In the realm of supply chain management , logistics covers a wide range of service activities beginning from the origin point of a product to its fulfilment point. Some of the crucial logistics activities include warehousing, inventory management, transportation, and order fulfilment.
There are many different categories of products managed through supply chain logistics, such as food, hardware, clothes, and much more. And all these products require different types of logistics to ensure they are handled appropriately and reach their customers in a timely fashion.
To succeed there are five main types of logistics that businesses must consider. Let’s take a look at them:
Inbound logistics
Inbound logistics covers the transportation and flow of goods between suppliers and businesses. It encompasses warehousing, inventory management, order fulfilment, and distribution. Inbound logistics essentially ensures the availability of products in synchronisation with demand. Its goal is to make sure of efficient and on-time delivery of raw materials to speed up the production process. Overall, it helps to smooth out operations and control costs by ensuring timely arrival of materials for production.
Example of inbound logistics
Manufacturing businesses in the automotive industry source components from several suppliers and require a streamlined inbound logistics process to do it successfully. Below are several methods of inbound logistics which help in this area:
- Supplier integration: Manufacturers integrate electronic data interchange (EDI) with their suppliers which allows real-time communication while order processing. Such an integration maintains timely information flow and reduces delays.
- Consolidated transportation: Manufacturers collaborate with suppliers for consolidated deliveries and avoid multiple small shipments. With this approach, businesses reduce transportation costs.
- Just-In-Time inventory: Inbound logistics also helps to align production schedules with supplier deliveries which helps to maintain desired inventory levels. This way, businesses reduce holding costs and ensure that stocks are available precisely when required for production.
Outbound logistics
Outbound logistics in a supply chain is responsible for supplying finished products to consumers in a smooth manner. It can include order processing, placement, transportation, and delivery to the final consumer. Efficiency of outbound logistics is essential to ensure customer satisfaction and retention. Additionally, it is also important to maintain a competitive edge in the market, and for that, businesses must strive to have an optimal outbound logistics plan, ensuring the best route selection and distribution centres for timely product delivery.
Example of outbound logistics
Implementation of UCCs or Urban Consolidation Centres for reducing traffic congestion and carbon emissions is the epitome of enhanced outbound logistics practice. These centres collect goods from multiple suppliers and then do the final delivery which enhances efficiency of last-mile delivery by curtailing several unnecessary delivery attempts/counts, saving costs and reducing carbon emissions.
Reverse logistics
As the name suggests, reverse logistics deals with processes wherein products go backwards in the supply chain. The reasons can be the low selling of several products or the damage these products suffer. Reverse logistics can cover the managing of returns, remanufacturing, and replacements of damaged products. With effective reverse logistics, businesses ensure waste reduction, recover value from returned products, and streamline overall supply chain management.
Example of reverse logistics
A significant example of reverse logistics can be explained through its contribution to the remanufacturing of automotive products. This method involves collecting outdated and end-of-life parts from dealership centres and authorised dealership facilities, and safely transferring them to remanufacturing plants. This is done for restoration, reselling and replacement purposes. Here, the reverse logistics process helps to reduce the requirement for new manufacturing of products which conserves raw materials and decreases environmental impacts such as resource depletion, landfill waste and more. This method not only supports sustainable logistics but also decreases production costs.
Third-party logistics (3PL)
This type of logistics deals with outsourcing supply chain operations to external service providers who manage day-to-day supply chain activities. Such operational activities can include transportation, warehousing, distribution, and inventory management, which are vital elements of both inbound and outbound logistics.
Example of third-party logistics
Third-party or 3PL logistics providers help retailers manage their online orders through comprehensive services such as order fulfilment, inventory management and last-mile delivery with the help of advanced technologies. These technologies include machine learning software and area-specific sorting centres that optimise delivery routes and ensure timely shipments. 3PL partnerships with businesses allow retailers to scale their operations by slashing significant investment in their logistics infrastructure and increasing customer satisfaction. It also provides other benefits that include cost-efficiency, ease of scalability, expertise in supply chain logistics methods and saves time which lets businesses focus on core activities like customer engagement.
Fourth-party logistics (4PL)
This refers to the method in which an organisation completely outsources its logistics operations to a single logistics entity. The provider manages complete operations including goods processing, supplying, tracking, and more. Fourth-party logistics stands as a single point of contact between an organisation and other logistic service providers.
4PL services are a go-to choice for companies whose demand and supply chains are complex and/or experiencing rapid growth. The main difference between 3PL and 4PL services is that 3PL bestows some of the logistics services whereas 4PL services deliver a holistic approach from start to finish of the entire operation.
Example of 4PL logistics
Businesses partner with 4PL logistics service providers to comprehensively manage their logistics operations. These service providers take responsibility for managing the complete supply chain management. They also provide real-time inventory visibility; shipment tracking facilities and help in demand forecasting to better manage the business. Additionally, 4PL partnerships help businesses reap benefits such as cost reduction through decreased transportation and storage expenses and ease of scalability according to the market demands and changes.
E-Commerce logistics
This example caters to online retail business requirements and falls under a specialised supply management branch. It encompasses extensive activities which cater to the digital marketplace, ensuring products are processed, packaged, and delivered to customers efficiently. The specific activities of E-Commerce logistics comprise fulfilment, inventory management, and reverse logistics. It also ensures consumers get fast and reliable shipping and thus helps online businesses enhance customer satisfaction and retention. To optimise E-Commerce logistics, the service provider should ensure multi-channel integration, warehouse efficiency, packaging efficiency, quality control, and customer communication.
Example of E-Commerce logistics
E-Commerce logistics enhances business operations and customer satisfaction. One of the most visible businesses benefiting from E-Commerce logistics is food and beverage. E-commerce logistics providers provide flexible scaling options for business growth supporting market expansion and faster deliveries with smart route and bulk delivery optimisation. Their services ensure secure packaging of food products and safer and faster last-mile deliveries ensuring enhanced fulfilment. When businesses integrate E-Commerce logistics services into their operations, they also cut costs related to overstaffing and transportation which helps them to have improved profit margins.
Manage all types of logistics with OneAdvanced
A well-organised supply chain is paramount for successful business. At OneAdvanced, we have a comprehensive suite of logistics solutions which can manage whichever type of logistics you implement. Our experience and expertise in this sector enable us to help organisations with streamlining operations, cutting unnecessary costs, and enhancing overall efficiency.
With the help of technology, raw materials are delivered on time, finished products reach customers quickly, and the reverse flow of products can happen smoothly too (when necessary). Transform your logistics processes while ensuring sustainable growth and operational excellence with OneAdvaned.
