At the mention of the word “Logistics”, a lot of people get confused and require further explanation. For key players in international and local trade and parties involved in the supply chain process, such as suppliers and distributors, it is expedient to understand basic terms of the industry.

Whether you are in the manufacturing business or retail business, shipping and handling will be a huge part of your overall operation in this technological world where more people shop online for what they need. If you are in a situation now where you know you are going to need logistics service, you probably have one big question: what's the difference between inbound and outbound logistics? Here are a few things you should know about a few of the differences between the two.

What is logistics?

Logistics can be said to be the management of the movement of materials, information and other resources between two points, i.e. from the point of inception to the point of consumption, to conform to the requirements of the customers and the organization. Logistics management determines the procurement, storage and transportation of goods and material to their ultimate destination. Logistics is the efficient management of the storage and movement of products and information within a supply chain. In other words, it is a process used by a business in order to coordinate its supply chain operations. It includes a wide variety of tasks and activities such as managing how raw materials or inputs are acquired and transported to the business, how inventory and inputs are stored at the business’ facilities, and how inventory is transported within the business and beyond. Logistics activities can be divided into two main categories: inbound and outbound logistics. The first category is mostly related to the transport, storage, and delivery of goods coming into a business while the latter focuses on the same for goods going out of business.

Inbound Logistics

As a business owner who has a lot of inventory coming into the business on a regular basis, it is important to be more interested in learning about inbound logistics. This area of logistics focuses mainly on streamlining the process of transporting goods to the business as they are needed.

The inbound logistics process refers to the inflow of raw materials from suppliers to manufacturing plant. This is the first phase of the value chain. It involves different activities, such as the storage and delivery of raw materials and parts that are going to be used in production. It also includes sourcing the materials, tracking inventory and optimizing the movement of products from suppliers to the store, warehouse or manufacturing unit.

Outbound logistics

Outbound logistics involves the flow of finished products from a company to its end customers. These activities are mainly concerned with the distribution channels and customer service. Outbound logistics, as the name indicates, is the collection, storage, and distribution of the final goods and related information flows, from the manufacturing plant to the end user. It covers all those activities (i.e. selecting, packaging, transporting, etc.) which are involved in the outflow of merchandise from seller to the buyer.

Differences between Inbound and Outbound Logistics