Concept and Understanding of Inbound Logistics
We often see goods that are being transported from one location to another and are made available within the given time. This makes us wonder about the transportation process of the goods, and this is where inbound logistics comes into the picture.
Inbound logistics is concerned with safe handling storage and delivery of the goods to the desired location. Inbound logistics has a great impact on the supply chain, which affects the success of the organization.
It is very crucial about the ability, and the financial burden of the transportation contract as the product moves between the buyer and the seller.
It is also very crucial to keep in mind about the possible damage which vehicle to the product and it should already be clarified between the buyer and the seller as to who will be taking responsibility for the damage.
It is essential that there are a common shipping agreement and terms and conditions mentioned before proceeding with the dispatch of the goods.
This understanding is between the buyer and the seller. The Terms and conditions of the shipping should be well established between the buyer and seller so that this avoids further confusion. This helps in streamlining of the process of Inbound logistics and this, in turn, improves customer experience.
The concept of Inbound Logistics has gained greater importance owing to increase in eCommerce companies who rely on Supply chain.
Importance of inbound logistics
Inbound logistics is a process which can sometimes be handled by the company itself or is outsourced two specialized logistics company.
This depends entirely on the nature of the goods, the financial condition of the company, the nature of buyer and seller, the amount of transportation required for the goods to move from one place to the other and other such factors which may directly affect the goods.
For example, a new company who does not have their warehouse may prefer to use the services of a logistics company and also an established company who has a huge turnover of goods is also preferred to outsource the logistics to a different company.
Following is the importance of inbound logistics
- The inbound logistics program, which is effective, can help in preserving the quality of the products right from the factory to the seller. This helps in saving costs as well as increasing the sales of the product. This will further improve the satisfaction rate of the customers and avoid wastage of materials during transportation by keeping them in a safe condition and intact. Keeping the quality of the product is one of the basic aims of Inbound Logistics.
- Greater accuracy can be achieved over the management of inventory if the inbound logistics is in-house for the organization because it will be able to reduce the carrier rates and other consumable expenses which are required in every transportation. This will help the organization to achieve higher returns over some time.
- For example, when a chemical is transported from one location to the other, it is essential that the properties of the chemical are structurally unchanged during the process of transportation. To ensure that the structure does not change it is crucial that the companies use high quality of inbound logistics. If the structure of the goods internally does not remain as expected, then this may affect the sales of the company and also cause reputation loss for the organization.
- In the process of supply chain management, inbound logistics forms the first step. If something goes wrong with the inbound logistics, then it affects the entire supply chain management process. Inbound logistics has a lot of importance in the supply chain management and in spite of this importance, many companies over the process. Managing inbound logistics improve not only that nature of the goods and products but also improve the brand image of the company.
How to improve inbound logistics?
Improving inbound steps has gained importance in recent times since the companies have understood that the product should remain intact is it is delivered to the customer.
Following are few of the steps which can be commonly carried out to improve the inbound logistics; however, the methods vary depending on the nature of the product or service.
#1. Note down the correct costs:
Every shipment will have a certain transportation cost. This cost is to be bundled with the retail price of the product.
Nude, it is seen that the longer the contract is between the buyer and the seller, the higher is the discount that is passed on. The maybe other surcharges which are not mentioned in the contract, and it is essential that those costs are considered while negotiating.
For example, fuel costs. If these kinds of surcharges are not considered, then whatever cost is saved in negotiation, will be spent on this.
#3. Streamlining the process of inbound shipping:
The shipping processes is a long and exhausting process which involves multiple steps, right from collecting the order from the manufacturing unit and then packaging it properly and then sending it to the seller or sometimes directly to the end customer.
Once the process is streamlined, and the process is set, the costs associated with its step can be negotiated or reduced.
#4. Supplier communication:
Once the process is established and set, then it is essential that communication with supplier is carried out. The buyer is expected to communicate this to the suppliers in writing and request the receipt of the same about the confirmation.
During the entire process of shipping and inbound logistics, it is essential that compliance is maintained of the products. The accounting cost and associated costs if any are accounted properly and are to be ensured that there is no discrepancy in them.
Making the process more compliant with improved outcomes in terms of quality.
Here is a video by Marketing91 on Inbound logistics.