Outbound Logistics
Also known as: Outbound Supply Chain, Distribution Logistics, Customer-Facing Logistics
Definition
Outbound logistics refers to all the processes involved in moving finished products from a business to end customers. It covers warehousing, order fulfillment, shipping, delivery, and related activities that get products into customers’ hands.
Outbound Logistics Activities
Warehousing
- Finished goods storage
- Inventory management
- Pick locations optimization
Order Fulfillment
- Order processing
- Picking and packing
- Quality checks
- Labeling and manifesting
Transportation
- Carrier selection
- Routing and scheduling
- Shipment tracking
- Delivery confirmation
Customer Service
- Delivery notifications
- Issue resolution
- Returns management
Key Outbound Metrics
| Metric | Description | Target |
|---|---|---|
| Order accuracy | % orders shipped correctly | 99%+ |
| On-time shipment | % orders shipped by cutoff | 99%+ |
| Delivery performance | % delivered on time | 95%+ |
| Cost per order | Total fulfillment cost | Varies |
| Order cycle time | Order to delivery time | 1-5 days |
Outbound Cost Components
| Component | Typical % of Total |
|---|---|
| Transportation | 50-65% |
| Warehousing | 20-25% |
| Order processing | 10-15% |
| Customer service | 5-10% |
Outbound Logistics Strategies
Direct Shipping
Products ship directly from manufacturer/DC to customer
Hub-and-Spoke
Central hub distributes to regional hubs, then to customers
Multi-Node
Distributed inventory across multiple fulfillment centers
Store Fulfillment
Retail stores fulfill online orders
Optimizing Outbound Logistics
- Strategic inventory placement - Closer to customers
- Carrier optimization - Right carrier for each shipment
- Process efficiency - Streamlined fulfillment operations
- Technology - WMS, TMS, OMS integration
- Customer communication - Proactive updates
- Returns management - Efficient reverse logistics
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