Logistic strategies refer to the process of delivering and receiving goods in the most efficient manner while also maintaining a high level of quality services.
In any company, it’s important that each aspect of the supply chain runs smoothly, as a miscommunication or operational failure can affect the entirety of the procedure.
We break down the three main logistic strategies and the role they play in your business.
Three Types of Logistic Strategies
- Inbound Logistics
Inbound logistics focus on the flow of resources that are coming into your business. These resources will then allow you to create the product or provide the service that your company promises.
For example, if you are a car manufacturer, you require windshields, tires, and other car parts to build your product. Inbound logistics is the organized process of getting these items to you.
Inbound logistics is typically the most intricate type of logistics due to the nature of production. Referring back to the example of the car manufacturer, you require numerous smaller parts in order to create one finished product. Managing the procurement of several parts is, therefore, more complex than delivering one finished good.
Working with logistics companies during this stage is a good idea. This allows you to focus more on your core business while the logistics company deals with the inventory, transportation, and warehousing of your required products.
- Outbound Logistics
While inbound logistics focuses on bringing resources into your business, outbound logistics work on delivering finished goods to your customers.
This type of logistics is critically important in e-commerce. Companies like Amazon rely on having satisfied customers, so outbound logistics strives to achieve this. One major incentive to attract customers is same-day delivery. Therefore, distribution and transportation must be incredibly fine-tuned to ensure such delivery is possible.
- Reverse Logistics
Inbound and outbound logistics mark the supply chain from beginning to end. Reverse logistics, meanwhile, accounts for products returning from the customer back to the company. Such instances include defects, recalls, or simple returns.
Reverse logistics considers the potential financial loss that returns present and looks for ways to recover value, whether that be through refurbishment, rework, reuse, or government incentives for recycling programs.
Return policies are also valuable strategies, as it places a limit on long the company is held responsible for its products.
Understanding these types of logistics can allow companies to better work the supply chain and get the most value out of their products.
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