Business Central and 3PL

A 3PL (Third Party Logistics) is an external company that manages key logistics and supply chain processes on behalf of another organization.

Companies rely on a 3PL when they do not want to handle these logistics activities internally and to gain the following benefits:

• Reduction of fixed costs
• Greater flexibility and scalability
• Access to specialized logistics expertise
• Focus on core business activities

Efficient use of a 3PL requires automatic integration between the company’s ERP system and the IT systems of the external logistics provider.

The main integration topics typically involve:

• Items master data
• Picking and shipments, with corresponding return data
• Purchase orders and warehouse receipts, with corresponding return data
• Transfer orders, with corresponding return data
• Inventory and stock alignment
• Inventory adjustments

Some typical points of attention include:

• Lot and expiration date management: Depending on the business type, it may be necessary to manage lot and expiration date details within the exchanged data flows.
• Communication methods: Many logistics companies still prefer file-based interfaces using FTP.
• Sales returns management
• Damaged stock and quarantine warehouse management

A typical integrated sales process with a 3PL interface involves:

• Creation of an inventory picking based on a sales order

• The picking is exported from Business Central to the 3PL

• After the warehouse picking and the physical shipment of goods, the return data from the 3PL is imported back into Business Central. The data includes details on the quantities actually shipped, and the number of packages, weight, and lot information.

• Processing the imported data triggers the posting of the sales shipment in Business Central (with the corresponding inventory decrease) and the creation of a temporary sales invoice.

Memento has extensive experience in implementing integrations between Business Central and external logistics systems (3PL).