Unilever’s collaboration with a Warehouse Collaboration System (WCS) didn’t just help them manage logistics across multiple countries, it resulted in a 10% drop in transport costs and a 5% reduction in inventory holdings.
This outcome highlights the tangible benefits of integrating a WCS into supply chain management, particularly for companies with multi-layered operations.
As supply chains become more complex, more businesses are adopting WCS to simplify operations and manage multiple logistics partners under one system.
A warehouse collaboration system takes over the entire supply chain process, acting as a single point of contact to manage multiple logistics partners.
It is now becoming clear that a WCS offers a valuable solution for improving the performance of supply chain.
Curious about the impact a WCS could have on your supply chain? You’re in the right place!
What is a Warehouse Collaboration System?
A warehouse collaboration system, also known as WCS, is a logistics model where a company fully outsources its supply chain management to an external provider.
In this setup, the WCS takes charge of all aspects of the supply chain, including transportation, warehousing, and inventory management.
This means the business can focus on its main operations while the WCS handles the logistics.
In many cases, warehouse collaboration systems don’t actually own or lease their own assets. Instead, they manage and coordinate transportation, warehousing, and shipping by partnering with other logistics providers.
They often collaborate with 3PLs and other vendors to help streamline and improve their customers’ supply chains.
Moving forward, we will explore the WCS meaning in more detail and see how this can simplify your warehouse operations.
So, if you’ve been wondering “what is WCS” and how it works, keep reading to find out!
How Does a Warehouse Collaboration System Work?
A warehouse collaboration system involves more than just managing supply chains; it integrates and coordinates all logistics activities under one provider.
Now we will discuss how WCS operates, from overseeing multiple third-party logistics providers to optimizing transportation, warehousing, and inventory management.
1. Coordination Role
A WCS oversees the entire supply chain, managing logistics without owning assets like trucks or warehouses.
2. Vendor Management
They select and manage different logistics providers, including 3PLs, to handle transportation and warehousing.
3. End-to-End Solutions
A WCS provides complete supply chain management, from procurement to distribution.
4. Technology Integration
They use advanced systems to track, monitor, and optimize the supply chain in real time.
5. Single Point of Contact
The warehouse collaboration system serves as the customer’s main contact, simplifying communication by managing all logistics partners.
Key Reasons to Choose a Warehouse Collaboration System
If you’re looking to simplify your supply chain and boost efficiency, WCS could be the solution you need.
By handling everything from transportation to warehousing, WCS takes the hassle out of managing multiple vendors and logistics partners.
Here are some key reasons why opting for WCS can make a big difference for your business.
1. Easier Expansion into New Territories
When your current warehouse space can no longer handle growing demand, or you’re turning away potential customers due to space limitations, expanding into new regions becomes crucial.
However, rising costs in high-density areas, coupled with the complexities of setting up and managing new facilities, can make expansion difficult.
Competing with larger 3PLs that have more capital, and experience can add to the challenge, making growth seem out of reach for many smaller providers.
2. Leveraging Existing Infrastructure
A warehouse collaboration system allows you to leverage existing warehouses, transportation networks, and logistical processes without needing to build or lease new facilities.
This provides a cost-effective way to expand your service offering, helping you scale your operations quickly while catering to new markets.
By partnering with a WCS, you can access an already-established infrastructure, saving both time and money, and focus on delivering value to your clients.
3. Faster Delivery for D2C Orders
One of the key reasons 3PLs look to expand geographically is to get closer to major carrier hubs, allowing them to offer faster shipping to customers.
By positioning warehouses within a carrier’s “2-day ground” zone, a WCS enables D2C companies to meet the ever-growing demand for quick deliveries.
This positioning improves customer satisfaction and increases the chances of repeat business, as customers are more likely to shop from companies that offer faster shipping times.
4. Reduced Shipping Costs
In March 2023, the cost of shipping a 40ft container was about $3,162, which was nearly double the price from the previous year.
The highest point came in January 2024, when the cost peaked at around $3,964 for the same container size.
Shortening the distance between your warehouses and the end consumer directly impacts shipping costs.
The closer the warehouse is to the consumer, the lower the cost per shipment.
For example, shipping a package across the country might cost $10, while shipping within the same region could cost $7.
These savings can add significantly over time, allowing you to offer more competitive rates to your customers and improve your profit margins.
5. Improved Competitive Advantage for Customers
Think of being able to offer your customers faster deliveries at a lower cost, all while giving them a competitive edge in the market. Sounds like a game-changer, right?
With reduced shipping costs, your customers can pass on these savings to their consumers, offering more competitive pricing in an increasingly crowded online marketplace.
As buyers compare prices from different retailers within minutes, having a pricing edge can make a huge difference.
By working with a WCS, your clients can offer lower shipping costs, faster delivery, and ultimately a better shopping experience, helping them stand out among competitors and build customer loyalty.
Is a WCS the Right Choice for Me?
This is an important question, and while there are many resources online that explore the pros and cons of the WCS model, based on our experience, there are some specific situations where a WCS can be particularly beneficial.
Here are a few scenarios we’ve seen where it’s been a great fit:
- Single location 3PLs wanting to grow their reach and expand their operational capabilities.
- 3PLs seeking to streamline operations and create a more cost-effective logistics structure.
- 3PLs aiming to attract a broader range of customers by offering services beyond what their current infrastructure can support.
- Logistics companies needing to provide complete visibility and order management across multiple facilities.
Expand Your Brand’s Reach with Teamship’s WCS
Managing logistics can get complicated as your business grows, especially when dealing with multiple 3PL providers.
That’s where Teamship’s WCS comes in, helping you simplify and scale your operations without the headaches.
Here’s how Teamship makes it possible:
1. Lead Management and Project Bidding
With Teamship, you’re in control.
Instead of relying on externally generated leads, you can manage your own and use our system to bid on any project throughout North America, where our extensive coverage has you covered.
2. Centralized Warehouse Management
No need to juggle different systems anymore. Teamship lets you manage all your warehouses through one centralized platform.
3. Extensive 3PL Network
With Teamship, you’re instantly connected to a network of over 1,500+ 3PL partners.
This means more options for warehousing, fulfillment, and logistics support—right when and where you need it.
4. Pick and Pack Fulfillment
Speed up your fulfillment process with our reliable pick and pack services, designed to handle orders efficiently and accurately.
Curious to learn more? Reach out to schedule a demo and see how Teamship can simplify your logistics.
Final Thoughts
In today’s fast-paced logistics environment, connecting your brand to the right partners can make all the difference in how smoothly your operations run.
By using a WCS, you can simplify your supply chain, improve efficiency, and enhance customer satisfaction without the complexity of managing multiple providers or investing in your own assets.
With the right tools in place, you’ll be better equipped to handle growth, reduce costs, and stay competitive in an ever-changing market.
Frequently Asked Questions
1. What’s the difference between 3PL and warehouse collaboration system?
The main difference is that a warehouse collaborations system oversees the entire supply chain, while a 3PL focuses specifically on logistics services like transportation and warehousing.
A WCS takes on a broader role, managing everything from sourcing and production to delivery, while a 3PL usually handles just the logistics part of the process.
2. Does Amazon use 4PL?
Amazon has evolved beyond traditional logistics, now offering a fully integrated system that covers warehousing, distribution, fulfillment, and global logistics.
By managing all these elements, Amazon operates as a 4PL, providing merchants with a complete end-to-end supply chain service.
3. Is a warehouse collaboration system a broker?
Yes, in a sense. WCS acts as a logistics coordinator, outsourcing and managing different aspects of the supply chain.
Think of it like this: a WCS doesn’t pack or deliver the goods itself, but instead oversees the entire process, often hiring 3PLs to handle the physical tasks like packaging and transportation.