Manufacturers, retailers and distributors use 3PLs to store inventory and ship orders without running every warehouse themselves, a model often called contract warehousing. Some 3PLs also arrange transportation, manage returns or handle value-added work such as kitting and labeling. A company may use several 3PLs across regions or channels, each with its own systems.
EDI with a 3PL keeps your ERP and the 3PL’s warehouse system in step. The main transactions are:
- Warehouse shipping order (EDI 940), which tells the 3PL what to ship.
- Warehouse shipping advice (EDI 945), which confirms what actually shipped.
Inventory positions are often shared as well, for example with an inventory inquiry/advice (EDI 846). When warehouse events arrive late or don’t match the order, customers get wrong ship confirmations, invoices go out with the wrong quantities and inventory drifts out of balance. Linking each 3PL event to its order and shipment is what keeps fulfillment accurate.