What is an Outside-In Supply Chain? - Talking Logistics with Adrian Gonzalez (2023)

FAQs

What is an Outside-In Supply Chain? - Talking Logistics with Adrian Gonzalez? ›

An outside-in supply chain is strategic, focuses on what matters for the customer, and creates a successful and collaborative partnership that adds real value over time.

An outside-in supply chain is strategic, focuses on what matters for the customer, and creates a successful and collaborative partnership that adds real value over time.

Supply chain logistics coordinate the storage and shipping of goods and services across the supply chain. The practice begins with raw materials, continues on to manufacturing and/or distribution and ends when a business delivers finished goods to the customer or when products are returned to their final destination.

Reduce overall costs

When not done right, logistics costs can add up quickly. By outsourcing the supply chain, you can worry less about managing logistics systems yourself while benefiting from lowered fulfillment logistics costs, including warehousing, fulfillment, and shipping fees.

The three major functions that are critical to the success of logistics operations are transportation, warehousing, and inventory management.

An example of an outside-in business would be an electronics store that offers integrated support services for all of its brands.

The Outside In strategy takes customer value as its starting and end point. Companies using this approach are focused on creating and nurturing their customers by providing high calibre customer value. They put themselves in the position of their customers, and view themselves from their perspective.

The basic difference between Logistics and Supply Chain Management is that Logistics management is the process of integration and maintenance (flow and storage) of goods in an organization whereas Supply Chain Management is the coordination and management (movement) of supply chains of an organization.

Some common outsourcing activities include: human resource management, facilities management, supply chain management, accounting, customer support and service, marketing, computer aided design, research, design, content writing, engineering, diagnostic services, and legal documentation.”

The terms “outsourced logistics” and “third-party logistics” are roughly interchangeable — they refer to the same thing. Outsourcing logistics is when a company uses an external provider (aka a third-party) to handle various supply chain functions.

What is supply chain in simple words? ›

A supply chain is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product. A supply chain encompasses everything from the delivery of source materials from the supplier to the manufacturer through to its eventual delivery to the end user.

So, what are the 7 Rs? The Chartered Institute of Logistics & Transport UK (2019) defines them as: Getting the Right product, in the Right quantity, in the Right condition, at the Right place, at the Right time, to the Right customer, at the Right price.

A major element of logistics that most will recognise is transport. This includes all modes of transport including road vehicles, freight trains, cargo shipping and air transport. Without transport, goods would be unable to move from one stage to another within a supply chain.

A logistics company is an entity that designs, controls, and manages another company's supply chain. The logistics company can operate during supply procurement, storage, transportation, order fulfilment and distribution, depending on the commercial agreement between the two involved parties.

The Inside-Out approach is guided by the belief that the inner strengths and capabilities of the organisation will make the organisation prevail. The Outside-In approach is instead guided by the belief that customer value creation, customer orientation and customer experiences are the keys to success.

If you want to take an outside-in approach to strategy you must be willing to continuously invest in learning about and from your customers and to translate this knowledge into initiatives that will enable you to gain a competitive advantage, improve your market position and ultimately your shareholder value.

With the outside-in strategy, you first observe what the customer wants, then find and offer the solution. In the inside-out strategy, however, you first develop the product or service, then you create desire for it in customers.

An outside-in perspective means that companies aim to creatively deliver something of value to customers, rather than focus simply on products and sales.

The outside-in approach is the belief that customer value creation is the key to success. This is elementary in the world of Product—look at your customers' unrealized needs and translate them into solutions that will serve them.

An outside-in organization creates processes and organizational structures that let designers, product managers, engineers, marketers, and others orient their viewpoint as if they were a customer looking in at the organization's products.

What are the four 4 types of major logistics functions? ›

The four functions of marketing logistics are product, price, place and promotion.

Planes, trains, cargo ships, and even the 18 wheeler you get stuck behind on your commute to work are all a part of the logistics supply-chain that help deliver the Prime package to your door or your coffee shop's inventory to their store.

Supply chain has broader scope than logistics: Supply chain is about creating an uninterrupted, cost-effective flow between consumer demand and the delivery of finished goods. Logistics is about planning and organizing operations to ensure supply chain and commerce processes run smoothly.

Both are important functions in supply chain management. Procurement is the process of sourcing goods (e.g. raw materials, components, finished goods) and services whereas Logistics includes transport, warehousing and added value services - end-to-end, from extraction to factory, to delivery, to maintenance and return.

Supply chain managers work across multiple functions and companies to ensure that a finished product not only gets to the end consumer but meets all requirements as well. Logistics is just one small part of the larger, all-encompassing supply chain network.

Logistics deals with the movement of goods from a single company's perspective, meaning the movement of materials and goods one company receives and manages internally as well as when it moves those goods to a customer.

What is the most frequently outsourced logistics function? ›

Shippers most frequently outsource domestic transportation, warehousing, international transportation, customs brokerage, and freight forwarding. Less frequently outsourced activities continue to be those that are more strategic and customer-facing.

Outsourcing is the business practice of hiring a party outside a company to perform services or create goods that were traditionally performed in-house by the company's own employees and staff.

The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.

An example of a supply chain in the food industry includes farming, manufacturing, packaging and transporting food products. By managing the supply chain effectively, companies reduce production costs, avoid shortages of raw materials and deliver products to customers timely.

What is 5S? 5S corresponds to five Japanese words (Seiri, Seiton, Seiso, Seiketsu, and Shitsuke) that characterise the various actions as Sort, Set in order, Shine, Standardise, and Sustain.

The roles of logistics feature transportation/delivery, storage, packaging, cargo handling, distribution processing, and information processing, and many systems have been put in place to deliver products from the production location or factory to the consumer quickly and on time.

What are the basic concepts of logistics? ›

Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and occasionally security. Logistics is a channel of the supply chain which adds the value of time and place utility.

Logistics management refers to the acquisition, storage and transportation of inventory from its origin to its destination. It involves maintaining the inventory, resources and related information, and getting the goods to the right location at the right time and to the right customer.

Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers.

A 3PL (third-party logistics) provider offers outsourced logistics services, which encompass anything that involves management of one or more facets of procurement and fulfillment activities.

Integration, operations, purchasing and distribution are the four elements of the supply chain that work together to establish a path to competition that is both cost-effective and competitive.

The Inside-Out approach is guided by the belief that the inner strengths and capabilities of the organisation will make the organisation prevail. The Outside-In approach is instead guided by the belief that customer value creation, customer orientation and customer experiences are the keys to success.

It might be inside-out thinking when there's a conscious decision to make process, policy, people, systems, or other changes that: Don't improve the customer experience at the same time. Are about maximizing shareholder returns, not about benefits for the customer.

Introduction to the four Cs of supply chain management : chain structure, competition, capacity and coordination.

The Top-level of this model has five different processes which are also known as components of Supply Chain Management – Plan, Source, Make, Deliver and Return.

What are the 4 C's of supply chain integration? ›

Our framework encompasses four main configurations – the communicative, coordinated, collaborative, and co-opetitive – and we refer to these as the 4 C's in supply chain management.

There are three levels for logistics decision: strategic, tactical, and operational.

Generally the key aspects of Supply Chain management are Purchasing (sourcing), Planning (scheduling) and Logistics (delivery). Sometimes logistics is separate, and procurement may be included with Purchasing, depending upon how location specific the procurement activities are.

“Inside” refers to the space that is contained within the boundaries of an object, such as the inside of a house or the inside of a box. “Outside” refers to the space that is outside the boundaries of an object, such as the exterior of a house or the outside of a box.

Most of our thinking is "inside-out," meaning that we start with an issue as we or others see it at first and then explore solutions within that initial mental frame. Outside-in thinking, by contrast, means seeing the issue always from multiple perspectives.

Actors who work inside-out usually benefit greatly from being physical, because it brings about more discoveries and helps them get out of their head. Actors who work outside-in benefit from being encouraged to make strong choices supporting their physicality.

An inside-out approach starts with what an organization already possesses before looking at anything else. It assesses as an organization's core competencies, talent, resources, customer relationships, and networks and how these could be leveraged.