The terms “inbound” and “outbound” are opposites that apply to so many aspects of everyday life.
- Enter vs. Exit
- Push vs. Pull
- Supply vs. Demand
- In vs. Out
In the logistics world, inbound and outbound are defined as receiving and sending. Any business that deals with a physical good or product must have logistical processes for the sending and receiving of their inventory, whether completed in-house or by a third party.
Expertly assembled logistical processes can have a major impact on the performance and success of a business. To complete the process of sending and receiving goods, both inbound and outbound logistics need to be working in sync.
What Are Inbound And Outbound Logistics?
Inbound and outbound logistics are the two most common processes to move goods in a businesses retail supply chain. They both involve the transportation of goods, the management of distribution channels, and outbound logistics to fulfill potential demand.
Moving raw materials, finished goods, and supplies from the manufacturer to a fulfillment center or retail store are all processes within inbound logistics.
Outbound logistics include the movement and shipping of finished products to the end user. The finished products usually originate from a fulfilment vendor.
What Is The Difference Between Inbound And Outbound Logistics?
Inbound and outbound logistics are differentiated through who is receiving the goods. For example, the inbound logistics of a warehouse would be receiving finished goods from a manufacturer, and the outbound logistics would entail sending those end products to customers.
The table below breaks down the variations between inbound and outbound logistics.
|Receiving raw materials or products from a supplier
|The actions of getting final goods delivered to end users
|Managing and sourcing materials, the warehouse receiving the materials
|Shipping customer orders and customer service operations
|Supplier > Company/3PL
|Company/3PL > Customers
The Inbound And Outbound Logistics Processes
Both inbound and outbound logistics focus on transporting goods within different distribution networks. Having in-depth knowledge of how these processes function is vital to being able to optimize a company’s supply chain, reduce logistical costs, and better serve customers.
Inbound Logistics Processes
- Purchasing Materials
The company sources or buys raw materials and products from their suppliers. Have proper freight shipping tracking to keep track of the orders.
Receiving goods includes their arrival, as well as the receiving team recording the materials’ arrival and storing the materials in the correct inventory storage location. Be sure to have an efficient and understood inventory tracking system.
- Reverse Logistics
Reverse logistics include the process of managing customer returns and exchanges and the shipping needs involved. Returned products need to be examined and restocked when processed.
Outbound Logistics Processes
- Order Processing
Any received orders should be sent to the warehouse management system and entered into a queue for processing.
- Product Picking/Packing
Once an order in the queue is up, the correct items are picked from their location in the inventory, the inventory counts are updated, and products are packaged, labeled, and sorted.
- Shipping Finished Goods
The chosen carrier picks up and delivers the products.
How To Optimize Your Inbound And Outbound Logistics
Here are some ways to optimize all your logistical processes.
1. Building Strong Relationships With Everyone From Suppliers To Carriers
Having strong relationships with partners can reduce lead times, save money, and have more overall favorable terms with logistical partners. Simply increasing your reorder quantities, paying on time, and being respectful can help build a strong, mutual business relationship.
Partnering with a carrier, fulfillment provider, and/or freight partner can lead to volume discounts and expansion opportunities for more trusted partners. Long-term partnerships are often rewarded from growth and commitment.
2. Reduce Inventory Costs
As a business grows, the costs of inventory storage tend to grow along with it. With more needed space in a warehouse comes higher warehousing costs. Being able to match your demand with a steady supply of inventory will keep inventory carrying costs down and increase your inventory turnover rate.
3. Utilize The Right Warehouse Management System
A warehouse management system (WMS) can automate the warehouse management process. Easily track inventory, set specific reorder points, and get a better overview of all inbound and outbound logistical tasks.
4. Partner With A 3PL That Has The Technology To Keep You Updated
Outsourcing your fulfillment to a 3PL supply chain partner such as Product Fulfillment Solutions can help with many inbound and outbound logistics processes. Services such as receiving inventory, warehousing, prepping packages for shipping, and even managing ecommerce returns can all be handled by a third-party logistics provider.
Inbound and outbound logistics determine the efficiency of a company’s supply chain. The process from order to delivery of goods requires many operations to reach the end customer. Ineffective ecommerce logistics processes can cost extra time and money for companies when trying to get their products delivered.
If you are interested in learning how a logistics service provider can turn your supply chain operations into an asset for your business, click here to learn more.
Inbound Vs. Outbound Logistics FAQs
The inbound and outbound logistics involved in running an ecommerce business can be a large system to understand and excel in. Here are some frequently asked questions about inbound and outbound logistics.
What’s The Difference Between Inbound And Outbound Logistics?
Inbound logistics are based around the intake of goods to a business/warehouse. Outbound logistics involves the process of getting those goods to the end customer.
What Is The Meaning Of Inbound And Outbound Logistics?
Inbound and outbound logistics describe the movement of goods through the supply chain. Inbound logistics cover receiving goods and raw materials from supplier(s), and outbound logistics cover the delivery of goods to the end customer.
What Is An Example Of Inbound Logistics?
An example of inbound logistics is when a company receives its inventory from the manufacturer. The inventory is delivered by a truck, unloaded, logged, and placed away in the warehouse and updated in the warehouse management system if one is being used.
What Is Meant By Outbound Logistics?
Outbound logistics are the delivery of finished products to the end customer from either a warehouse or distribution center. It covers picking, packing, shipping, and delivery (also known as the order fulfillment process).
Want a personalized consultation to discover what 3PL solutions can do for your business? Contact PFS today!