The Difference Between Inbound & Outbound Logistics…and Why They Matter
Logistics covers a large portion of supply chain management focused on the efficient flow of products, services, and information from point of origin to consumption. In other words, logistics focuses on getting the right product and quantity to the customer on time and at the right cost.
There are many activities that fall under the umbrella term of logistics, but they can essentially be divided into two processes – inbound and outbound.
Now, what exactly are the differences between inbound and outbound logistics? In the following section, we’ll define each and explain why they are important for an efficient supply chain.
What are Inbound Logistics?
Inbound logistics deals with the movement of goods and raw materials from suppliers to your business. The types of inbound activities vary from business to business. For instance, a manufacturer might focus on the sourcing of materials and purchasing the product. While a distributor will focus on coordinating delivery and storage/inventory control of the product.
What are Outbound Logistics?
In contrast, outbound logistics deals moving the final product into the hands of retailers and customers. Outbound activities also vary from business to business but focus on allocating resources outside of the warehouse. For example, the most common being the order fulfillment process which includes picking, packing, and shipping.
The Differences between Inbound and Outbound Logistics
Inbound and outbound logistics each cover a range of distinct processes. While it may be tricky to distinguish the two, there are a couple to make it easier.
Buying vs. Selling
One way to easily identify the two is by the buying and selling of goods, materials, and resources. Inbound activities focus on buying resources for the production of the final product. This includes resources like materials, supplies, and overhead. On the other hand, outbound activities are focused on selling the final product. For example, order fulfillment for a customer or coordinating delivery to a retailer.
Receiving vs. Shipping:
Another key distinction between the two is in receiving and shipping. Inbound activities are among the first steps of the supply chain and revolve heavily around receiving. This includes efficiently ordering, receiving, and storing materials/resources. In contrast, outbound deals with shipping final products to customers. It’s also important to note outbound activities also include customer service and managing distribution channels.
Why Both Matter and How to Optimize…
Now that we know what inbound and outbound logistics are and the differences between the two, it’s important to know why they are important. In short, they both rely on each other to operate efficiently. It’s important to invest time and resources into both to streamline the processes and maintain an optimized supply chain. One way 3PL providers do this is through the use of technology – like a customer relationship management (CRM) and warehouse management system (WMS).
A CRM improves the 3PL’s ability to collect data across all logistic activities in the supply chain. This data is crucial for strategy, planning, and key decision making for three reasons:
Better Contact Management:
CRM’s provide a central location for all your contacts in your supply chain. This makes it easier to share information with everyone involved.
Improved Logistics Planning:
CRMs provide complete visibility and data of all logistics processes. This makes it easier to plan and schedule your inbound and outbound shipments, ensuring your supply chain is running smoothly.
Real-time Emails and Notifications:
Along with better contact management, CRMs allow for emails and notifications to be sent after key processes the supply chain. This provides clear and consistent information to everyone in the supply chain. This not only helps plan accordingly but also improves your customer service experience as orders can be tracked in real-time.
It’s clear that optimizing both inbound and outbound logistics are critical for an efficient supply chain. However, this may be expensive and time-consuming for businesses that don’t have the resources available. Rather than tackle it yourself, a 3PL can help streamline these processes for a fraction of the cost.
If you’re considering outsourcing your logistics to a 3PL, C2W Distribution can help. We offer both 3PL & 4PL solutions to meet your fulfilment, eCommerce, dropshipping, & storage requirements. By leveraging our state-of-the-art equipment and technology, we’re able to fulfil your business needs while making your supply chain more efficient, reducing costs, and improving customer satisfaction. Leave the logistics to us, while you focus on your core competencies.
Interested in learning more? Contact us today to see what we can do for your supply chain.