Posted in Operations and Supply Chain Terms, Total Reads: 702
Definition: Inbound Logistics
The transportation, storage and delivery of incoming goods into a business is referred to as inbound logistics. It includes essential processes like receiving of materials, storage and distribution of raw materials and final goods, thus forming an integral part of the operations for a firm.
For any business, receiving and storing of raw materials forms the major portion of the inbound logistics. The area allocated for receiving and storing of these raw materials may vary from one firm to another depending on its size. Where on one side, small companies might maintain this area within the manufacturing and production plant, large companies may procure exclusive facilities outside the plant for this purpose. The warehouse staff at these locations is responsible for receiving materials, ensuring accuracy of delivery and organizing it for easy access.
The efficiency of distribution of materials is significantly affected by the materials receiving process. The warehouse staff tracks the materials, loads them, updates the material inventory records and distributes these materials, upon receiving the requests for these materials. Any lag in this process, can lead to significant increase in costs and extremely poor efficiency.
Value chain is a set of sequential activities from the procurement of raw materials to the delivery of final products. Inbound logistics forms the first step of this value chain here. It strengthens the base for development and implementation of further stages of core business activities for the firm. From inbound logistics, the process moves to outbound logistics and then products move into sales, marketing and servicing.