Inbound and Outbound Logistics: What is The Difference?

Inbound and Outbound Logistics: What is the Difference?

Inbound and Outbound Logistics: What is The Difference?

Logistics operation is the spine of all businesses (start-up, small or big) that offers physical goods to their customers. Most of us have heard the terms ‘inbound’ and ‘outbound’ but don’t know what is the role and importance of these two.

‘Inbound’ and ‘outbound’ refer to different terminology in different fields but in the logistics world, they come down to the difference between receiving and sending. All businesses which deal with physical goods need both inbound and outbound logistics processes, whether they manage it directly themselves or not.

Here in this article, we interpret a bigger perspective on inbound and outbound coordination’s tasks.

Inbound and Outbound Logistics: What is the Difference?

Logistics operation is the spine of all businesses (start-up, small or big) that offers physical goods to their customers. Most of us have heard the terms ‘inbound’ and ‘outbound’ but don’t know what is the role and importance of these two.

‘Inbound’ and ‘outbound’ refer to different terminology in different fields but in the logistics world, they come down to the difference between receiving and sending. All businesses which deal with physical goods need both inbound and outbound logistics processes, whether they manage it directly themselves or not.

Here in this article, we interpret a bigger perspective on inbound and outbound coordination’s tasks.

Introduction to Inbound and Outbound Logistics

Inbound and outbound logistics allude to two of the most widely recognized processes which are utilized to move products all through the supply chain. Both appear to be the same in nature and include the transportation of goods across different distribution channels, but the key difference is that inbound logistics deals with supply and outbound logistics fulfill demand.

Inbound Logistics

Inbound, the word itself refers to that it is related to incoming goods from a point. Inbound logistics mention the transportation, storage, and delivery of products to your business, etc. from suppliers to the manufacturing facilities. For instance, in a manufacturing organization, the production unit buys raw materials or components from its suppliers for the production of different merchandise. Essentially, it includes everything your business operations require to create the final products that you ultimately sell. We can say that the process of bringing purchased goods into the company is known as inbound logistics.

Outbound Logistics

Outbound, refers to the outgoing of your goods into the market or to your customers. Outbound logistics measures are identified with the development of end results to the clients or end consumer, by and large starting in a distribution or fulfillment center and afterward conveyed to its final destination.

Outbound logistics, many times, need to collaborate with distribution and delivery service providers who have a vast and fast distribution network and defined delivery processes. Having the perfect measure of finished products fit to be conveyed in the market is significant alongside a characterized distribution network; since outbound logistics is administered by various factors like consumer demands, a seasonal spike in sales, order volumes (especially in the case of e-commerce businesses), and more.

Since your finished goods require assembling, special packaging, handling, and delivery requirements, it is most important to streamline the outbound logistics. In some situations of e-commerce businesses, outbound logistics are also liable for having a positive and magnificent impression on your clients.

Hence we can say that inbound and outbound logistics are important for a smooth and optimized logistics process.

Also read: How Supply Chain Logistics Can Enhance With Vehicle Tracking

Processes Involved in Inbound Logistics

  • Procurement of Goods: The catalog of raw materials or goods needs to be sourced from different locations. Secondly, the businesses require to order and get these products shipped to the warehousing and storage facility. Hence products shipment from the manufacturer or supplier on time and through an appropriate freight shipping channel is most important.
  • Receiving of Goods: When the manufacturer or supplier receives the order, they send the goods to warehousing, where this inventory is received, logged into the system, and reported. Another step that most of the e-commerce fulfillment centers follow here is the Quality and Quantity check. This inventory movement inside the warehouse facility can be easily tracked by the logistics or supply chain manager through a Warehouse Management System (WMS). The WMS framework tracks the development of the stock and helps the process toward recording and reporting giving the stakeholders a view on their inventory stored.
  • Labelling: Once goods are received, they are labeled for identification and better reporting.
  • Inbound Putaway and Picking: Once all the checks and labeling get complete for goods, they have put away in their dedicated space i.e. in racks, floors, or shelves, and logged in the system. And when required to be sent for the next process, these are picked up for the next step in the logistics operations.
  • Reverse Logistics: Reverse logistics is also an integral part of inbound logistics operations. If customer requests for return or exchange, goods are brought back to the warehouse, quality checked, logged into the inventory tracker, labeled, and put away.

Processes Involved in Outbound Logistics

  • Order Processing: At the point when a request gets gotten for the completed items to be moved out, it is signed in the stock tracker or WMS, and added to the handling orders line.
  • Picking and Packing of Products: After receiving the order, goods are picked from their assigned shelves or racks, checked for quantity, and then packed as per the packaging requirements. After packing, the completed items are arranged according to the conveyance seller or transporter, so they are fit to be dispatched.
  • Shipping or distribution: If required, Airway bills are generated and printed above the products and then handed over to the carriers or distributors for the last leg of product distribution in the market. In e-commerce distribution cases, the products are assembled into one package, AWB gets generated, and then handed over to the last-mile carrier.

Difference Between Inbound And Outbound Logistics: Tabular Form

Comparison Factor Inbound Logistics Outbound Logistics
Definition The influx of raw material and goods from suppliers to the manufacturing plant or unit is referred to as inbound logistics. The outward movement of final goods from the company or production house to the end-user is referred to as outbound logistics.
Involvement It involves interaction between the supplier and the firm. It involves interaction between the firm and customers.
Focus Inbound logistics focus on the usage of raw materials and resources within the manufacturing or assembly unit. Outbound logistics focuses on the outflow of final goods or products from the firm to the end-users/customers.
Process Inbound logistics involves processes like sourcing, warehouse receiving, and material management. The process involved in outbound logistics is to ship orders to end-users.

Bottom Line

Inbound and outbound logistics operations play an important role in the entire logistics and supply chain system. If product availability gets disturbed in the warehouse, a company may face delays in making their products available on time in the market.

Similarly, if the raw material or unfinished goods inventory, supply more than the demand in the market, it could lead to increased inbound storage costs. Hence we can say the success and efficiency of the Supply Chain rely on an efficient inbound and outbound logistics network.

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