2.6 Key Terms, References, and Accessibility Descriptions

Key Terms

Logistics: The part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements (CSCMP).

Inbound Logistics: Inbound logistics is one of the primary processes of logistics concentrating on purchasing and arranging the inbound movement of materials, parts, or unfinished inventory from suppliers to manufacturing or assembly plants, warehouses, or retail stores (Wikipedia, 2019).

Outbound Logistics: Outbound logistics is the process related to the storage and movement of the final product and the related information flows from the end of the production line to the end user (Wikipedia, 2019).

Procurement: Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process (Wikipedia, 2022).

Reverse Logistics: Reverse logistics is a type of supply chain management that moves goods from customers back to the sellers or manufacturers (Jenkins, 2021).

Logistic Service Providers: Logistics Service Providers, or 3PL (third-party logistics) providers, are outsource entities shippers leverage to manage a company’s warehousing, distribution and transportation of freight (Young, 2019).

Chapter References

Bhargove, A. (2018). Project Procurement: A Real-World Guide for Procurement Skills (1st ed.). Project Management Institute.

Council of Supply Chain Management Professionals. (n.d.). Logistics. In CSCMP Supply Chain Management Definitions and Glossary. Retrieved May 4, 2022 from https://cscmp.org/CSCMP/Educate/SCM_Definitions_and_Glossary_of_Terms/CSCMP/Educate/SCM_Definitions_and_Glossary_of_Terms.aspx?hkey=60879588-f65f-4ab5-8c4b-6878815ef921.

Council of Supply Chain Management Professionals. (n.d.). Outbound logistics. In CSCMP Supply Chain Management Definitions and Glossary. Retrieved May 4, 2022 from https://cscmp.org/CSCMP/Educate/SCM_Definitions_and_Glossary_of_Terms/CSCMP/Educate/SCM_Definitions_and_Glossary_of_Terms.aspx?hkey=60879588-f65f-4ab5-8c4b-6878815ef921

Dao, N. H. T., Daniel, J., Hutchinson, S. & Naderpour, M. (2018). Logistics and supply chain management investigation: A case study. In Beheshti, A. et al. (Eds.), Service Research and Innovation (pp. 216 – 230). Springer. https://doi.org/10.1007/978-3-319-76587-7_15.

Inbound logistics. (2019). In Wikipedia. Retrieved January 25, 2022, from https://en.wikipedia.org/wiki/Logistics

Jejani, G.R., S, A.T., & Jain, S. (2019). The impact of inbound and outbound logistics on the supplier-relationship management. International Journal of Innovative Research in Science, Engineering and Technology, 8(8). https://doi.org/10.15680/IJIRSET.2019.0808057

Jenkins, A. (2020, December 14). Guide to inbound and outbound logistics: Processes, differences and how to optimize. Oracle Netsuite. https://www.netsuite.com/portal/resource/articles/inventory-management/inbound-outbound-logistics.shtml

Jenkins, A. (2021, January 14). A guide to reverse logistics: How it works, types and strategies. Oracle Netsuite. https://www.netsuite.com/portal/resource/articles/inventory-management/reverse-logistics.shtml

Kim, J. (2021, February 15). Studies on change of logistics concept and introduction to 4PL. East Asian Journal of Business Economics, 9(1), pp. 27-39. http://dx.doi.org/10.20498/eajbe.2021.9.1.27. CC BY-NC 4.0.

Klumpp, M. & Heragu, S. (2019). Outbound logistics and distribution management. In Zijm, H., Klumpp, M., Regattieri, A. & Heragu, S. (Eds.), Operations, Logistics and Supply Chain Management (1st ed., pp. 305-330). Springer.

LINCS in Supply Chain Management Consortium. (2017, March 3). Warehousing operations certification track (Version v2.28). https://www.skillscommons.org/bitstream/handle/taaccct/14296/LINCS%20Warehousing%20Operations%20Content.pdf?sequence=1&isAllowed=y. CC BY 4.0.

Mariadoss, B. J. (2017). Core Principles of International Marketing. Mariadoss on Pressbooks. https://opentext.wsu.edu/mktg360/. CC BY-NC-SA 4.0.

Minner, S. (2019). Inbound logistics. In Zijm, H., Klumpp, M., Regattieri, A. & Heragu, S. (Eds.), Operations, Logistics and Supply Chain Management (1st ed., pp. 231-250). Springer.

Moutaoukil, A., Derrouiche, R., & Neubert, G. (2012). Pooling supply chain: Literature review of collaborative strategies. 13th Working Conference on Virtual Enterprise (PROVE), Oct 2012,
Bournemouth, United Kingdom, pp. 513-525. https://link.springer.com/chapter/10.1007/978-3-642-32775-9_52. CC BY 4.0.

Nokia Corporation. (2020). Company. Nokia. https://www.nokia.com/about-us/company/

Ogar, L. (2017, July 21). The role of transportation in a supply chain. Infoguide Nigeria. https://infoguidenigeria.com/role-transportation-supply-chain/

Outbound logistics. (2019). In Wikipedia. Retrieved January 25, 2022, from https://en.wikipedia.org/wiki/Logistics

Procurement. (2022). In Wikipedia. Retrieved January 25, 2022, from https://en.wikipedia.org/wiki/Procurement

Rushton, A., Croucher, P., & Baker, P. (2014). The Handbook of Logistics and Distribution Management (5th ed.). Kogan Page Limited.

Saglietto, L. (2013). Towards a classification of Fourth Party Logistics (4PL). Universal Journal of Industrial and Business Management, 1(3), pp. 104-116.

Schwarz, L. (2020, August 20). What is order fulfillment? 7 step process and key strategies. Oracle Netsuite. https://www.netsuite.com/portal/resource/articles/erp/order-fulfillment.shtml.

Stephens, M. P. (2019). Manufacturing Facilities Design & Material Handling (6th ed.). Purdue University Press, Indiana.

Swamidass, P.M. (2000). Seven “rights” of logistics. In Encyclopedia of Production and Manufacturing Management. Retrieved January 10, 2022, from https://doi.org/10.1007/1-4020-0612-8_871.

Ting, S. and Cho, D.I. (2008). An integrated approach for supplier selection and purchasing decisions. Supply Chain Management, 13(2) pp. 116-127. https://doi.org/10.1108/13598540810860958.

Tirelli, B. (2021, January 13). Reverse logistics examples | Importance of reverse logistics. Eurosender. https://www.eurosender.com/blog/en/reverse-logistics/.

Williams, L., Burokas, N. & Danielson, R. (n.d.). Introduction to Business. Lumen Learning. https://courses.lumenlearning.com/wmopen-introductiontobusiness/. CC BY-SA 0.0.

Young, A. (2019, June 19th). Logistics Service Provider (LSP) defined in 100 Words [About InTek]. InTek Freight and Logistics Inc. https://blog.intekfreight-logistics.com/logistics-service-provider-lsp-defined

Image Descriptions

Figure 2.2: The figure presents 7 R’s of logistic activities in circles, Each circle representing a each R such as right item, right quantity, right time, right place, right price, right condition and right customer. [Return to image].

Figure 2.3: The image shows a person using forklift to unload goods from a container, representing inbound logistics.

Figure 2.4: The image shows a person using forklift to move goods, representing outbound logistics.

Fig 2.5: The figure categorize inbound and outbound logistics in different columns each representing their own components. [Return to image].

Figure 2.6: This figure outlines the steps involved in logistics cycle starting with International Procurement to Reverse Logistics [Return to image].

Figure 2.7: The image presents different categories of Logistic Service Providers in four quadrants with 1PL on top left quadrant and 4PL on bottom right quadrant. [Return to image].

Alternative Text-Based Activities

Assessing What You Already Know Activity (Text-based)

Question 1

What raw materials furniture manufacturer receives and uses to manufacture finished goods? Check all that apply.

• Wood
• Paint
• Nuts and Bolts

Feedback: A furniture manufacturer uses all of these while manufacturing finished goods

Question 2

What goods a retail store like Walmart receives to sell to their consumers. Check all that apply.

• Finished goods
• Raw material
• Semi finished goods

Feedback: A retail store receives finished goods and in some cases semi finished goods to sell to their consumers.

Question 3

What finished goods does a furniture manufacturer sells? Check all that apply.

• Finished Sofa sets
• Finished Beds
• Nuts and Bolts

Feedback: A furniture store uses wood, paint and nuts and bolts that it received to manufacture finished goods such as sofa sets, beds, tables, chairs etc.

Question 4

What goods does a retail store like Walmart sells? Check all that apply.

• Books
• Grocery Items
• Fruits and Vegetables

Feedback: A retail store will basically sell whatever it will receive. It will not engage in manufacturing or producing goods like fruits and vegetables.

Question 5

On the basis of your previous experiences and knowledge, how would you define the term ‘distribution logistics’?

• Distribution logistics help company’s in managing whatever they receive and sell.
• Distribution logistics help company’s in hiring workforce.
• Distribution logistics help company’s in marketing and selling.

Feedback: Distribution Logistics is a process that help company’s in managing whatever they receive (inbound logistics) and whatever they sell (outbound logistics).

Overall Activity Feedback

While answering the above questions, you got a chance to analyze what a company receives and sells to their consumers. The products a company receives are a part of ‘Inbound Logistics’ and the goods that a company sells directly to consumers or retail stores is a part of ‘Outbound Logistics’. The process of managing Inbound and Outbound Logistics together is called ‘Distribution Logistics’. [Return to activity].

Check Your Understanding: Distribution Logistics (Text-based Activity)

Question 1

Logistics help companies to:

1. Increase efficiency and flexibility and satisfy consumer demands
2. Convert inputs (raw materials) into outputs (goods or services)
3. Reduce efficiency and flexibility

Feedback: Logistics help companies to Increase efficiency and flexibility and satisfy consumer demands whereas manufacturing converts inputs to outputs.

Question 2

It is important for companies to have different distribution plans for different countries because:

1. Different countries have different birth rate
2. Different countries have different dynamics of networks, logistics and market
3. Different countries have different political systems

Feedback: It is important for companies to have different distribution plans for different countries because different countries have different dynamics of networks, logistics and market.

Question 3

The 7 R’s in logistics help organizations by making ______________ visible to top management.

1. Costs in Logistics activities
2. Risks in Logistics activities
3. Value-added component of logistic activities

Feedback: The 7 R’s in logistics help organizations by making Value-added component of logistic activities visible to top management.

Question 4

Logistics may have either an internal focus (_____________) or an external focus (____________).

1. Outbound Logistics, Inbound Logistics
2. Inbound Logistics, Outbound Logistics
3. Downstream, Upstream

Feedback: Logistics may have either an internal focus (Inbound Logistics) or an external focus (Outbound Logistics).

Overall Activity Feedback

Logistics help companies in increasing efficiency and flexibility and satisfying consumer demands. It is important for companies to have different distribution plans for different countries as they may have different dynamics of networks, logistics and market. The 7 R’s in logistics are very important as they help organizations in making Value-added component visible to the top management. Logistics may have either an internal focus (Inbound Logistics) or an external focus (Outbound Logistics) which will be discussed in detail in next section. [Return to activity].

Check Your Understanding: Inbound Logistics (Text-based Activity)

Inbound Logistics focus on incoming goods in the company’s manufacturing unit , warehouse etc. Based on what has been explained above, Can you think of an example of Inbound Logistics ? If yes, write it in the box below. If not,  read through the text again and try again. [Return to activity].

Check Your Understanding: Outbound Logistics (Text-based Activity)

Outbound Logistics focuses  on goods moving out of the company’s  manufacturing unit, warehouse etc. Based on  what has been explained above, Can you think of an example of Outbound  Logistics?   If yes, write it in the box below. If not,  read through the text again and try again. [Return to activity].

Check Your Understanding: Components of Inbound and Outbound Logistics (Text-based Activity)

Question 1

Drag and Drop the components of Inbound and Outbound Logistics in correct Category. Students are given two columns titled Inbound and Outbound Logistics and six components to drop into the correct category.

Question 2

Purchasing of goods or services from international suppliers can be referred as:

1. Material Handling
2. Warehousing
3. Sourcing and Procurement

Feedback: Procurement is the first step a company does when it decides to trade globally. They start exploring suppliers in international markets who can provide them with required materials within desired time frame and agree to work on specified term and conditions. In simple words, they decide to purchase the materials which in Logistics terminology is called Sourcing or Procuring.

Question 3

Material Handling is the function of moving the right material to the right place, at the right time, in the right amount, in sequence, and in the right position or condition to minimize production cost.

1. True
2. False

Feedback: Material Handling is the function of moving the right material to the right place, at the right time, in the right amount, in sequence, and in the right position or condition to minimize production cost.

Question 4

These are the components where Inbound and Outbound Logistics overlap.

1. Warehousing and Transportation
2. Material Handling and Order Processing
3. Procurement and Reverse Logistics

Feedback:

Inbound and Outbound activities overlap during warehousing and transportation components.

Question 5

Reverse Logistics deals with problem inventories only.

1. True
2. False

Feedback:

The process that is employed to deliver goods back to the upstream point is known as ‘Reverse Logistics’. Many companies specifically operate in the area Reverse Logistics.  For instance, GLS Logistics and International Shipping is a courier company that pick up  the products from consumers directly and return them to the seller of any other location.  It not only focus on problem inventories but deals with products such as empty bear bottles being returned to the store for further processing.

Overall Activity Feedback

It is important to understand the activities in Inbound and Outbound Logistics. Procurement or sourcing is also known as purchasing of goods or services from international suppliers. Material Handling is the function of moving the right material to the right place, at the right time, in the right amount, in sequence, and in the right position or condition to minimize production cost. In Warehousing and Transportation activities, Inbound and Outbound Logistics overlap. Reverse Logistics moves the goods or problem inventories from downstream to upstream. [Return to activity].

Check your Understanding: Logistics Cycle and Logistic Service Providers (Text-based Activity)

Question 1

Arrange the logistic cycle activities in correct order:

• International Procurement – 1
• Transportation – 2
• Warehousing – 3
• Order Processing – 4
• Inventory Management – 5
• Shipping and Documentation – 6
• Managing Reverse Logistics – 7

Question 2

Each category of Logistic Service Provider differ on the basis of:

1. Policies
2. Services Provided
3. Owners

Feedback:

Every Logistic Service provider differs based on  services provided. For more details, watch the video describing different categories of LSPs. [Return to activity].