Why 3PL Companies must align with client’s ERP data for smoother operations in 2020?
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3PL companies: Collaborating with Technology
Third-Party Logistics provider (3PL or TPP) companies are independent experts who manage end-to-end 
logistics for companies who do not have their own warehouse and distribution facilities.
With the trend of outsourcing thriving in recent years, more and more companies are opting for 3PL services 
to add value to their supply chain without investing in necessary infrastructure. To address the growing 
demand 3PL firms have found value in aligning their systems with clients’ ERP to achieve efficiency in 
managing their supply chains and deliverability.
“Many 3PLs are responding with 
increased capabilities and greater 
technological expectations, something 
essential to the 3PL’s survival,” says Joe 
Carlier, Senior Vice-President of Sales at 
Penske Logistics. “Consumer behaviors 
have changed rapidly over the last 
several years, increasing the overall 
collective service levels within the 
industry. It is impossible to meet those 
demands without the proper technology 
on the front-end to execute. And those 
that are not investing just won’t be 
around.”
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Gone are the days when 3PL companies used to work remotely focusing only on shipping or warehousing 
giving no or less importance to data. There has been a paradigm shift as third-party logistics companies are 
embracing a wide range of services and technology enablers to meet customer expectations.
According to 2019, 23rd Third-party Logistics Study, customers are concerned about the technological 
capabilities of their 3PL partners. Emerging technologies like Blockchain, Automation, and Data-driven 
analytics are key trends in this sector.
Why is alignment with clients’ ERP a must?
ERP is driven by data to integrate inter-firm activities and achieve full-fledged coordination with entities 
making supply chains more responsive. In the absence of an exchange of real-time information between the 
3PL provider and the client’s ERP data, chances of errors and delays are higher, leading to gaps in 
performance.  The capacity of a robust warehouse and transportation system with 3PL companies remains 
underutilized if they do not fully integrate with the company’s ERP.
Let’s see the reasons why it is essential to align the two data systems
Handling data with maturity: In order to make supply chains more effective, 3PL companies are 
expected to act on real-time data captured from various sources along the supply chain to offer advantages 
of lower costs to their clients. Disconnected applications that leave data gaps may put client at a 
competitive disadvantage. They may not be able to cope with demand fluctuations in the absence of 
contextual data. On the other hand, a logistic provider also not be able to optimize the routes, thus failing 
to deliver right product to right customer at right time as committed by the client. Automation ensures that 
data flows seamlessly to-and-fro between logistics and client ERP to avoid confusions, handle variable 
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Making supply chains dynamic: A proper alignment ensures agility in logistics. Monitoring and 
controlling becomes easier as third-party logistics provider work faster and smarter to maintain optimal 
inventory levels and respond to variable demand patterns across the client’s demand. The 23rd annual TPL 
study further reveals that technology is touching every aspect of supply chain, and by implementing right 
tech drivers, 3PL providers can deliver optimal solutions for their clients.
Analyzing consumer trends: 3PL companies manage flow of goods and thus generate a massive volume 
of data. Client companies can harness and utilize this data to understand the preferences of consumers and 
predict future trends. Companies can act proactively by adjusting their productions schedules, thus 
achieving operational efficiency internally, while producing on-demand to meet the needs of customers.
Example of 3PL provider performing better with ERP alignment
National Tiles, a market leader in imported tiles and stone flooring in Australia, avails the services of C.H. 
Robinson to handle their international freight business. C.H. Robinson is an American Fortune 500 provider 
of multimodal transportation services and third-party logistics company.
C.H.Robinson uses National Tiles ERP for effective planning and procurement. They find that the client’s ERP 
can be leveraged to create one source of truth, automate certain functions and obtain visibility to products 
while aligning with C.H. Robinson’s network and cross-docking to support commercial orders. Further, with 
right information, inventory management, product delivery, and positioning can be improved manifolds.C.H. 
Robinson’s tailored technology solutions based on ERP used by National Tiles required setting up Advanced 
Shipping Notices (ASNs) delivered via EDI and integrating detailed shipment information from C.H. 
Robinson’s technology platform into ERP. As a result of this, National Tiles remains updated on the status of 
their shipments without requiring manual keying-in of shipment files and orders with the help of ASN.
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National Tiles has reported a 92% increase in shipment creation efficiency and also forecasting accuracy 
has improved. The seamless system integration between client and 3PL company ensures full visibility from 
order placement to shipment and arrival of freight.
How integration of ERP data is a win-win solution
Third-party logistics companies are recognizing the importance of bridging the technology gaps; not only 
internally within their systems but also externally between their clients and their delivery partners. The tech 
partnership between 3PL companies and their clients will continue to evolve as both parties take advantage 
of higher data availability and enhanced ability to make decisions in real time. Further, 3PL firms can pass 
the cost benefits accrued by implementation of technology to their clients in terms of lower service charges. 
The tighter integration and collaboration through tech alignment leads to sustainable and long-term 
relationships between parties. Both 3PL companies as well as clients become more responsive, accurate, 
and deliver superior customer service when ERP of client companies is synchronized with 3PL’s 
technological capabilities.
Conclusion
Creating a bridge between client’s ERP and 3PL companies is necessary for enhanced customer experience 
for client and 3PL provider, the customer being the client for 3PL provider and the end-user for client.
No more need to function in data silos; collaborate with Katalyst Technologies to achieve seamless 
integration across your business supply chain.
Also, stay tuned to know the latest technologies that 3PL providers need to have in 2020 to ace their 
competition.
Katalyst Technologies is a leading IT services and solutions company servicing clients in the manufacturing, 
wholesale distribution, life sciences, e-commerce, logistics, and retail sectors. We provide industry – specific 
IT products, strategies and solutions for companies implementing large-scale and transformational projects. 
Our business and technology experts are highly-skilled and work seamlessly across multiple geographies, 
with a global footprint in the U.S, U.K, India, and Germany. We specialize in the areas of Digital & e – 
Commerce, Enterprise Resource Planning, Supply Chain Management, Engineering and Manufacturing, 
Professional Services and e – Publishing.
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