Logistic activities are an integral part of every manufacturing organization. These activities are part of the day-to-day activities of the organization. Logistic activities can be divided into two categories such as inbound logistics and outbound logistics.
The term inbound logistics is used to refer to the material which is delivered in the manufacturing firm by the suppliers and on the other hand outbound logistic is the movement of final product produced by the firm from the manufacturing house to the final users of the products.
In this article, you will learn about both inbound and outbound logistics in detail along with the key differences between both the logistics.
Table of Contents
What is Inbound Logistic?
Inbound logistics refers to the ordering, procurement, storage and operating of the raw material and other material required for the production of the goods. The raw material is essential for the interruption-free production process. therefore, it can be referred to as the fundamental activity of every manufacturing organization.
Inbound logistics is a kind of Business-to-Business (B2B) activity. Usually, the raw material required for one organization is the final product of another organization. The companies which provide raw material is also referred to as supplier. the supplier supplies raw material of the production of the final product.
The production process of a company heavily depends on the supplies provided by the suppliers. Because of this reason, manufacturing firms don’t rely on one supplier and get raw material delivered from the different suppliers so that their production process doesn’t stop when there is in an interruption of the supplies of one supplier.
The inbound logistics process consists of various phases such as the sourcing, order placement, vendor supplier, transportation, and receiving the raw material. In addition to this, there are various sub-activities which are included in the inbound logistics such as transportation, an inspection of the material, material handling, and stock control, etc.
What is outbound logistic?
Outbound logistics refers to the movement of final products prepared by a company to the final users of the product. outbound logistics is also an important part of the organization. As inbound logistics is important in order to carry out the production process the outbound logistics is important to generate revenue.
The outbound logistics is consist of various activities such as the production of the product, packaging, selecting, organizing and transporting. Usually, there are various people involved in the outbound logistic which play important role in the flow of final product from the organization to the users of the product such as the marketer, whole seller, retailer, and salesperson, etc.
The products move from one party to another in order to finally being consumed by the final user of the product.
The basic outflow of outbound logistics consists of the following steps:
- Order placed by the customer.
- Transmission of the order details to the warehouse.
- Processing of the order.
- Selection of the products to deliver.
- Transportation of goods from the warehouse to the final users.
- At last, the product is delivered to the customer.
The process of the outbound logistics of intangible goods is different than the regular outbound logistics of tangible goods. As a customer is called at the service station in order to provide him or her the access to the intangible goods.
The key differences between Outbound Logistics and Inbound Logistics
| Outbound Logistics | Inbound Logistics |
|---|---|
| Outbound logistic is the movement of final products produced from the company store house to the final user of the product. | Inbound Logistic is the movement of the raw material and parts to produce the final product in a manufacturing firm. |
| The outbound logistic is related to channel of distribution and customer service. | The inbound logistic is related to procurement and material management. |
| The outbound logistic is an interaction between the firm sending out the final products and the users of products. | The inbound logistic is an interaction between the suppliers of the raw material and the manufacturing firm. |
| The main focus of outbound logistic is on the movement of the final products from the manufacturing firm to the users of the product. | The main focus of inbound logistic is on the movement of the raw material and parts required for the manufacturing of final products. |
| Poor outbound logistic might harms the image of the company. | Poor outbound logistic disturbs the production process of the company thus impacts the revenue generation of the company. |
Conclusion
In conclusion, we can say that both inbound and outbound logistics are an important part of every organization. Timely and regular inbound logistics ensures the interrupted production process and the on-time and planned outbound logistics improve the image of the company in the eyes of its customers.
However, it is not wrong to say that both inbound logistics and outbound logistic goes hand in hand. The poor performance of one impacts the performance of another.
