2.9 Inbound and Outbound Logistics in Lean Implementation
According to Stewart (1998), logistics is the management of the flow of goods, information and other resources, including energy and people between the point of origin and consumption. Staccini et al. (2005) also defined logistics as the integration of information, transportation, inventory, warehousing, material-handling and packaging of goods in an organization. According to Taleghani (2010), there are two types of logistics namely; the inbound and outbound logistics.
Inbound logistics refers to the fundamental business operations in manufacturing firms involving the processes of receiving, storing and distributing raw materials for use in production (Worley snf Doolen, 2006). Inbound logistics is the first stage in any value chain although small firms may not manage as much inventory as large firms. In large manufacturing Companies, receiving and storing of raw materials are immensely undertaken which basically form part of their inbound logistics (Stewart, 1998). These Companies often have separate facilities for storing raw materials and warehouse staff receive materials, confirm accuracy and organize them for easy access. Conversely, smaller firms usually maintain receiving areas within the same plant in which manufacturing and production takes place (Taner et al., 2007).
According to Gayen (2010), the process for inbound logistics involves sourcing, order placement and expediting, vendor supplier, transportation and receiving of goods (see Fig. 2.1). Organization of the material-receiving process is therefore highly significant as it greatly affects the efficiency with which staff distributes raw materials for manufacturing (Worley and Doolen, 2006). Hence, delays in this process as a result of poor organization or response by staff retard company's productivity. Technology has progressively become an essential component in optimizing the efficiency of material inventory replenishment, monitoring and organizing (Staccini et al., 2005).
Fig. 2.1: Process for Inbound Logistics in Lean Implementation. Source: Gayen (2010).
Outbound logistics, on the other hand, is defined as the movement of materials, storing, transporting, and distribution of a firm's goods to its customers (Shukla et al., 2008). The activities associated with the outbound logistics of manufacturing firms includes order selection, order transportation, customer delivery, customer order, order transmission and order processing (Gayen, 2010) as indicated in Figure 2.2 below.
Source: Outbound Logistics in Lean Implementation. Gayen (2010).
2.9.1 Benefits of inbound and outbound logistics
According to Taleghani (2010), there are several benefits derived from proper implementation of inbound and outbound logistics in manufacturing industries of which the most paramount ones have been highlighted below:
1. It ensures that material received as well as related information are processed and swiftly made available to the production, store and other departments.
2. It helps in complete and accurate documentation of goods received in and returned.
3. It ensures that items that were properly ordered and meet purchase order specification alone are accepted by the firm.
4. It safeguards goods received.
5. It ensures that vendor, inventory and purchase order information are accurately updated to reflect receipts and ensures that rejected items are promptly returned.
6. It ensures complete and accurate documentation of all transfers to and from the storage.
7. It aids in proper transfer of all materials requested and maintains safe working conditions and storage of hazardous materials.
Gayen, R. K. 2010. Insight view of inbound and outbound logistics of supply chain management.
Shukla, A. 2006. Proactive People Management one key issue to Lean Success, Plant Engineering [Online], vol. 60, no. 7. Available:http://search.ebscohost.com/login.aspx? [Accessed: February, 2014].
Staccini, P., Joubert, M., Quaranta, J. & Fieschi, M. 2005. Mapping care processes within a hospital: from theory to a web-based proposal merging enterprise modelling and ISO normative principles, International Journal of Medical Informatics, 74(2-4), 335-344.
Stewart, P. 1998. Out of chaos comes order: from Japanization to Lean production: A critical commentary. Employee Relations, 20(3), 213-223.
Taleghani, M. 2010. Success and Failure Issues to Lead Lean Manufacturing Implementation. World Academy of Science, Engineering and Technology, 62.
Taner, T. M. Sezen, B., & Antony, J. 2007. An overview of six sigma applications in healthcare industry. International Journal of Health Care Quality Assurance, 20(4), 329-340.
Worley, M. J. & Doolen, L. T. 2006. The role of communication and management support in a Lean manufacturing implementation. Management Decision, 44(2), 228-245.
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