Inbound Logistics:Simplified Definition

Inbound logistics indicates the way commodities and materials are brought into the company. Inbound logistics centers on the supply part of the supply chain operation conducted by companies.

What is Inbound Logistics: Technical Definition

ClickPost defines Inbound Logistics as the process by which a company receives cargo and materials to set up the supply chain, which involves sourcing, ordering, receiving, storing, inventory, distribution, transportation, tracking, and managing incoming materials from any given source. 

How does Inbound Logistics affect the Supply Chain?

  • The supply chain starts with securing reasonably priced and dependable suppliers for procuring the stock, thereby maintaining control over the supply chain's initial and essential part.

  •  A well-organized Inbound logistics supply chain will ensure no overheads and wastage of materials, thereby reducing expenses.

  • A good inventory management system to allocate all the stock will ensure there is never a delay in order processing and maintain a hassle-free supply chain.

Which Operations are Identified as Inbound Logistics?

The Processes that are Part of Inbound Logistics are:

  • Sourcing and purchasing raw materials from various sources and initiating the management of these materials through records keeping and inventory allocation. Forecast systems also predict the requirement of stocks to keep an automated ordering and inflow of materials.

  • Tracking systems for stocks coming into the warehouses are required to assess spending, confirm delivery of ordered stock. These tracking systems also make sure relevant storage spaces are allocated according to the needs of the stock. For instance, assigning products to be stored in temperature-controlled facilities in the warehouses.

  • A warehouse management system is configured and put in place to manage all inventory and allocate spaces accordingly. There are rows of storage racks with marking systems to provide access to all the stock.

  • Warehouse management in Inbound Logistics is also part of the initial supply chain that is set up to provide adequate response times to pick stocks

What is Inbound Freight?

Inbound freight refers to the transportation of raw materials and products coming into the business after being purchased.

Who Pays for Inbound Freight?

The shipper pays for the freight charges. The shipper is responsible for transporting the materials to the business. The freight cost is primarily included in the price of the raw materials.

What is the Difference Between Inbound and Outbound?

  • Outbound transportation is the distribution of finished products or goods retrieved, packaged, assembled, and transported to wholesalers, retailers, and customers. In comparison, Inbound Logistics is the inflow of materials into the business.

  • Inbound logistics work with suppliers, vendors, and distributors, whereas outbound logistics work with end customers and distribution channels.

  • Sourcing, procuring, storing, and handling are central to Inbound logistics. In contrast, Outbound logistics depends on inventory management, order fulfillment, and shipping.

  • Inbound Logistics focuses on the supply and procurement of raw materials, whereas outbound logistics is based on meeting customer demand and sales processes to generate revenue.

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