3PL inbound workers inducting books

3PL (Third-Party Logistics) – Part 1

Managing the inventory of one of the largest online textbook retailers.

Introduction

Initially, discussion around the possibility of starting a 3PL (third-party logistics) business within Nebraska Book Company was with a small company. They had around 50,000 books in their inventory. While early discovery work was happening with this company, the opportunity came forward to work with a much bigger client.

Eventually, terms were struck and we had a partnership with one of the largest online textbook rental providers, outside of Amazon – well over a million units of inventory.

While we were very familiar with managing our own textbook inventory – managing someone else’s was an entirely new ballgame and line of business for us.

My role with this project covers a lot of areas, and has evolved over time. I manage and prioritize work for both our internal and WMS (warehouse management system) development teams. I lead discovery work with stakeholders for new development requests and processes. I conduct independent research, write requirements, and design new enhancements. Finally, I build test plans, test development changes, and manage the implementation. This project is still on-going and remains my primary focus at this time.

Project Cycles

There were two main cycles, or phases, to the start of this project.

The first was to induct (receive) student return units at our distribution center, instead of them being returned to the previous ones. Additionally, there were bulk transfers of units to be inducted that were being held at the previous distribution centers.

The second was to receive and fulfill the first round of student orders with inventory from our distribution center (DC).

I’ll go into each of these initial cycles in more detail in a moment. Currently, we are now in a normal cycle of:

  1. Receiving and fulfilling student orders (outbound from our DC)
  2. Inducting student returns (inbound to our DC)
  3. Rinse and repeat

Initial Cycles

After the agreement was formed, design and development of the induction (receiving) and put-away processes began in earnest. We had a very short timeline to build this new system, so it was ready in time to receive student return shipments.

While these are normal processes for our own inventory and business, managing the logistics for our partner had some additional requirements:

  • Much more inventory than we’re used to – required increased staffing, more efficient processes, and additional storage areas.
  • Serialized inventory – each unit of our partner’s inventory has a unique serial number. None of our existing systems or processes were designed for this type of inventory.
  • New integrations – new APIs had to be created between our WMS, our systems, and our partner – so they had an accurate, real-time view into their inventory.
3PL inbound process map
3PL inbound process map
3PL put-away process map
3PL put-away process map
A sea of boxes of student returns
A sea of boxes of student returns

As you can see, there was a veritable sea of boxes, waiting to be received into inventory. The development and testing process was rapid – we had to get the books out of those boxes and off of the floor!

After a few weeks of supporting the induction and put-away processes, we quickly got to work designing and developing the picking and outbound processes (to fulfill new student orders).

3PL orders and outbound system architecture diagram
3PL orders and outbound system architecture
3PL picking process map
3PL picking process map
3PL outbound process map
3PL outbound process map
Workers picking orders
Workers picking orders
Picked books ready to get packed and shipped out
Picked books ready to get packed and shipped out
Outbound packing stations
Outbound packing stations

Once again we had another short timeline for development, testing, and implementation for the order fulfillment and outbound processes. We were able to implement on time, and focused on supporting these processes for the next few weeks.

Challenges

There have been many challenges to overcome with this project, but I’ll touch on the big ones.

We had extremely narrow deadlines for the initial project cycles of inbound and outbound, especially for a project of this magnitude. This caused some short-term thinking in terms of design, and only allowed for minimal testing.

Moving this many books required a huge increase in hiring of temporary DC labor. Compounding that problem was keeping workers safe during the COVID-19 pandemic.

There were also some issues of burnout on the project team. Some team members decided to move on before additional staff could be brought in to bolster support.

With the extremely short timelines, this inevitably caused system integration and support issues, requiring many “manual fixes.” The extra effort required was significant, and narrowed future development windows even more.

Results

We made our deadlines. 😅

We did pay a heavy price with rushing development and testing. A lot of work has since been put in to fix bugs, shore up processes, and provide extra validation of data between systems. There has been a massive improvement in data accuracy and reliability between the initial project cycles, and the second ones.

We still have a long ways to go, but we are getting better. Time will tell.

For the next chapter in this story, check out 3PL – Part 2

Brian Hoops
Brian Hoops

Slow thinker.

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