Downstream logistics

Downstream logistics

What is downstream logistics?

Overall, refers to any logistic activities aiming to provide customers or end consumers with finished products. These logistical operations consist in conveying the products stemming from production to the customer (directly to their home for deliveries to consumer, or to the place where consumers can purchase the product). As such, is different from , which refers to any logistic activities occurring prior to the production process. is also known as distribution logistics.

Within the framework of , the provider in charge of this activity must comply with the customer’s required deadlines and volumes. In an ultra-competitive context, ensures the delivery of a product to the end customer for the best possible price. In more concrete terms, the goal is to offer companies wishing to outsource their activities the best possible value for money, making sure that this downstream service is beneficial both for the company and end customer.

Given the development of the IoT, is undergoing rapid transformations. The optimization of logistic platforms and processes in transport operations have deeply revolutionized . Depending on the type of product and/or service in question, can be broken down into several different logistic circuits.

Specificities of downstream logistics

In-field is divided into several activities:

  • or ;

  • Overpacking;

  • Order preparation, allocation or splitting;

  • Downstream transport.

It should be noted that in , transport can be broken down into several parts - including hauling, and distribution (also known as “last mile transport”).

Examples and practical applications

A company that manufactures furniture for the general public wishes to outsource its entire logistical activity that follows production. To do so, it decides to call upon a showcasing the skills required in terms of . Firstly, the company is asked to determine a strategy concerning several criteria:

  • Furniture stock management;

  • ,

  • Delivering the furniture to the customers’ homes.

Having integrated these components, the offers the company a tailored solution. The solution is based on various networks and/or its own assets. Throughout the entire process, the provider makes sure it complies with:

  • The delivery deadlines set by the company and communicated to the end customer;

  • Service quality (namely delivery);

  • Quality of the goods (in this case, furniture);

  • The regulations in force, namely regarding the transport of dangerous goods.

Furthermore, it undertakes to offer the best price possible for these services.

As for the company, outsourcing its boasts several advantages. It entails:

  • Increased productivity (the company can focus on production);

  • Relying on the know-how and skills shown by a partner specialized in this activity;

  • Simplifying organization;

  • Optimizing costs.

By calling upon an external provider for finished product deliveries, the company however loses its direct link to the end customer. This occurs when delivering downstream to a company (B2B) or the consumer (B2C).