Inbound and outbound logistics is one of the activities associated with the supply chain in production activities. Inbound logistics takes care of the input of the supply chain; outbound Logistics takes care of the post-production stage to bring products to consumers.
Inbound Logistics is the first stage in the value chain system of Logistics. It is the process of controlling the source of raw materials or semi-finished products from suppliers before they go into production.
Inbound Logistics includes stages such as purchasing raw materials, handling raw materials, transporting, managing inventory, and storing goods to create favorable conditions for the production apparatus to create finished products.
It is the most crucial stage, directly affecting the following steps to create finished products before bringing them to market. Its input source is guaranteed to help businesses increase revenue and ensure the best quality products. If the input logistics are efficient, it will prevent companies from reducing income, wasting input materials, and raising production costs.
Inbound Logistics Operation Process
Step 1: Sourcing
Enterprises identify and evaluate raw materials from suppliers. Negotiate prices and purchase raw materials.
Step 2: When there is an order, it will deliver materials to the production plan
Businesses always want to source materials in the correct quantity, quality, and time for production. It can suspend a factory if the input material does not meet the quantity, quality, and time.
It besides focuses on purchasing and planning to use raw materials. Inbound Logistics is also responsible for tracking inventory and optimizing the transportation process from the beginning to the end of the goods.
Step 3: The supplier will conduct an electronic declaration of shipment information when transporting raw materials.
Then move the goods to the warehouse of the enterprise. They were loading and unloading staff and inventorying goods to ensure they followed the order. Transfer the goods to the production facility to continue performing production activities.
Step 4: Receive and ship orders from customers (if any) due to errors or problems in delivery or repair.
Outbound Logistics is storing, transporting, and distributing goods to the market. This stage should optimize every step, from location and time to logistics costs.
Enterprises often only focus on production and pay little attention to output logistics activities. Compared to input Logistics, Outbound Logistics plays a significant role. Businesses need to choose an appropriate supply or distribution channel that will help reasonably handle inventory.
Distribution channels include companies, agents, stores, retailers, or end consumers.
Outbound logistics operation process
Step 1: Customer places an order
Step 2: Process the order. Enterprises receive the required quantity and check the inventory source to ensure the customer’s order quantity. If there is enough stock, the order will be processed.
Step 3: Send the customer’s order to the business’s warehouse to pick up the goods and carry out packing. The stocked inventory will move to the primary storage, replacing the product purchased by the customer. This process can trigger product additions or orders of raw materials from suppliers to maintain steady inventory levels.
Step 4: Warehouse staff take the goods and pack them goods. Then proceed to load the goods into the transport vehicle.
Step 5: Deliver the goods to the customer. The company system will record the shipment and send detailed information to the customer for tracking.
Step 6: Make an invoice, and collect payment for the order.
Factors that ensure Outbound Logistics take place smoothly
For the Outbound Logistics process to take place smoothly, the stages and steps must not make mistakes.
Choosing the right distribution channel
The correct distribution channel helps businesses optimize costs and shorten the distance between customers. Companies can use a variety of distribution channels to promote products and sell to consumers quickly. Taking advantage of distribution channels will serve customers best.
Storage and inventory management
Businesses must ensure that they have a system for storing and inventorying goods. If the inventory is too much and not sold out, it can easily lead to damaged and obsolete products. Conversely, if the merchandise is not enough, it will not be able to meet customers’ needs, lose the business’s reputation, and quickly lose customers.
With a system to store and control goods, businesses can grasp the market’s needs. From there, companies can start production and order timely responses to customers.
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