Outbound logistics focuses on the demand side of the supply-demand equation. The process involves storing and moving goods to the customer or end user. The steps include order fulfillment, packing, shipping, delivery and customer service related to delivery.

Outbound Logistics Activities: 

• Warehouse and Storage Management: A company keeps a certain quantity of goods on hand to meet demand. Outbound logistics processes store these goods securely in the right conditions and organize them. Inbound and outbound logistics overlap in warehouse management. But outbound logistics deals with outgoing finished products. For companies that sell finished products they receive from suppliers, inbound logistics concentrates on product acquisition and outbound logistics fulfills orders sent straight to customers and distributes the products to retail outlets.

• Inventory Management: Software often plays a central role in inventory management, a process that determines the best place to store goods in the warehouse for fast order fulfillment and the order picking and packing operation. Inventory management goals include inventory and order accuracy as well as maintaining product quality by preventing damage, theft, obsolescence or spoilage.

• Transportation: The modes and methods of shipping products vary depending on the type of goods. For example, huge items like heavy machinery may ship in small order quantities by truck. Perishable items like fresh flowers may need to be transported by plane in refrigerated containers.

• Delivery: On-time delivery is critical to success. Moreover, the customer’s order must have the correct items and quantities, and the package can’t get lost or damaged in transit. Outbound logistics takes responsibility for this step.

• Distribution Channels: The ways your product reaches the customer, called distribution channels, affect how you organize outbound logistics. Distribution channels can be broadly categorized into direct (when you sell directly to your customers) and indirect (when you sell through an intermediary such as a wholesaler or retailer). There are many distribution methods, including direct to consumer, value-added resellers, dealer networks, dual-distribution, omnichannel and drop shipping. When choosing distribution channels, consider logistics complexity, cost, speed, quality, customer satisfaction and control.

• Last-mile Delivery: The final step in an order’s journey covers the last shipping leg and delivery. The last mile is usually the most costly and inefficient part of delivery. The term comes from the early days of telephone service, when wiring homes to the mainline was slow and expensive. Last-mile logistics includes services such as home grocery delivery from a local store and package delivery by a common carrier. Before the last mile, shippers can handle lots of orders at the same time in the same way (for example, they can load dozens of orders going to the same city in one truck). But in the last mile, each delivery requires individual handling because it goes to a single address. Deliveries to addresses get spread over a suburban region or packed within a gridlocked city center where parking is difficult—last-mile services account for 41% of overall supply chain costs.

• Delivery Optimization: Optimizing delivery involves not only reducing costs but meeting ever-increasing customer expectations for speed and visibility. Often, these two things go hand-in-hand. Route planning software groups orders more efficiently for delivery, sorts packages by route, plots the best course with an eye to traffic, fuel consumption and other variables, and assigns routes to drivers.