An Overview of Logistics, Reverse Logistics, and Delivery in Supply Chain Management

While the media’s increased focus on the supply chain has brought the term into the general lexicon, confusion remains about its true meaning and how logistics and delivery relate to one another. Natural disasters, geopolitical risks, and other unforeseen events have made logistics in supply chain management more critical than ever in B2B and B2C fulfillment.

What is Logistics and Delivery?

According to the Council of Supply Chain Management Professionals, logistics is “a part of the supply chain process that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customer requirements.”

Logistics primarily handles the movement and storage of materials used in product creation, while a supply chain refers to the entire network of people and companies involved in creating a product.

Interestingly, the term “logistics” was once mainly used in the military context to describe maintaining an army’s supply lines. Some of history’s most successful military leaders, such as Alexander the Great, Hannibal, and Wellington, were known for creating efficient systems for transporting supplies and weapons to their troops.

Today, the role of logistics is just as important to the success of modern businesses as it was to military campaigns, and cutting-edge logistical technologies are crucial to business operations.

Main Components of Logistics

Logistics is integral to a positive customer experience and ultimately to a business’s bottom line. Each element of logistics must perform at peak efficiency to ensure that the requisite resources are available at the right time. Key components include:

• Inbound Transportation: Refers to the shipment, storage, and distribution of goods from a supplier to a company.
• Outbound Transportation: Involves the flow of finished products from a company to the customer. It includes order receipt, stock verification, and the transfer of products to warehouses or distribution centers for packaging and shipping.
• Warehousing: Involves secure, organized storage of inventory, allowing companies to track key facts like arrival dates, quantity, and location. Strategic warehouse locations are crucial for enhancing customer experience.
• Order Fulfillment: This is the process of storing, packing, and delivering products to customers. This can be handled in-house or outsourced to a third-party logistics (3PL) provider.
• Fleet Management: Deals with the management of transportation vehicles (e.g., trucks, planes, rail cars, ships) that are essential for supply chain operations.
• Inventory Management: Ensures that raw materials and finished goods are available to meet production and customer demand at the lowest possible cost.
• Materials Handling: The physical movement of goods within storage areas, logistics warehouses, or distribution centers, which can be done manually, automated, or semi-automated.
• Demand Planning: Involves forecasting factors like weather patterns, geopolitical risks, or trends that may affect product demand and inventory management.

Reverse Logistics

Reverse logistics refers to the process of handling product returns, essentially reversing the outbound logistics process by returning items from customers to sellers. Returns can happen for various reasons, and efficient reverse logistics is essential to recovering value from returned products.

The five steps in a quality reverse logistics system include:

1. Processing the Return: Initiates once a customer wants to return a product. It involves return authorizations, item condition assessments, and credit processing.
2. Return to Inventory: Returned products are inspected to decide if they can be restocked, refurbished, recycled, or disposed of.
3. Keep Returns Moving: Reduces waste and space by promptly addressing returned items—either by discarding, recycling, or repairing them.
4. Repair: Some returned products can be fixed or refurbished to be resold.
5. Recycle: Goods that cannot be repaired should be recycled responsibly.

Benefits of Reverse Logistics

As ecommerce returns increase, reverse logistics becomes crucial to optimizing profits and managing return challenges. An efficient reverse logistics system enables businesses to minimize returns and maximize the value recouped from returned goods.

Shipping vs. Delivery

Shipping and delivery are often confused, but they refer to different stages in the logistics process.

• Shipping refers to the movement of products from the manufacturer to a distribution center, after which the product is ready for delivery.
• Delivery occurs when the product reaches the customer and is the final stage in outbound logistics.

Types of Delivery Services

3PL providers offer various delivery services, including:

• Standard Delivery: Typically takes 3–5 business days.
• Next-Day Delivery: Often used for quick dispatch after midnight to avoid traffic.
• Same-Day Delivery: Allows orders to be fulfilled and delivered on the same day.

Last Mile Delivery

Last Mile Delivery, or Final Mile Delivery, is the last step in getting a product to the customer. It is the most expensive and time-consuming part of the shipping process, as rural and urban challenges can increase costs and delays. Efficient last-mile delivery is essential for ecommerce success.

Supercharge Your Global Market Expansion with ModusLink

As you explore global markets, ModusLink provides the technology and expertise to overcome the complexities of international ecommerce. Partnering with ModusLink allows you to tap into new revenue streams without having to navigate the intricacies of supply chain terminology or cross-border logistics. We ensure a seamless customer experience (CX) wherever you sell.

Contact ModusLink today for a private consultation with one of our knowledgeable agents.