performance, sharing expertise, and developing talent, we had over 1,600 ideas, submissions, and projects in 2020. We’re proud of our employees and their dedication to operational excellence.

Congratulations to the winners of this year’s SCI Awards:

 

1st Place: Dalal Yousef

Dalal redesigned the space and workflow for one of SCI’s clients, improving the accuracy, productivity, and efficiency for the outbound operations.  This is a wonderful example of how a focus on continuous improvement and operational excellence initiatives can make a huge difference for our organization and our clients.

 

2nd Place: Mohsin Mogra

Mohsin developed a new process at our Vipond facility that decreased waste, increased efficiency, and reduced costs. This is a great illustration of embracing our culture values of ‘operational excellence’ and ‘achieving together’.

 

 

3rd Place: Ron Stortini

Ron received this award for his incredible work automating operations for one of our retail clients. He not only sourced technology that delivered immediate safety improvements, improved productivity and significant time efficiencies, but kept up with our client’s ambitious long term growth plan.  Ron’s leadership with our clients exemplifies our ‘achieve together’ cultural value.

 

Congratulations to all our winners. You make SCI and our clients even better!

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