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What is Internal Logistics: Importance, Elements and Examples

What is Internal Logistics

What is Internal Logistics: Importance, Elements and Examples | Image Source: Google Images

If you are wondering what internal logistics is and what role it plays in guaranteeing the supply chain in any company, in this article we will tell you everything you need to know about it.

What is internal logistics?

To answer what internal logistics is, it is necessary to first understand what logistics is in general. We talk about logistics to refer to the set of processes and operations that allow the development of the flow of materials and products throughout the supply chain. For its part, to talk about what internal logistics is is to refer to the part of logistics that takes place within the company itself. In contrast, we speak of external logistics when logistics processes and flows take place outside the company itself.

Both internal logistics and external logistics are two basic logistics concepts and fundamental in the supply chain as a whole. In this way, both are key elements for a company to have comprehensive logistics that fully supports operational processes.

Read also: Outbound Logistics: What Is It and What Is Its Importance?

Importance of internal logistics

Now that we know what internal logistics is, it is worth asking why it is important and how it influences the production process as a whole.

The importance of internal logistics is that it allows the supply of materials and products to all operational units within the production chain of the same company. In other words, the importance of internal logistics lies in the fact that it is what allows the entire production process to function in an orderly and coordinated manner, guaranteeing the internal supply chain and that each of the production phases is carried out avoiding shortages. or bottlenecks in the process.

Elements of internal logistics

There are different elements of internal logistics that can vary within a production chain according to their own characteristics. However, in most cases, we can talk about at least 5 types of internal logistics elements that will always be present in any example:

Technical data: it is the information that must be processed in order to know and manage the internal logistics process.
Personnel: is the set of workers who act to carry out internal processes. For example, the operations manager.
Facilities: it is the space and machinery that allows internal logistics processes to be carried out. This includes, for example, everything related to warehouse and logistics.
Training: includes all the training of personnel that trains them to carry out their work efficiently.
Computer resources: it is the set of software that allows the management of technical data. That is, logistics information systems.

Internal logistics activities

Internal logistics activities are varied and, according to each production process and company, they can vary and adapt to specific conditions. However, there are 3 internal logistics activities that will always be present in any case:

Warehouse management: refers to everything related to storage logistics.
Coordination of information flows: it is one of the essential activities, and is usually carried out by the logistics coordinator.
Internal transport of materials and products: the internal transport of materials and products is what allows all the elements of the production chain to work efficiently and in coordination with each other, and constitutes one of the main objectives of logistics.

Examples of internal and external logistics

You can find various examples of internal and external logistics that help to understand the functions of each of them and their differences:

Example of internal logistics

One of the easiest examples of internal logistics to understand is the need to transport materials from one place to another within the production space. For example, the transport that is carried out of the materials throughout the transformation process that allows them to be manufactured for their subsequent sale.

On the other hand, once products have been manufactured, they need to be stored until they are shipped and distributed to buyers. This storage process is also one of the best examples of internal logistics that all companies dedicated to the production of consumer goods must carry out.

Example of external logistics

When it comes to talking about examples of external logistics, we can find them both before and after the materials are transformed at the production site. For example, the supply of raw materials for a factory is an external logistics task. However, when raw materials have been transformed and turned into manufactured products and leave the factory to be distributed and sold, we are also facing one of the main examples of external logistics.

These examples of internal and external logistics are common to most companies, since they are particularly general and necessary in any production chain and subsequent supply to consumers.

Outbound Logistics: What Is It and What Is Its Importance?

All about outbound logistics

Outbound Logistics: What Is It and What Is Its Importance? | Image Source: Google Images

In the supply chain, the outbound logistics phase, also known as distribution logistics, is when the product is delivered to the location where the client wants it. This accomplishment is the outcome of a strategy that benefits the consumer as well as the processing and shipping of the goods. Distribution channels are connected to outbound logistics. Specifically, the frameworks developed to facilitate the sale of the goods and their delivery to the final customer. This phrase is also used to refer to the so-called “last mile logistics,” though. It is the final step in the distribution process and is given more and more weight in the logistics plan of the company.

Read also : Inbound Logistics: Everything You Need to Know

Outbound logistics functions


The phase of supply chain management known as outbound logistics is in charge of getting the goods to its customer. In actuality, this destination could be the final consumer, a different corporation, or a business. It’s crucial to remember that logistics don’t just apply to transportation. Outbound logistics also covers additional tasks even though transportation is a crucial component. A mong these:

  • Choose the packaging’s type and size. As part of supply logistics, the business receives goods from vendors. On the other hand, at the distribution stage, the company turns into a supplier to its clients. One of the specifications in this field is that the goods must reach the customer in good shape. Determine the vehicles used to convey the goods. One must first take into account the unique characteristics of the merchandise. On the other hand, vehicles’ types, speeds, adaptability, and sizes.
  • Distribution areas. The distribution area, a key component of outbound logistics, affects costs in many ways.

Although outbound logistics covers a wide range of other topics, the aforementioned three roles are interconnected. Additionally, all of the other participants in the chain will take into account the decisions the organization makes in this regard.

Outbound logistics challenges

a logistics truck

Outbound Logistics: What Is It and What Is Its Importance? | Image Source:

The major goals of distribution in the logistics industry are to ensure maximum customer satisfaction while maintaining dependability and flexibility of delivery with optimal profitability.

When put that way, it sounds easy. But reaching these goals requires dealing with a number of difficulties:

  • Plan the transportation modes and routes between the production and the demand or delivery sites.
  • Flexible storage is a must. Demand and supply frequently do not match up in time.
  • Sync up the quantities being provided and received. The business must come up with a way to serve diverse clients in partial quantities.
  • Ensure that whole assortments may be delivered to certain recipients. The delivery of specific items from the various manufacturing points to one or more clients must be ensured by outbound logistics.

Source of:

Distribution logistics, also known as output logistics, is a method for organizing, carrying out, and managing the flow of commodities over a period of time and space.

For this, it is vital to ensure communication and information exchange between suppliers and customers, as well as to have detailed information flows.

In essence, a system for the exchange of goods and information between various companies is the foundation of outbound logistics. Designing a logistical channel from supplier to client that operates profitably and achieves predetermined goals is thus a significant problem.

Distribution logistics models

Let’s talk for a brief while about the many models that are used to create an outbound logistics system.

Decentralized: The industrial sector’s most popular. It is based on distribution facilities or warehouses located closer to final consumers.
Centralized: It enables distribution route planning and lowers costs compared to the prior paradigm.
Cross docking: It involves a quick movement of goods from the supplier to the customer rather than any product storage.
Consolidation platform: A strategic cooperation for the distribution of goods from several suppliers.

Are you looking for outbound logistics solutions for your business? The experts of logistics in Canada have more proposals.

Was this knowledge useful? Send us your feedback in the comments!

6 Benefits of Using an External Warehouse

External Warehouse

6 Benefits of Using an External Warehouse | Image Source: Flickr

One of the best options for businesses trying to streamline storage and logistics to offer consumers speedier service is an external warehouse. These areas have grown with the growth of electronic commerce and the emergence of more businesses that need to increase their storage capacity.

The external warehouses are in charge of managing and controlling the stock in addition to receiving and shipping orders and storing the goods, saving businesses from having to invest in their own warehouses. Its primary benefits are as follows:


Benefits of an External Warehouse

1. Cost optimization

Owning your own warehouse requires a significant financial and time commitment.

By avoiding the need to invest in these areas, warehouse outsourcing transforms what would be fixed expenditures into variable costs that may be adjusted based on the level of business. The same may be said for time spent looking for a warehouse, recruiting specialist staff, exploring technology, modifying facilities, etc.

2. More technology

An external warehouse that oversees the products of multiple clients has more money to invest in cutting-edge automations and technology than a small, in-house warehouse. The WMS software (Warehouse Management System), merchandise identification systems (by barcode or by radio frequency), shipping order traceability systems, alert systems, and interaction with other systems, such as the customer’s ERP, are some of the fundamental components of the warehouse.

A customized dashboard can also be set up by an external warehouse so that the client can track the selected metrics and/or provide ad hoc reports. As a result, the client continues to be aware of the warehouse operations.

3. Management experience

Many businesses who are just getting started are able to benefit from this experience thanks to the assistance of an outside warehouse. By doing this, they avoid having to deal with the common mistakes made by individuals who are new to the field and begin from a favorable position.

4. Strategic location

External warehouses are placed in strategic locations to speed up transportation. To speed up the process, they are typically situated in regions with good road links and near proximity to major cities.

5. Security and error prevention

An external warehouse is equipped to handle the requirements of many different types of goods and has the knowledge and experience to identify potential pitfalls and mistakes in advance. Additionally, they use surveillance tools to guarantee the integrity and security of the shipment.

6. Added value

Utilizing an outside warehouse service that adds value to your business, such as solidarity value, is an option.


Why You Should Hire Us for Your External Warehouse Needs?

External Warehousing

6 Benefits of Using an External Warehouse | Image Source: Flickr

You can manage your inventory with the utmost flexibility using the logistics service of 3PL Links. This service offers personalized attention, a thorough approach, and consulting, supply, storage, order preparation, industrial handling, transportation, distribution (possibly with a sustainable and inclusive last mile), reverse logistics, and customer service.

Ask for more details, and we’ll explain what we can do for your business. We are backed by our more than 25 years of expertise dealing with prestigious organizations like Toronto Steel Buyers & Associates, Food and Beverage Ontario, Toronto Transportation Club, etc.

Visit contact us.

Inbound Logistics: Everything You Need to Know

A board saying logistics

Everything You Need to Know About Inbound Logistics | Source: Picpedia

The tasks associated with the delivery of raw materials are handled by inbound logistics or supply logistics to guarantee their availability throughout the production process. Given that it is a subject that every businessperson should be knowledgeable about, it is a crucial logistics function in the supply chain. We will address the following topics in this article:

  • Inbound logistics definition and significance.
  • Duties of inbound logistics.
  • Identifying traits of effective incoming logistics.
  • Components of the inbound logistics.
  • Advantages of correctly applying this form of logistics.
  • Strategies for efficient inbound logistics that you can use in your business.

We also remind you that you can leave us your questions or contributions concerning the entry procedures in the comments area if this information is helpful to you and other entrepreneurs who require it.

What exactly are inbound logistics?

Supply logistics, which encompasses all tasks involved in receiving goods, is in charge of making sure that raw materials are affordable and readily available in accordance with the company’s production needs.

Inbound logistics functions

Supply logistics’ primary functions are:

Relationship with suppliers: To establish the terms of raw material deliveries, suppliers are bargained with in a way that benefits both parties.

Stock planning: Stock planning is the process of choosing the right amount of inventory to keep on hand given production demands and consumer demand. It also involves deciding when to place a new order to maintain product traceability.

Inventory control: Managing storage procedures to reduce time, resources, and expenditures.

Importance of inbound logistics

The supply logistics of a company is important because:

  • It handles the products’ receipt in an appropriate manner.
  • The forecasting of demand is also improved.
  • Additionally, it makes it easier to choose a model from the inventory.
  • Allows for performance analysis.
  • Manage the supply flow effectively.
  • The traceability system is also defined.
  • Lastly, communicate information instantly.

Elements of inbound logistics

These are the fundamental elements of supply logistics:

Supplier: Companies in charge of supplying raw materials are known as suppliers.
Warehouses: Areas used to store sufficient quantities of goods.
Transport: They are in charge of moving the goods from the warehouse to the relevant stage of the production process.

Inbound logistics characteristics

Here are the aspects that characterize supply logistics:

  • Pick vendors who provide better supply conditions, better raw material quality, and more affordable costs.
  • Makes sure delivery deadlines are met.
  • Adequately handles warehouse control and inventory management to maximize the use of resources.
  • Takes into account the demands and wants of both the company’s primary market and its area of production.

Inbound Logistics Benefits

Efficient supply logistics provides three main benefits to companies:

  • Processes are carried out according to schedule, thanks to the timely availability of raw materials.
  • Cost savings through supplier negotiations.
  • The company’s productivity and profitability will rise as a result of good supply chain operation collaboration.

Inbound Logistics Strategies

Inbound Logistics Management

Everything You Need to Know About Inbound Logistics | Source: Picpedia

We present some of the most effective strategies to improve the performance of supply logistics in companies:

  • Vertical integration: In this situation, a backward vertical integration method would be used. This technique entails purchasing the primary raw material source in order to have more control over supply.
  • Outsourcing: Delegating the duties of incoming logistics to a professional outside the firm is known as outsourcing.

Examples of Inbound Logistics Strategies

The Spanish clothing retailer Zara is one of the organizations that best demonstrates the backward vertical integration strategy. Zara was in charge of purchasing from its primary fabric supplier in order to have better supply control and to improve the performance of the manufacturing.

How to achieve adequate inbound logistics?

Here are some tips to improve your company’s supply logistics:

  • The first step is to improve connections with suppliers.
  • The second step is to evaluate market demands in order to develop logistical strategies.
  • Structure and organize the warehouse’s spaces after that.
  • Then it defines a stock area for items with a greater turnover rate.
  • It’s crucial that you make sure the goods are stored at the warehouse for the least amount of time feasible.
  • Finally, put controls in place to prevent mistakes.

Now, we can conclude that:

  • Conducting operations connected to the supply of raw materials constitutes inbound logistics.
  • The major duties of supply logistics include relationship with suppliers, stock planning, and inventory monitoring.
  • Selective, effective, efficient, and analytical skills are necessary for excellent incoming logistics.
  • In order to implement inbound logistics, suppliers, warehouses, and transportation are essential components.

It’s time to put everything you’ve learned in this article into practice to enhance your company’s inbound logistics and make it easier for production goals to be met, which will boost output and profitability.

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