We consume many finished products and goods in our daily routine lives; but their production involves different types of material; processes, supply chains, and logistical activities. Businesses and companies have been doing it for decades in order to improve the customer satisfaction level. Today, we’ll discuss inbound logistics activities; their definition; activities involved in the process, advantages, and disadvantages.
What is Inbound Logistics?
Before jumping into the discussion of inbound logistics activities; it is significant to discuss its definition. Inbound logistics is the method of collecting raw materials and supplies from various suppliers and providing them to the production department of the company. However, it transforms and converts material into finished goods by managing the procurement and delivery of required supplies for the finished goods.
Effective inbound logistics management would make sure that the company would have a smooth supply of the most-demanded and best-selling products and goods.
Inbound Logistics Activities
Some of the main inbound logistics activities are as follows;
Sourcing is the method of finding and locating raw materials and goods from various suppliers and vendors. There are various suppliers and distributors available in the market, and you have to select the best one for your business operations. Many e-commerce platforms and online stores have many potential suppliers that they could reach out to at any time.
Ordering the required raw material and supplies in the right quantity, and you should make sure that it reaches you at the right time. After deciding the products and supplies that you need to procure; you should negotiate the price, terms, and conditions, and close the deal.
Transportation decision plays a key role because it would impact the overall supply chain and logistics costs and processes. The seller should choose the right medium of transport (air, rail, road, or sea) depending on the sensitivity of the product. You also need to consider 3PL and carriers and make sure whether they pick up from the vendor warehouse.
As the name implies, it is the method of receiving raw supplies and materials, unloading them, and matching them with the required order. When the material reaches the store or the warehouse; the courier company offers the bill of loading to the receiving personnel because it contains the list of shipped items. The company has to generate GRN (goods receipt note) to make sure that they have received everything they order.
Material handling means storing and managing material and supplies in the storage facility and the warehouse. Keep them in storage until you receive the next customer order.
Putaway is the method of moving and transferring material and supplies from the receiving dock to the secure and safe storage area. It guides the staff and employees to move the supplies to the most suitable location. It would attach the RFID tags to the goods for easy identification.
It comprises managing the procured items to the manufacturing unit or fulfilling customer orders. It has the obligation to ensure the placement of raw supplies and materials correctly in order to satisfy the safe storage requirements.
It is a method of placing the goods under the right storage conditions and tracking them. IMS (inventory management system) is a great tool and software, it has the details of the input and items and would update the inventory with the latest arrival of the stock.
It is the method of distributing and transporting the required supplies and materials to the right and authorized destination inside the business facility.
It comprises collecting information about the incoming orders in terms of their required documentation and locations. The suppliers and vendors would offer you the tracking link to track the movement of the shipped items or the shipment.
Reverse logistics deals with the shipment of returned, refurbished, defective, and damaged goods from customers. If you are returning the product, then you should discuss it with your suppliers and arrange the pickup process from your location.
Advantages of Inbound Logistics
Some of the main benefits and advantages of inbound logistics activities are as follows;
- Better relationships with suppliers and vendors
- Establishing a foundation for sales success
- High capability to recognize supply chain issues
- Improved inventory management
- On-track and steady production rate
- Unpredictable cost of raw material
- Lower receiving and shipping cost
- Better product quality
Disadvantages of Inbound Logistics Activities
Some of the main challenges and disadvantages of the inbound logistics are as follows;
Many companies spend a lot of their resources on shipment. In order to decrease the cost, it requires them to have better negotiation with limited carriers and combine all the shipments to have a full truckload of material.
It is difficult to know the exact location of the shipment; when it would reach and how much it would cost. Limited information would make companies order for extra inventory; procure early, and experience delays in customer deliveries and production.
High receiving and deliveries
Companies would experience the problem of too many receiving and deliveries without proper planning. As a result, the parking would become crowded with trucks and baffle many drivers about what trucks go for loading or unloading.
Return processing is a very difficult process for some companies; especially if the lost sales don’t quickly get back to the inventory. Additionally, it causes lower customer satisfaction levels and wrong inventory count.
Businesses and companies require reliable suppliers and vendors that provide high-quality supplies at a competitive price range. It is difficult to find reliable suppliers and vendors. Your focus should be on the following to make things easier;
- Establishing long-term relationships
- Timely payment to suppliers
- Necessary negotiation to streamline contracts with business goals and objectives
- Analyzing quality certifications of suppliers
- Checking their customer service
- Finding alternative suppliers
Conclusion: Inbound Logistics Activities
After an in-depth study of inbound logistics activities; we have realized that inbound logistics plays a key role in the smooth running of supply chain and logistics processes. If you are learning about the activities involved in inbound logistics processes; then you should keep in mind the abovementioned elements and processes.
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