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What Are Outbound Logistics?

A logistics analyst must have the ability to look at a company’s operations and spot processes that need to be changed.
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  • Written By: M. McGee
  • Edited By: Lauren Fritsky
  • Last Modified Date: 17 August 2014
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Outbound logistics are the processes involved in moving products from the creating firm to the firm’s customers. This portion of logistics is completely separate from taking and using raw materials, otherwise known as inbound logistics. This field relies heavily on transportation and storage of finished goods. Outbound logistics refers to the product from the seller’s standpoint, and product may mean different things to different people.

For the most part, outbound logistics is a very simple concept. The field is centered on two concepts, storage and transportation. The storage portion of the field uses warehousing methods to keep the finished product safe and accessible. At any moment, the product may need to move out to a customer, so organization is key to success. While this part of the field is based on storage, having as little product stored as possible is generally desirable, as stored materials aren’t making any money.

The transportation portion is generally the more involved and complex part of outbound logistics. In this field, it is important to move the product from one place to another in the best way possible. Factors need to be taken into account that cover all possible scenarios in order to find the best movement methods for goods. For example, delaying one shipment may cost the company money, but if that means it may be combined with a larger shipment, that may end up being more efficient in the long run.

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This field is the opposite of inbound logistics. In that field, the primary concern is bringing the product to the company for processing. In many ways, the two fields operate the same way. With inbound logistics, people attempt to store as few materials as possible to prevent over-purchasing, and they work to make sure the raw materials arrive on time and for the smallest cost.

The similarities between the two fields are not unexpected, as one firms outbound logistics is another firms inbound. These terms are always from the standpoint of a specific company. If that firm purchases steel bars that it makes into cooling racks, then the bars are inbound and the racks are outbound. When another company purchases those racks to make into toaster ovens, the racks become inbound and the ovens are outbound.

One of the few times when this is not the case is when selling directly to the public. In this case, final retailers have inbound products, which are handled in the same way as any inbound logistics. As they sell the product, the customers are not considered a direct part of the supply chain and, therefore, the company simply has sales, rather than outbound materials.

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Telsyst
Post 3

@Certlerant - It is probably a good thing that a lot of things are tending to lean this way. Less trash for landfills. With more people downloading books it also saves a few trees.

Certlerant
Post 2

@Glasis - A lot of stuff on the internet now is digital download. If you want to buy a movie or a book now, you sometimes buy the thing and get it right to whatever device you have. This must be a great thing for some companies. No more cost in shipping.

Glasis
Post 1

The cost of outbound logistics can sometimes be a major part of the cost of a product. Since any product you buy, the difficulty in getting it to the customer has to be reflected in the final price.

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