The logistics network is the means by which raw materials are turned into products and how these products will be delivered to the end-customers. Even though many are aware of how their supply chain is integral to the success of their operations, very few actually understand how inbound logistics and outbound logistics influence the overall process. The fact of the matter is that the process of bringing materials into the company and delivering the finished product to the customer is completely distinct. It’s by knowing the difference that companies will finally understand their logistics network and how it affects their supply chain efficiency.
It should go without saying that both inbound and outbound logistics processes are necessary for success. However, what will work for your supply chain may not necessarily be the same for your delivery network, or vice-versa. Some efficiencies developed during your outbound logistics, for example, may not always mean it will also optimize your supply chain. To better understand this issue, let’s take a look at inbound and outbound logistics and how they affect your supply chain efficiency.
What Happens During Inbound Logistics?
Inbound logistics refers to the network that brings goods and materials to your business. An inbound logistics network will include everything needed for transportation, storage, and delivery of goods from suppliers to your warehouse. There are several key considerations to ensure that your inbound logistics are running smoothly. Manufacturing companies, for example, require raw materials to produce certain goods, you will need to ensure that you have a steady supply capable of matching your production output. At the same time, you don’t want to have too many raw materials being delivered at the same time, overburdening your inventory space needlessly. Therefore, the usual steps that go into the inbound logistics process include:
● Recording and Receipts
Receipts will help supply chain professionals make sure that each step of the process is completed and communicated accurately. These receipts will typically include items, quantity, unit of measurement, and other critical information. The elements that need to be tracked through this process include things such as lot numbers, manufacturing and expiration dates, serial numbers, inventory receipt statuses, receipt status rules, immediate availability of items for cross-docking and backorders, etc.
Some supply chain organizations also employ a pre-receipt notification process that uses automation to send and receive this information even before it reaches the warehouse or distribution center. This service will speed up inbound processes by reducing the amount of time needed to input this information.
● Load Arrivals
The receiving process will start immediately after the pre-receipts have been loaded into the warehouse management systems (WMS). This preliminary inbound process will help supply chain companies be more effective since the potential for human error has been eliminated. And by the time the load arrives, the warehouse manager will know exactly which unloading staging area to have ready.
● Handling Real-Time Information
Receipts will be handed to warehouse managers and coordinators already containing specific instructions on how to begin the receiving process and initiate real-time reporting. Automated systems will preferably be used by logistics and trucking companies to ensure that all warehouse associates are at the right dock door and are unloading the correct shipment based on the information found in the receipt. Once the receipt and load arrival processes are complete, warehouse managers will begin the detailed receiving process.
● Tracking License Plates
Having full control over your moving products is equally as important as having control over storage and warehousing. Logistics companies have since started having their license plate numbers tracked through WMS systems, as it allows for the managing of the entire inbound logistics process. In fact, trucking companies have been required to do so since December 2017, when ELD compliance became mandatory.
● Closing Receipts
The last step of the inbound logistics process involves the process of updating that the trailer or carrier has been emptied. In older systems, this process was done by hand, but newer systems also incorporate automation. Since this step can be updated in real-time, it also allows for reviews and exceptions. This process will also speed up when receipts and other information has been sent in real-time and also allows for docks to be immediately labeled as available for other lead shipments or receipts.
What Happens During Outbound Logistics?
Outbound logistics operations involve the storage, reliable transportation, and distribution of goods to customers. It starts when a customer places a sales order; it then moves on to the warehouse picking and packing stage and ends with product delivery. To make this process run smoothly and effectively, organizations need to choose the right distribution channels and maintain an optimized inventory stocking system and delivery options. Below are the key steps of the outbound process.
● Order Entries and Changes
Order entry is pretty similar to the pre-receipt process during the inbound logistics process. It involves validating orders, checking for any errors or duplications, and handling exceptions. Customers will typically have the possibility to add, remove, or change items in their order until the line items are loaded onto the outbound trailer. Providing these extra services to customers is the main reason why real-time reporting is critical during the outbound process.
● Product Picking and Inventory Replenishment
Replenishment stands for the process of planning for future deliveries. It does this by establishing a pick’s prerequisites, as well as scheduling logistics services. It also includes all the activities that can be completed before the corresponding pick and pack procedures. This process will help the supply chain to operate continuously and with minimal manual planning in-between steps. Depending on the industry, warehouse, clients, or product types it handles, the picking process can be either very simple or highly complex. Among the most commonly used picking strategies are line picking, cluster picking, zone picking, batch picking, label-based picking, and paper-based picking.
● Packing, Staging, Checking, and Loading
When it comes to the outbound process, packing is arguably the most important. It not only includes product packing but also inspecting, labeling, routing, and creating outbound orders based on customer requirements. If this step isn’t performed perfectly, both completed shipments and arrival times can be compromised. As a direct consequence of this, your company’s reputation may be damaged.
When an automated system is involved, the staging location should already be established. While going through this process, checking and loading should also be recorded through the WMS to provide supply chain visibility, accuracy, and timeliness. Once all of these steps are completed, the automated system should be updated, and the order will be loaded onto the truck.
The last steps of the outbound logistics cover the actual shipping of the product to the end-consumer, as well as the creation of a log in your records. By using a WMS, this reporting will be done automatically.
Taking the necessary time to research and understand your supply chain environment will provide you with a huge strategic benefit for your warehouse. If you need help with managing or expanding your warehouse and your supply chain management strategy, or you are looking to partner with a professional logistics provider, Redbird Logistic Services can help!! Contact us today!