This article is on Inbound logistics and talks about Inbound logistics definition, meaning, functions, and other related information about the topic.
We know that a business will always need raw materials and goods to be in their manufacturing units or their offices. An Inbound logistics team will keep this in check.
In a manufacturing company, the production unit purchases raw materials or components from its suppliers for the production of other goods. Therefore, transporting such goods, storing goods, and receiving them needs to be looked upon in an efficient manner. The Inbound Logistics team under supply chain management are the functional elements working behind this.
Inbound Logistics Meaning
Inbound logistics in supply chain management deals with transportation, storage, and the receipt of goods into a business. It either relates to goods procured for office use or for the production unit. Inbound logistics is both incredibly complex and important.
Inbound Logistics Definition
Activities associated with receiving, sorting, and disseminating inputs into products such as material handling, warehousing, inventory control, vehicle scheduling, and returns to the supplier are collectively referred to as Inbound Logistics.
Inbound Logistics lead Time
The amount of time it takes to order and receive materials from your supply base to manufacture your product is the Inbound logistics lead time. The lead time helps us in deciding when to place the order for replenishments. The lead time helps us in calculating Re-order levels.
The activities under Inbound logistics Includes
- Activities related to sourcing
- Acquiring related Activities
- Activities are related to storing and delivering the raw materials and parts to the product or service department.
Inbound Logistics Example
For example, Let’s consider a Bike manufacturer.
The manufacturer’s inbound logistics would include the sourcing of raw material inputs (sheet metal, glass, wiring, plastics, etc.),
Above all, we need to plan out how to store the materials in preparation for and during the assembly process, and how to manage the flow of manufactured Bikes which leaves the factory.
If our business is into production we will need raw materials to produce certain goods. We may need to maintain a sufficient supply of those materials to match our production output. At the same time, we don’t want too much raw material delivered especially when our warehouse can’t accommodate it.
Therefore, we will need an efficient Inbound logistics systems.Optimizing your inbound logistics network is essential for smooth operations.
Inbound Logistics Process Flow
Ensures that the materials received and related Information are processed and simultaneously made available promptly to production, to production store and other departments.
Simultaneously it ensures documentation of goods received and goods returned to suppliers.
Inbound logistics also ensures acceptance are made only to items meeting purchase order specifications.
Inbound Logistics Functions
Three functions linked with inbound logistics are: ·
- Production scheduling Either a manufacturing firm or a wholesale/retail firm must first forecast demand, and then determine what must be purchased for use in the production process or to stock inventories. So, the first step under Inbound Logistics is to schedule production.
- Procurement Process- the acquirement of goods is then carried out from the selected suppliers for the materials scheduled for production.
- Handling returned products Handling returned products is more of an issue for domestic transactions than for foreign ones because the difficulties in returning a product across borders may erase any advantages of doing so.
Inbound Logistics in Service Industry
Services differ from products in many ways –
Inbound logistics in a service industry may vary to a great extent therefore, We have a need for physical products like stationaries and assets even in our services sector. Inbound logistics might not include storage with regard to the intangible part of service, however, for the tangible part, we still need inbound logistics.
Therefore, Inbound Logistics is a very important area of focus just like outbound logistics. Prioritizing activities under inbound logistics helps in the smooth functioning of businesses. For many firms, Inbound logistics is a big part of their operations, therefore Inbound Logistics is vital to them.