Third-Party Logistics (3PL) Operations Managed with D365 SCM

Third-party logistics (3PL) has become increasingly critical for manufacturers, distributors, and retailers who want to outsource warehousing, fulfillment, and logistics — avoiding the cost and complexity of running their own warehouses. But for 3PL providers to scale profitably and efficiently, they need more than basic warehouse management. They need integrated systems that handle warehouse management, billing, client-specific contracts, inventory traceability, and real-time financial integration.

That’s where a modern ERP + SCM platform comes in. An ERP with embedded supply-chain and warehouse capabilities offers a connected experience: warehousing, logistics, fulfillment, finance, and billing all integrated under one roof — enabling supply-chain visibility, reduced manual work, and sharper control. 

Using D365 SCM (or its related modules) for 3PL helps convert a warehouse from just a storage location into a full-service logistics hub — supporting inbound, storage, fulfillment, billing, and reporting.

How Dynamics 365 SCM Supports Warehouse Operations & 3PL Needs

Integrated Warehouse Management

• The Warehouse Management capabilities in Dynamics 365 Supply Chain Management cover the full range of warehouse operations: receiving, put away, picking (wave, batch, cluster), packing, quality control, cycle counting, mobile workflows, and more.
   
• Because D365 SCM ties warehouse transactions directly to the broader ERP: as items are received, picked, shipped — inventory levels, financial entries, cost-of-goods-sold, and stock status update in real time. This eliminates data silos between logistics and finance.
   
• For multi-warehouse and multi-site operations (common in 3PL), D365 SCM supports coordination across locations, giving visibility and control across the network.

Benefits for 3PL providers

• Real-time visibility and traceability — important when handling goods for multiple clients.
   
• Reduced errors via barcode/mobile workflows — fewer mis-picks, mis-shipments, or inventory mismatches.
   
• Higher throughput: optimized picking, packing, replenishment and shipping improve warehouse operational efficiency.

Billing, Contracts and 3PL-Specific Automation

A warehouse is only half the story for a 3PL — billing clients correctly, managing multiple clients/brands, and doing so at scale is equally crucial. That’s where an add-on like Avantiico 3PL Automation Cloud (built on D365 SCM / D365 Finance) adds major value.

What 3PL Automation Cloud brings

• Centralized contract and client management: Onboard new clients quickly, define customer-specific contracts, and manage a variety of charge types: storage (by peak/average usage, volume, storage type), receiving, cycle counting, special handling, packaging/labeling, and shipping charges.
   
• Automated billing engine: Billable activities — triggered by warehouse events (receipts, shipments), storage usage, or periodic schedule — are automatically collected and converted into sales orders and invoices in D365 Finance. This supports processing millions of transactions per billing cycle with minimal manual intervention.
   
• Flexible fee structures and revenue capture: The system supports complex billing models used by 3PLs — fees by weight, volume, storage time, handling events, special services (kitting, packing), and even client-specific purchases (e.g. packaging materials, safety gear, documentation). This helps 3PL companies capture all billable activities and avoid revenue leakage.
   
• Brand-level invoicing and multi-client support: For clients handling multiple brands or product lines, invoices can be segregated by brand, facilitating better cost tracking, reporting, and reconciliation per brand.
   
• Freight reconciliation and billing transparency: Advanced freight reconciliation (carrier invoices vs. 3PL recorded data vs. customer billing) helps reconcile charges, bill accurately, flag discrepancies, and maintain transparent, trust-based client relationships.
   
• Scalability & multi-warehouse support: The solution scales to support many warehouses (from a handful to hundreds), multiple clients, and high volume transactions — enabling 3PL providers to grow without redoing their systems.

Why D365 SCM + 3PL Automation Cloud Is a Strong Fit for Modern 3PL Providers

Combining D365 SCM’s robust warehouse management and inventory + financial integration with a 3PL-specific billing/contract module bridges the gap between logistics operations and client billing/finance — solving a core challenge many 3PL providers face: managing complex, multi-client warehouse operations while capturing every possible revenue stream and avoiding manual billing headaches.

Additionally:

• With everything under the same ERP umbrella, data flows seamlessly across warehouse, inventory, finance, and billing — eliminating duplicate data entry, reducing errors, and improving traceability.
   
• Flexibility: The model supports clients of different size and complexity — from small distributors to large enterprises generating millions of transactions.
   
• Transparency: With brand-level invoicing, detailed billable-activity tracking, and freight reconciliation, clients receive clarity — improving trust and customer satisfaction.
   
• Scalability: As a 3PL provider expands (more warehouses, more clients, more SKUs), the system scales without forcing major re-architecture.

This makes D365 SCM (with the right 3PL add-on) an ideal backbone for professional, high-volume 3PL operations.

Using This in Practice — What to Watch Out For / Best-Practice Steps

If you are a 3PL provider (or wish to become one) and plan to use D365 SCM + 3PL automation:

1. Define clear customer contracts up front: Since billing depends on contract terms (storage rates, handling fees, periodic billing cycles, special services) — ensure that you capture all expected services.
   
    
2. Leverage WMS integration fully: Use barcode scanning, mobile workflows, cycle counting, and other warehouse-management features to record actual warehouse events — only then can billing automation be accurate.
   
    
3. Maintain granular billable-activity tracking: For maximum revenue capture — track every event: receiving, storage, shipment, handling, special services, prelifts, kitting, etc.
   
    
4. Use brand-level/ client-level segmentation if needed: For clients with multiple brands or multiple contracts — separating invoices per brand helps accurate cost/revenue attribution and better reporting.
   
    
5. Plan for growth & scalability ahead: Ensure your configuration supports multi-warehouse, multi-entity, multiple clients — to avoid system rework as you scale.

The Role of ERP Implementation & Support — And How a Partner Can Help

A successful 3PL deployment with D365 SCM requires not just software license — but effective implementation, configuration, and ongoing support. That’s why working with experienced consultants and specialists matters. A trusted Microsoft Partner with 3PL experience can help map your contract-billing models, configure WMS + billing automation, set up mobile workflows, integrate external systems if needed, and ensure scalability for future growth.

If you’re considering such a setup, you might reach out to firms like Dynamics Square — who, as part of their ERP Implementation and Support services, can help implement, configure and support 3PL-enabled Dynamics 365 SCM environments.

Conclusion

Third-Party Logistics (3PL) providers operate in a complex environment — multi-client warehousing, contract-based billing, variable services, and high-volume transactions. Using a robust ERP + SCM system like Dynamics 365 Supply Chain Management — complemented by a 3PL-specific automation solution — transforms a warehouse into a full-service logistics and fulfillment hub.

This unified setup delivers operational efficiency, billing accuracy, financial integration, traceability, and scalability — enabling 3PL providers to maximize revenue, reduce manual effort, and deliver reliable services to clients.

If your organization is exploring a 3PL model or looking to upgrade existing operations, considering a Dynamics-based solution (with the right partner) is a smart move. For assistance or a tailored walk-through of how such implementation works, feel free to drop a line — many experienced Microsoft Partners (including Dynamics Square) offer demo and consultation services.