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Logistics & Supply Chain

What is outbound logistics and why is it so important to modern business?

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What is outbound logistics and why is it so important to modern business? Image: Pixabay
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What is Outbound Logistics? 

Outbound logistics is a term for the processes of storing, moving and distributing goods. It includes all systems that help prepare an order and get it to the end customer. 

The different stages are warehousing and storage, distribution, transportation, and last-mile delivery.

Let’s take a more in-depth look at the individual areas of outbound logistics:

1. Warehousing and storage

To meet demand as you make continued sales, you need to keep a surplus of products in storage. In January 2020, US companies had, on average, a ratio of 1.39 inventory to monthly sales.

The goal of warehousing is to keep products safe and readily available while awaiting purchase. You can store products in your own warehouse or one that is owned by a third-party logistics provider. 

2. Inventory management 

Inventory management involves picking, packing, and storing your goods in the right place. Many warehouses have inventory management systems to help with this.

3. Transportation

Next, is the process of shipping products to distribution centers/partners. At this stage, transportation is typically done by big trucks/planes/freights. The long distances and large volumes can be a challenge.

4. Last mile delivery

Last mile delivery is the most important step, and is also the most expensive. This is when your order goes from the distribution center to your customer’s door. This task is typically handled by a large fleet of smaller trucks or vans.

If you sell direct to consumer, for example, from an e-commerce store or catalog, you need to cover these four stages effectively.

From managing the product in your warehouse to preparing the parcel and passing it on to a freight service, and delivering the final goods, every stage impacts whether the order gets to the customer’s door on time. 

Just think of everything that happens behind the scenes so Amazon can offer same-day delivery from online sales. 

What Is the Difference Between Inbound and Outbound Logistics? 

The key difference between inbound and outbound logistics is simple: Inbound logistics refers to all processes related to getting your products from your suppliers and manufacturers — products coming in. It includes sourcing, buying, storing, and distributing goods and supplier returns.

On the other hand, outbound logistics is all about delivering products to customers — orders going out. It includes inventory management, order management, packing, distribution, and more.

An Example of the Outbound Logistics Process

In this section, we will cover an example of an outbound logistics order process.

Let’s examine every stage for an e-commerce company that sells consumer products.

1. Customer places order

The customer places an order for a specific product on your e-commerce site or through your catalog.

2. Order is confirmed, and products picked in the warehouse

The warehouse confirms the ordered products, the workers pick the relevant inventory. If in place, the WMS system adjusts product counts based on the product id or stock-keeping unit (SKU).

3. Order is packed at warehouse

Workers in the warehouse pack the products and prepare them for shipping by moving them to the loading dock.

4. Trucks pick up daily orders

Freight trucks pick up the orders bound for the relevant distribution centers every day.

5. Trucks drive to distribution centers

The trucks drop off the ordered inventory at the closest distribution center to the customer.

6. Delivery drivers pick up orders at distribution centers

Delivery drivers pick up individual orders at distribution centers for their delivery area.

7. The package is delivered to the customer 

The package arrives at the doorstep of the customer, completing the logistics process.

Channels of Distribution

Businesses that don’t sell straight to consumers, don’t handle the entire outbound logistics chain.

If your main distribution channel is a wholesaler or online retailer that fulfills orders, like Amazon FBA, it’s a different story. Your main concern isn’t optimizing each stage of the process. You need to pick reliable wholesalers, distributors, or retailers and develop strong relationships with them.

Work closely with supply-chain partners

The tail end of supply-chain management is a critical part of your outbound logistics. So if you don’t handle everything yourself, make sure you work closely with retailers or third-party distributors.

An excellent example of collaboration is P&G and Walmart’s supply-chain partnership. They share data and coordinate real-time adjustments to meet the changing demands of the consumer goods market.

A good way to kickstart a partnership can be to coordinate advertising efforts. If you show an interest in improving the bottom line for your retailers or wholesalers, they’ll be more interested in your products.

Outbound Logistics and Delivery Directly Impacts the Customer Experience

It doesn’t matter if you sell consumer products or customized solutions for businesses. Outbound logistics plays a big part in customer satisfaction for manufacturers or online retailers.

And 81% of companies single out customer experience as a competitive advantage.

Below, we’ve listed the top three criteria for meeting customer expectations and keeping them happy.

These three areas are essential to meeting and exceeding customer expectations and ensuring return business in the long term.

1. On-time delivery is essential

It’s 2020. With Amazon leading the pack with same-day delivery, you can no longer afford delayed shipments and packages. 

Every hour your package is delayed is another burden on the customer relationship. To succeed in e-commerce, it’s not enough to promise fast delivery, you must keep that promise.

2. Delivering to the wrong address is unacceptable

What’s worse than getting a package late? Not getting the package at all because it was mishandled and sent to the wrong place.

3. The product must arrive in an acceptable condition

If the product is delivered on time, but it’s in an unusable or severely damaged condition, your customer won’t be happy. It’s an even worse experience than a delayed delivery.

If you use a third-party logistics provider, you must pick a trustworthy one.

This article originally appeared on optimoroute.com

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Logistics & Supply Chain

SCG Logistics connects enterprise data & apps with SnapLogic

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SCG Logistics connects enterprise data & apps with SnapLogic. Image: Pexels
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SnapLogic, provider of the #1 Intelligent Integration Platform, announced that SCG Logistics has standardized on SnapLogic’s leading cloud integration platform to support its process automation, data analytics, and digital transformation initiatives. SCG Logistics, Thailand’s leading provider of distribution and transportation management services, has deployed SnapLogic to integrate core operational and analytics systems and automate business-critical processes across the enterprise, enabling the company to provide exceptional services to its customers around the world.

SCG Logistics leverages its efficient management system, extensive business network, best-in-class transportation and warehouse services, and state-of-the-art technology to provide unparalleled service to its customers. The company employs an order management system (OMS) to track and manage sales, orders, inventory, and fulfillment across multiple channels, making it easy to do business with customers via chatbots and other capabilities. The company also integrates internal SCG systems with external client systems, allowing information and process flow to be visualized across the complete value chain which drives competitiveness. In addition, the company relies on advanced analytics and data-driven insights to optimize the supply chain and improve operational efficiency.

SnapLogic is the glue that connects SCG Logistics’ many operational systems and analytics platforms. With SnapLogic as the foundation, seamless business processes and data-driven decisions enable the company to drive innovation, improve service delivery, and enhance the customer experience.

SnapLogic’s Intelligent Integration Platform uses AI-powered workflows to automate all stages of IT integration projects – design, development, deployment, and maintenance – whether on-premises, in the cloud, or in hybrid environments. The platform’s easy-to-use, self-service interface enables both expert and citizen integrators to manage all application integration, data integration, API management, B2B integration, and data engineering projects on a single, scalable platform. With SnapLogic, organizations can connect all of their enterprise systems quickly and easily to automate business processes, accelerate analytics, and drive transformation.

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Logistics & Supply Chain

Oracle launched oracle cloud SCM to empower supply chain industry 

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To help organizations build resilient and agile supply chains that drive innovation and growth, Oracle today announced the latest updates to Oracle Fusion Cloud Supply Chain & Manufacturing (Oracle Cloud SCM). The updates help customers increase collaboration across supply networks, proactively manage supply chain assets, and implement long-term supply chain planning.

“The last 12 months have stretched supply chains to the limit as organizations wrestle with the disruptions of COVID-19, shifting global trade agreements, rapidly changing customer expectations, and numerous other unforeseen circumstances,” said Rick Jewell, senior vice president, Oracle Applications development. “With the new capabilities within Oracle Cloud SCM, we are helping our customers navigate this complexity and build more adaptable businesses that can respond to today’s challenges and whatever comes next.”

With Oracle Cloud SCM, organizations can identify new opportunities, rethink processes, and plan and execute across the entire business. The latest features and capabilities within Oracle Cloud SCM include:

  • Oracle Logistics Digital Assistant: Provides on-the-go access to real-time supply chain information through a conversational interface that responds quickly, improves user satisfaction, and increases business efficiencies. In addition, users can now easily access order status and shipment tracking remotely without having to navigate through the Oracle Transportation Management (OTM) application or understand complicated data mappings. As a result, a supply chain manager can be informed of all in-transit orders and receive timely updates on shipments from anywhere, on any mobile device.
  • Oracle AI Planning Advisor: Uses artificial intelligence capabilities embedded within Supply Chain Planning to display recommendations that optimize new product introduction (NPI) and enable customers to respond to current and anticipated production disruptions.
  • Field Service Preventative Maintenance: Helps organizations improve the customer experience through new preventative service flows and break-fix and installation capabilities that are delivered via Service Logistics Cloud for Field Service.
  • Multi-Tier Supply Chain Collaboration: Delivers improved visibility into upstream supply to increase overall supply chain responsiveness. Oracle Supply Chain Collaboration can now synchronize upstream supply information such as on-hand balances, purchase order details, and work order details from multiple tiers of external organizations. The data is then automatically shared with Oracle Supply Planning Cloud.
  • Planning for Project-Driven Supply Chain: Optimizes supply planning for project-specific material requirements and execution of purchase orders, transfer orders, and work orders—all with project and task references. By matching demand and supply based on flexible rules, customers are able to group projects and plan at the group level when supplies can be combined across many projects.
  • New Channel Revenue Management Capabilities: Streamline and optimize trade programs by enabling organizations to create, resolve, and settle claims for deductions and overpayments. In addition, the new capabilities simplify the export of supplier programs and claims.
  • Cross-Product Procurement Enhancements: Simplify integration with external systems to help customers integrate and extend procurement processes via new and modified REST APIs. In addition, Oracle Procurement Cloud features new deep links that provide easy navigation directly to application pages without using the menu structure. These links can be leveraged in a variety of ways, including in business intelligence reports, notifications, and third-party application pages.

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Logistics & Supply Chain

Warehouse management: Can you afford downtime?

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We aren’t talking about personal downtime here. We are talking about those times where you have hundreds of thousands of dollars worth of products stored. If these products melted, grew mold, or were otherwise damaged – that responsibility falls to you to cover. Your warehouse plays a pivotal and essential role in the supply chain, and if you aren’t ensuring you have taken every precaution possible, you might just find yourself losing out in the long run.

Of course, the first thing that you have is insurance. This will keep you covered for most eventualities. But the real dark horse when it comes to your back-up plan will be your CI Group generator. 

Planning and Preparation

No one wants to think about the disaster moment of the power going out. But there is a relief in knowing you have an industrial generator that can help you handle the situation with ease. The chances of a total power failure from natural disasters or a human-made issue aren’t as small as you might thing. The proactive step to take is to have a back-up generator and knowing how to use it long in advance of anything happening.

Power Outages

It has been reported that blackouts and power outages have been increasing since 2003. In simple terms, this means you are more likely to experience a power outage than ever before. 

Snow, ice, storm hurricanes have caused most of these outages, and other severe weather issues are some of the critical causes of power outages and general power issues. These disturbances will knock the power out to your warehouse. What comes next? The waiting game. How long before you will be back up and running? How long before you are at risk of stock issues?

Basic Generator Tips

You will have to make sure that you choose a generator that is large enough to keep your critical systems running. It is a good idea to work with a provider and let them know what you need so that you can be sure you have a generator that will suit your needs. 

Fuel is going to be a crucial part of the whole operation, and if you hadn’t already thought about now is undoubtedly the time. And in the case of a flood, have you ensured that your generator is built to keep running or at least protected.

Before you call any companies, find out all of your energy usage numbers and the equipment that would be the minimum that you need to have running. This will give them a clear understanding of your power needs. 

The very bottom line is that all businesses are going to be heavily reliant on gas and electricity to keep themselves up and running. These things are even more essential if you have extensive storage facilities that supply pharmaceuticals, hospitals, and food businesses.

And it is impossible to say that your business won’t suffer from a blackout or a power outage, so getting a generator is part of a plan that can keep your business running even in the face of disaster. 

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