We have already discussed why choosing proper 3PL logistics services, and a trucking company with a modern warehouse management system (WMS) is crucial to any successful supply chain management process. Within the supply chain process, there is a much smaller piece of the puzzle that is arguably the most critical component in maintaining accurate inventory levels: The Inbound and Outbound Logistics Operations.
|Aspect||Inbound Logistics||Outbound Logistics|
|Definition||The management of goods or raw materials flowing into a supply chain.||The management of orders, and shipping activities to move goods out of a supply chain and into the hands of customers.|
|Activities||Supplier management, load arrival, procurement, inventory control, Recording and Receipts, warehousing, transportation, and receiving||Order fulfillment, packing, distribution, transportation, customer service, and assembly.|
|Focus||Managing relationships with suppliers, manufacturers, and distributors||Customer satisfaction, on-time delivery, and reducing transportation costs.|
|Key Challenges||Supplier reliability, inventory management, supply chain visibility, demand forecasting, etc.||Order accuracy, warehouse efficiency, transportation management, customer expectations, etc.|
Suppose your inventory is not initially received and reported accurately during the inbound processes (ex., by the company’s Receiving Department). In that case, it becomes nearly impossible to maintain an accurate system or record of available products. This affects all aspects of logistics services and the supply chain.
Also, if the outbound shipping process does not operate correctly, shipments may be incomplete, arrive late, or be sent to the wrong recipient.
For this reason, you should figure out how to choose a logistics and trucking company that focuses a great deal of attention to the inbound and outbound processes. To ensure that this process runs as smoothly as possible, at BR Williams (a 3PL logistics company serving the USA and Canada), we use top-of-the-line real-time logistics oversight software capable of monitoring warehouse inventory control, distribution channels, and more. Read more about our warehouse management system (WMS) here.
To figure out the difference between inbound and outbound logistics, it’s essential first to know the basics of an inbound and outbound process. That will help you better understand how it affects the efficiency of your overall supply chain. Let’s take a look at inbound logistics vs outbound logistics (and pay attention to areas your business can improve in).
The Inbound Receiving Process:
1. Recording and Receipts
Recording and receipts drive the inbound process. Receipts help supply chain professionals ensure that each step in the process is completed and communicated accurately. Basic receipts include items, quantities, units of measurement, and other required information.
Elements that you should track throughout the inbound process include:
- Lot numbers
- manufacturing dates
- expiration dates
- serial numbers
- P.O. tracking
- various inventory receipt statuses
- default receipt status rules
- emergency re-direction
- routing of times to special staging on “short” inventories
- immediate availability of items for backorders and cross-docks
Pre-receipt notification is among the newer and exciting logistics services that supply chain companies (like BR Williams) use. This service speeds up the inbound process by reducing the amount of information entered manually. The pre-receipt process allows for automation, real-time receiving, and put-away functions, reduces receiving errors, and minimizes cost.
2. Load Arrival
Your receiving process should start after pre-receipts have been loaded into the WMS system.
However, the product is more than received with a highly functional WMS system (like the one BR Williams utilizes). The system can make receipt/load appointments in advance or reserve docks, doors, and staging areas within minutes.
This preliminary inbound planning helps supply chain management companies become more efficient when completing each logistics service. All receipt information should be already entered with minimal human error. Due to this, when a receipt/load arrives, the warehouse coordinator knows exactly which dock door to direct the truck to and can easily assign an unload staging area.
3. Inventory and Real-Time Information
The “receipt” is handed to coordinators, already “bar-coded” with specific instructions for an associate who can begin the receiving activities and real-time reporting.
Checking processes as you go ensures that the inbound process continues to run smoothly. Automated systems used by your logistics and trucking companies should ensure that warehouse associates are at the correct dock door and are unloading the correct shipment based on information from the bar-coded receiver.
Once the inbound receipt and load arrival process are completed, warehouse associates begin detailed receiving. Types of receiving are different for each supply chain and trucking company (Learn more about how to know if you need a supply chain company).
BR Williams does detail receiving in two ways:
- One-Step Receiving: When customers benefit from eliminating the staging and have their products sent directly to storage
- Two-Step Receiving: When the receipt/load needs to be staged instead of putting directly into storage
4. Transport Management and License Plate Tracking
Having control over your moving product is just as important as having control during storage and warehousing. Trucking companies know this and have started allowing their license plate number tracking through WMS systems.
5. Put-Away, Receipt Close, and Stock Control
In older systems, once a product was received, it was stocked only by professionals. This is still true today in some instances. However, new systems provide for other options and automation.
For example, BR Williams’ WMS system specifically allows customer-configured settings that help determine whether your product will be put away using an operator-dictated or system-directed method.
The final step for logistics and trucking companies involved in the inbound process is updating in real-time that the trailer or carrier has been emptied.
This is when real-time capabilities allow for review and exceptions.
The process speeds up when receipts and other information can be sent in real-time. It also allows docks to be immediately labeled “available” for other receipts/lead shipments.
The Outbound Logistics Activities:
1. Order Entry, Adds, Changes, and Deletions
When the inbound process is handled correctly, it allows for an easier outbound process.
Order entry is similar to the pre-receipt process in the inbound process. The first steps of an outbound system are to validate orders, check for errors or duplications, and handle exceptions immediately.
Up to a point, customers should be able to add, change, or delete specific items or entire orders.
Making these logistics services available to customers is the number one reason why real-time reporting is crucial to the outbound process.
2. Replenishment and Product Picking
Replenishment is essentially planning for future deliveries by establishing pick pre-requisite requirements and scheduling logistics services and activities to be completed before the corresponding pick tasks.
This step allows for your supply chain to operate continuously with minimal manual planning and strategy between steps.
The picking process can be simple or very complex. Your picking process should be unique due to the nature of different businesses, industries, and clients.
Choose logistics and trucking companies that allow for tailored picking capabilities and strategies.
Picking strategies may include:
- Line picking
- Cluster picking
- Batch picking
- Zone picking
- Label-based picking
- Paper-based picking
3. Packing, Staging, Checking, and Loading
Packing is arguably the most critical logistics service involved in the outbound process. It includes packing items, inspecting, labeling, routing, and manifesting outbound orders per specific customer requirements.
If this step isn’t managed flawlessly, completed shipments, finished products, and arrival times can be compromised, and the business’s reputation will be at stake.
Staging locations should already be decided if an automated system is involved. While going through the staging, checking, and loading process, each step should be recorded in real-time through WMS for accuracy and timeliness.
Once all shipments are loaded and ready to go, a warehouse coordinator should be automatically updated, and a warehouse associate should be directed to load your order onto a trailer.
4. Shipping and Document Generation
The last step to a successful outbound process is shipping the product to its final arrival place and creating a log of the process for your records.
This is another essential reason to use trucking companies that utilize a WMS. The final reporting is essentially already complete if every step has been recorded throughout the process.
Key Challenges of Inbound and Outbound Logistics Processes
If you are considering using a logistics or trucking company, ensure that you are hiring a company that can meet your specific needs in an efficient, highly functional way that is reported to you online and in real time from the distribution center.
BR Williams proudly uses one of the industry’s most potent warehouse management systems so that clients have real-time access to the most critical data required to deliver the right product to the right place at the right time.
Our capabilities provide the most options, provide:
- Unique and personal solutions.
- Real-time updates and control.
- An ability to improve our client’s inbound and outbound process.
The Shipping & Receiving Process: A Step-by-Step Infographic Guide
The difference between inbound and outbound logistics is that inbound logistics is receiving products/goods, whereas outbound logistics is shipping products/goods to another destination.