How to simplify your 3PL integration

Complexity of 3PL integration

“Working with a 3PL typically involves seven core EDI transaction types.”

At its core, third-party logistics (3PL) offer services to support specific aspects of shipping operations. It’s the link in the supply chain that brands use to outsource their distribution and fulfillment services. For most manufacturers, 3PL integrations are a tangled web of EDI connections.

We recently wrote an article about the complexity of transportation EDI. Setting up your 3PL integration can be just as time-consuming and costly for most businesses, but it doesn’t have to be.

If your company works with several 3PLs, that typically means custom integration environments that need to be built and maintained. With legacy EDI systems you’re creating point-to-point integrations for all your transaction types, for each 3PL. The trick to simplifying this tangled web is to set up your transactions as efficiently as possible. There’s no need to wait for weeks on end to enable your transactions with your EDI service provider.

Working with a 3PL typically involves seven core EDI transactions types. Here’s a step-by-step breakdown, to help you understand the process flow of these transactions.

What happens within a typical 3PL integration

Suppose you’re a manufacturer taking orders from customers online. Your website will pass orders into your ERP, or system of record, which will then communicate via EDI with your 3PL provider’s system so that the order can be sent to the customer.

The transaction begins when a customer sends you an 850 (purchase order). You will then send a 940 (warehouse shipping order) to your 3PL asking for the order to be fulfilled.

Once your 3PL fulfills the order, they send an 856 (advanced shipping notice) on your behalf to the customer and then communicate back to you via a 945 (warehouse shipment confirmation) that the shipment has left the warehouse. The 945 can include information like the shipment identification, item, quantity, where it’s shipping, the transportation method and shipping service level.

Once you receive the 945, you can invoice your customer with an 810 (invoice), because you have confirmation that the product has been shipped.

This covers most of our diagram, but how do the 943 (warehouse stock transfer shipment advice) and 944 (warehouse stock transfer receipt advice) transactions fit into a 3PL integration?

To meet customer demands, you need to ensure that your 3PL is stocked with your product. You must order directly from your supplier and instruct them to send product to your 3PL, by sending them an 850. In the meantime, you send a 943 to your 3PL to let them know goods are coming into their warehouse and when product is going to be delivered. Once your supplier prepares the shipment, they send the 3PL an 856 to confirm the contents of the shipment. The supplier can then send you an 810 (invoice).

Once your 3PL receives the product from your supplier, it will send you a 944 to notify you that they received the product. The 944 serves as a receipt of your order and includes any adjustments that need to be made to the original 943 due to potentially damaged or missing products.

Orderful simplifies 3PL integrations

These seven transaction types are critical to any 3PL integration. Most companies working with legacy EDI systems have built custom integration environments that are maintained by an in-house team of EDI experts or outsourced to a managed service provider. Regardless, this web of integrations is complicated and expensive to maintain. On top of that, it’s challenging to scale as you continue to grow your business.

By integrating with Orderful, you do not have to build point-to-point integrations. Orderful is a central point of integration for your ERP, or system of record, and your 3PL. Connect once to our platform and tap into an existing network of 3PLs, consolidating all of your EDI vendors into one hub.

Speak with one of our EDI experts to learn more

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