What to Know About Inbound vs Outbound Logistics
Logistics is an umbrella term encompassing the process of transporting and storing products. The concept can be broken down into inbound or outbound logistics based on whether items are being received or shipped.
Equipment such as our powered trailer mover can be utilized on both sides, but inbound and outbound logistics also differ in several important ways. Here are factors to consider for optimizing your logistics program in both directions.
Supply Chain Side
Companies develop supply chain partnerships with suppliers on the inbound side and customers on the outbound side. In many cases, companies choose to work with third-party distributors on either or both sides.
Liability
Both inbound and outbound shipments are governed by specific agreements between the relevant parties. Free on Board (FOB) is a commonly-used term in which the inbound recipient covers all shipping costs from when the shipment is loaded on a carrier or when it reaches a particular destination.
Supplies and Equipment
Inbound logistics applies to tools, office equipment and other materials used to operate your business, while outbound logistics refers to inventory only.
Supply Chain Integration
Vertical integration is a strategy in which a company takes control over one or more stages of the supply chain. For example, in the 1920s Ford Motor began manufacturing much of its own steel rather than sourcing from outside suppliers. Implementing vertical integration creates a more cohesive supply chain, thereby increasing productivity and reducing costs.
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