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What is outbound logistics and why is it so important to modern business?

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What is outbound logistics and why is it so important to modern business? Image: Pixabay
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What is Outbound Logistics? 

Outbound logistics is a term for the processes of storing, moving and distributing goods. It includes all systems that help prepare an order and get it to the end customer. 

The different stages are warehousing and storage, distribution, transportation, and last-mile delivery.

Let’s take a more in-depth look at the individual areas of outbound logistics:

1. Warehousing and storage

To meet demand as you make continued sales, you need to keep a surplus of products in storage. In January 2020, US companies had, on average, a ratio of 1.39 inventory to monthly sales.

The goal of warehousing is to keep products safe and readily available while awaiting purchase. You can store products in your own warehouse or one that is owned by a third-party logistics provider. 

2. Inventory management 

Inventory management involves picking, packing, and storing your goods in the right place. Many warehouses have inventory management systems to help with this.

3. Transportation

Next, is the process of shipping products to distribution centers/partners. At this stage, transportation is typically done by big trucks/planes/freights. The long distances and large volumes can be a challenge.

4. Last mile delivery

Last mile delivery is the most important step, and is also the most expensive. This is when your order goes from the distribution center to your customer’s door. This task is typically handled by a large fleet of smaller trucks or vans.

If you sell direct to consumer, for example, from an e-commerce store or catalog, you need to cover these four stages effectively.

From managing the product in your warehouse to preparing the parcel and passing it on to a freight service, and delivering the final goods, every stage impacts whether the order gets to the customer’s door on time. 

Just think of everything that happens behind the scenes so Amazon can offer same-day delivery from online sales. 

What Is the Difference Between Inbound and Outbound Logistics? 

The key difference between inbound and outbound logistics is simple: Inbound logistics refers to all processes related to getting your products from your suppliers and manufacturers — products coming in. It includes sourcing, buying, storing, and distributing goods and supplier returns.

On the other hand, outbound logistics is all about delivering products to customers — orders going out. It includes inventory management, order management, packing, distribution, and more.

An Example of the Outbound Logistics Process

In this section, we will cover an example of an outbound logistics order process.

Let’s examine every stage for an e-commerce company that sells consumer products.

1. Customer places order

The customer places an order for a specific product on your e-commerce site or through your catalog.

2. Order is confirmed, and products picked in the warehouse

The warehouse confirms the ordered products, the workers pick the relevant inventory. If in place, the WMS system adjusts product counts based on the product id or stock-keeping unit (SKU).

3. Order is packed at warehouse

Workers in the warehouse pack the products and prepare them for shipping by moving them to the loading dock.

4. Trucks pick up daily orders

Freight trucks pick up the orders bound for the relevant distribution centers every day.

5. Trucks drive to distribution centers

The trucks drop off the ordered inventory at the closest distribution center to the customer.

6. Delivery drivers pick up orders at distribution centers

Delivery drivers pick up individual orders at distribution centers for their delivery area.

7. The package is delivered to the customer 

The package arrives at the doorstep of the customer, completing the logistics process.

Channels of Distribution

Businesses that don’t sell straight to consumers, don’t handle the entire outbound logistics chain.

If your main distribution channel is a wholesaler or online retailer that fulfills orders, like Amazon FBA, it’s a different story. Your main concern isn’t optimizing each stage of the process. You need to pick reliable wholesalers, distributors, or retailers and develop strong relationships with them.

Work closely with supply-chain partners

The tail end of supply-chain management is a critical part of your outbound logistics. So if you don’t handle everything yourself, make sure you work closely with retailers or third-party distributors.

An excellent example of collaboration is P&G and Walmart’s supply-chain partnership. They share data and coordinate real-time adjustments to meet the changing demands of the consumer goods market.

A good way to kickstart a partnership can be to coordinate advertising efforts. If you show an interest in improving the bottom line for your retailers or wholesalers, they’ll be more interested in your products.

Outbound Logistics and Delivery Directly Impacts the Customer Experience

It doesn’t matter if you sell consumer products or customized solutions for businesses. Outbound logistics plays a big part in customer satisfaction for manufacturers or online retailers.

And 81% of companies single out customer experience as a competitive advantage.

Below, we’ve listed the top three criteria for meeting customer expectations and keeping them happy.

These three areas are essential to meeting and exceeding customer expectations and ensuring return business in the long term.

1. On-time delivery is essential

It’s 2020. With Amazon leading the pack with same-day delivery, you can no longer afford delayed shipments and packages. 

Every hour your package is delayed is another burden on the customer relationship. To succeed in e-commerce, it’s not enough to promise fast delivery, you must keep that promise.

2. Delivering to the wrong address is unacceptable

What’s worse than getting a package late? Not getting the package at all because it was mishandled and sent to the wrong place.

3. The product must arrive in an acceptable condition

If the product is delivered on time, but it’s in an unusable or severely damaged condition, your customer won’t be happy. It’s an even worse experience than a delayed delivery.

If you use a third-party logistics provider, you must pick a trustworthy one.

This article originally appeared on optimoroute.com

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Logistics & Supply Chain

GeoPost/DPDgroup makes an investment in Aramex

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GeoPost/DPDgroup makes an investment in Aramex . Image: Pexels
GeoPost/DPDgroup makes an investment in Aramex . Image: Pexels
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GeoPost/DPDgroup, a subsidiary of the Groupe La Poste, announced it has acquired 21,6% of the outstanding share capital of Aramex.

Boris Winkelmann, Chairman and CEO of GeoPost/DPDgroup, said: “The investment in Aramex is part of GeoPost’s international development. Aramex is already a key partner of GeoPost. Our two companies have been working together for 10 years, leveraging on GeoPost/DPDgroup’s strong presence in the European parcel delivery market and Aramex’s powerful international network in the Middle East, Asia, Africa and Oceania.”

Aramex is a listed entity on the Dubai Financial Markets and the investment was purchased through a combination of direct and open market transactions. This investment is subject to notification to the competent regulatory authorities.

DPDgroup is the largest parcel delivery network in Europe. The company combine innovative technology and local knowledge to provide a flexible and user-friendly service for both shippers and shoppers. With industry leading Predict service, it is setting a new standard for convenience by keeping the customers in close contact with their delivery.

With 97,000 delivery experts and a network of more than 58,000 Pickup points, it delivers 7.5 million parcels each day – 1.9 billion parcels per year – through the brands DPD, Chronopost, SEUR and BRT. DPDgroup aims to be a reference in sustainable delivery and become a leading enabler of e-commerce acceleration.

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Logistics & Supply Chain

Zebra Technologies expands Fetch Robotics portfolio

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Zebra Technologies expands Fetch Robotics portfolio. Image: Fetch Robotics
Zebra Technologies expands Fetch Robotics portfolio. Image: Fetch Robotics
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Zebra Technologies Corporation, an innovator at the front line of business with solutions and partners that deliver a performance edge, introduced the industry’s most comprehensive picking solution to help businesses improve their fulfillment operations. The fulfillment solution consists of three new autonomous mobile robots – FlexShelf, FlexShelf Guide, and RollerTop Guide – and a new FetchCore fulfillment software package for order or batch picking. These new offerings further extend Zebra’s position as a leader in automating and digitizing critical workflows in warehouses, distribution and fulfillment centers as order volumes increase, labor pools get more competitive and customer expectations continue to rise.

FetchCore enterprise cloud software allows companies to quickly modify workflows on-demand for warehouse operations. It enables the dynamic orchestration of labor and robots by integrating with leading warehouse management systems (WMS) and warehouse execution systems (WES) to optimize order, batch, case, and pallet picking workflows. FetchCore’s new fulfillment software package incorporates warehouse annotation, wave management, a pick heatmap, advanced fulfillment analytics and forklift detection features. The warehouse annotation feature superimposes the physical pick locations in a facility logically into FetchCore eliminating the need for QR codes and enabling AMRs to automatically adjust to reslotting within a warehouse.

“Zebra’s fulfillment solution enables Manhattan Associates to combine an end-to-end, best-in-class fulfillment AMR solution with optimization capabilities inherent to our warehouse management system software,” said Jon Liberman, Vice President of Enterprise Mobility at Manhattan Associates, a PartnerConnect Premier Solutions partner. “We are excited to provide a solution that increases the efficiency of each picking and case pick to pallet operations especially while many of our customers are experiencing challenges with a competitive labor pool, supply shortages, and smaller delivery windows.”

Powered by the enhanced fulfillment software package in FetchCore, the three new AMRs expand upon Fetch’s existing case picking capabilities while providing several unique advantages over existing each picking AMRs in the market. Fetch AMR’s can deliver up to three times increased productivity in fulfillment operations while total throughput in a facility is increased as a result of these new AMRs operating up to 50% faster than other fulfillment AMRs.

Built on the proven Fetch Freight100 platform, the FlexShelf and FlexShelf Guide provide flexible configurations for bin sizing and spacing, which expands the types of items that can be picked using AMRs. Both AMRs also reduce worker training time and increase picking accuracy by incorporating put-to-light and pick-side lighting – a critical element during seasonal peak periods when order volumes and seasonal staff are at their highest levels. Attracting and retaining staff is easier as the solution can reduce the amount of time pickers spend walking by up to 60%, and features like ANSI RIA R15.08 compliance help keep them safe. An industry-first forklift detection feature enables AMRs to avoid forklift blind spots helping prevent damage to the AMRs. Businesses deploying the RollerTop Guide AMR can integrate each picking workflows with existing fixed conveyance, sortation and automated storage and retrieval systems (AS/RS).

All of these new AMRs can be purchased utilizing a capital or Robot as a Service (RaaS) model, depending upon customer preference. Deployments are fast and cost-effective because all Fetch AMRs operate on a facility’s existing Wi-Fi network with the option to use current handheld, voice and vision technologies capable of interfacing with FetchCore’s software-as-a-service (SaaS) in the cloud.

“In 2020, we introduced SmartSight as our first automation solution for front-of-store retail, and we welcomed Fetch and its broad portfolio of AMRs for material transport in logistics and manufacturing into the Zebra family just a few months ago,” said James Lawton, Vice President and General Manager of Robotics Automation, Zebra Technologies. “Our new comprehensive fulfillment solution brings together the best of both companies to help our retail, wholesale and third-party logistics (3PL) customers overcome the biggest challenges in their each and case picking workflows with automation that is truly intelligent.”

According to Zebra’s Warehousing Vision Study, 77% of respondents agree augmenting workers with technology is the best way to introduce automation in the warehouse. Given increasing consumer expectations driven by the on-demand economy along with a limited workforce, automated processes can help streamline tasks, create happier, more efficient workers, and help businesses stay competitive in a dynamic marketplace.

“AMRs that support manual picking operations in fulfillment centers are in incredibly high demand, as retailers and 3PLs struggle to keep up with their customers’ demands,” said Ash Sharma, senior research director at Interact Analysis. “Fetch Robotics, now part of Zebra Technologies, has responded to this demand by developing an integrated fulfillment solution so that retailers and 3PLs can now not only streamline each picking operations, but leverage the entire portfolio of Fetch AMRs to automate any manual workflow in fulfillment and distribution centers.”

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Logistics & Supply Chain

DP World launches CARGOES Logistics

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DP World launches CARGOES Logistics. Image: DP World
DP World launches CARGOES Logistics. Image: DP World
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DP World, the leading provider of smart supply chain solutions, announced the launch of its new digital logistics platform, CARGOES Logistics. The platform provides customers with a single-window solution enabling seamless, safe, secure, and efficient movement of their cargo. With CARGOES Logistics, customers can choose from multimodal logistics options, ship freight by sea, road, and/or rail, get instant quotes, swift booking confirmation and multiple secure payment options in three simple steps – Search, Choose & Book. It will offer easy and swift cargo booking from origin to destination. The first phase of launch will immediately offer customers access to book cargo from UAE to India as well as India to multiple destinations across the Middle East, Subcontinent, Southeast Asia, the Far East and North Africa.

CARGOES Logistics aims to address complexities and inefficiencies that exist in global supply chains including multiple handovers, inefficient tracking and limited visibility of a shipment across the supply chain. The new digital platform will enhance transparency by providing deep tracking of cargo with real time insights, end to end visibility & predictability, an all-inclusive price with no hidden charges and highly efficient end to end digital experience backed by DP World’s extensive network of integrated logistics assets and best-in-class service levels. It will facilitate ease of doing business, boost reliability & flexibility and provide seamless experience to customers for all their logistics needs.

Rizwan Soomar, CEO & MD, Subcontinent, DP World said: “This announcement is a testament of our commitment towards enabling smart logistics globally. With CARGOES Logistics, our aim is to build and offer highly efficient, seamless and end-to-end transparent supply chains.

The new digital solution will simplify the container shipping experience providing visibility across all modes of transportation through smart enablement of IOT based solutions. We will continue to invest in technology and work with our customers to drive innovation, continually add new products & features and provide solutions to meet their global logistics needs.”

Pradeep Desai, Chief Technology Officer, DP World concluded: “Demand for digital solutions has never been higher and will only keep growing. We are leveraging technology to create value for our customers and help drive growth. CARGOES Logistics by DP World is part of the broader CARGOES software suite of products. DP World created CARGOES to solve pressing challenges caused by supply chain related inefficiencies. It’s a holistic solution powered by technology targeting all aspects of global trade including Finance, ERP, Tracking, Terminal Operating System, Customs software and enabling end-to-end logistics. We are excited to provide Logistics as one of our first CARGOES offerings to customers.”

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