Outbound logistics

From CEOpedia | Management online

Outbound logistics uses a combination of truck and rail transportation to deliver the finished product to retailers. Retailers within a 500-mile radius of the plant typically receive vehicles via truck delivery, and the remaining retailers receive vehicles via rail. Autohauler trucks and trilevel railcars are used to move vehicles. Although the outbound logistics process has not received the same attention and accolades as the inbound process, also employs many innovative practices for finished vehicle transportation[1].

The outbound logistics is an area of big concern for organizations seeking to expand from local to international markets. Company having limited resources, this is a real problem. Both as finance and as competent personnel, are lower than those of large enterprises. There are examples of companies that have made substantial efforts to sell to new market areas, but did not succeed and finally withdrew from the location[2].

Roles in the outbound logistics chain

Outbound logistics is the process related to the movement and storage of products from the end of the production line to the end user. The actors of the supply chain play different roles in the outbound logistics flow. The responsibilities corresponding to the different roles are[3]:

  • Shipper has received an order from a client, and does a logistic request to a carrier for the delivery of that order.
  • Carrier

The Strategic Planner: decides on the services that are offered on the long term, on the use of infrastructure, on the logistic resources to hold and on the client's acceptation conditions.

The scheduler: orders transports to be realized, according to the strategic network and constraints, coordinates with the infrastructure manager and assign logistic requests to those transports such that the delivery requirements are met

  • Infrastructure Manager holds the logistic infrastructure and coordinates with the carrier's scheduler to offer the network for the planned transports.

Heavy Outbound

A chemical company offers a good example of logistics system with a heavy outbound flow. Inbound crude oil by-products, salt water, and other raw materials flow from a limited number of sources and frequently move in volume over relatively short distances. Inbound transportation modes might include motor, rail, ocean, and pipeline. On the outbound side, a wide variety of industrial products are manufactured that need storage, packaging, and transportation (motor, rail, ocean, and pipeline) to the final customer. Therefore, in an organization with a heavy outbound flow, the physical distribution side of the logistics system is more complex[4].

Examples of Outbound logistics

  • Autohauler Trucks: Autohauler trucks are specifically designed to transport large numbers of vehicles from the manufacturing plant to the retailer. Autohaulers are equipped with an automated loading and unloading system, which allows the truck to load and unload vehicles quickly and efficiently. Autohauler trucks typically hold up to 24 vehicles, and can travel up to 500 miles before needing to be refueled.
  • Trilevel Railcars: Trilevel railcars are specifically designed to transport large numbers of vehicles from the manufacturing plant to the retailer. Each car can hold up to 18 vehicles, and the cars can be linked together to accommodate larger loads. The cars are equipped with ramps and tie-downs to ensure that the vehicles are secure during transport.
  • Scheduling & Routing: Outbound logistics also involves the scheduling and routing of vehicles from the plant to the retailer. This is done by creating a network of routes that efficiently transport vehicles to the retailer in the shortest amount of time. This type of routing ensures that vehicles arrive at the retailer in the most cost-effective manner.
  • Cross-Docking: Cross-docking is the process of transferring products from one mode of transportation to another. This process is used in outbound logistics to quickly and efficiently move vehicles from the manufacturing plant to the retailer. In cross-docking, all of the vehicles are loaded onto one truck at the plant, and then unloaded and reloaded onto another truck at a hub before being delivered to the retailer.
  • Automated Tracking: Automated tracking is used to monitor the movement of vehicles from the manufacturing plant to the retailer. This process involves the use of GPS tracking, which allows the outbound logistics team to monitor the location and progress of the vehicles in real time. Automated tracking also allows the team to quickly respond to any issues that may arise during the transport of the vehicles.

Advantages of Outbound logistics

Outbound logistics has several key advantages:

  • It allows for efficient transportation of finished products over long distances. This is particularly useful for businesses that have customers located far away, as it is cost-effective to move their products long distances.
  • It reduces handling costs, as fewer people are needed to transport the goods. This makes it easier for businesses to cut costs, as fewer people are needed for the same job.
  • It ensures products are delivered on time, as delivery times are estimated in advance and delivery vehicles are tracked. This is especially beneficial for businesses that require their products to reach customers quickly and reliably.
  • It allows for quick responses to changing customer demands, as logistics can be adjusted quickly to meet customer needs. This is particularly important for businesses that require rapid responses to customer orders.
  • It allows for increased visibility of the supply chain, as outbound logistics are tracked and monitored throughout the entire process. This is beneficial for businesses as they can ensure products are delivered correctly and on time.

Limitations of Outbound logistics

  • One of the main limitations of outbound logistics is cost. Truck transportation is more expensive than rail transportation, and it can be difficult to find cost-effective solutions that give the desired results.
  • Another limitation of outbound logistics is the availability of transportation options. Many areas do not have access to rail transportation, and some transportation networks may have limited capacity.
  • Another limitation is the time required for transportation. Rail transportation is generally slower than truck transportation, and this can lead to delays in delivering the finished product to retailers.
  • Additionally, outbound logistics can be limited by regulatory constraints. Some countries have strict regulations concerning the transportation of finished products, and this can limit the ability to deliver goods in a timely and cost-effective manner.
  • Finally, outbound logistics can be limited by geography. Some areas may be difficult to access due to terrain or other factors, which can lead to delays and higher transportation costs.

Other approaches related to Outbound logistics

Other approaches related to outbound logistics include:

  • Cross-docking: This is a process of transferring goods from one transport to another without any storage in between. This process is often used to reduce costs and increase efficiency by minimizing the time goods spend in warehouses.
  • Just-in-Time (JIT): This is a method of inventory management that focuses on delivering goods to customers at the exact time they are needed, reducing the need for large inventory stores and associated costs.
  • Automated Shipping: This is a process of using technology to streamline shipping processes, such as selecting the most efficient shipping route and tracking the shipment throughout its journey.
  • Third-party Logistics (3PL): This is an outsourced logistics service that provides customized solutions to streamline and optimize the outbound logistics process, such as warehousing and transportation.

In summary, other approaches related to outbound logistics include cross-docking, just-in-time inventory management, automated shipping, and third-party logistics services, which all focus on increasing efficiency, reducing costs, and streamlining the outbound logistics process.

Footnotes

  1. ↑ R.G. Kasilingam 1999, p.260
  2. ↑ H. Kotzab, J. Pannek, K.D. Thoben 2015, p.429-430
  3. ↑ J. Filipe, J. Cordeiro 2010, p.556-557
  4. ↑ J. Coyle, C. Langley, B. Gibson, R. Novack, E. Bardi 2008, p.63


Outbound logistics — recommended articles
Direct delivery — Public warehouse — Last mile — Regional distribution centre — Logistics service providers — Role of transportation — Last mile delivery — Transit shipment — Added value (logistics)

References

Author: Michał Duch

Retrieved from "https://ceopedia.org/index.php?title=Outbound_logistics&oldid=95028"