Supply Chain and Logistics Management are Not the Same
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Supply Chain and Logistics Management
Occasionally, the phrases supply chain and logistics management are used synonymously. Some argue that the two phrases are synonymous, that supply chain management is the “new” logistics. It’s unsurprising that the phrases “supply chain” and “logistics” have become synonymous and often used interchangeably.
Logistics is often used to refer to operations that take place inside the confines of a single company, while Supply Chain is used to refer to networks of businesses that collaborate and coordinate their operations in order to get a product to market. Additionally, conventional logistics focuses on inventory management, procurement, distribution and maintenance.
What is Supply Chain Management ?
Supply chain management is the practise of organising and overseeing supply chain activities with the goal of achieving (or maintaining) a competitive edge.
Supply chain management is important to the operations of any firm, including all activities from raw material acquisition to final product delivery. What you need to understand about supply chain management is how it works, the benefits and challenges it brings, and the best practises for more effective supply chain management operations.
SCM (Supply Chain Management) is the process of coordinating the flow of goods and services from the manufacturing of raw materials through their consumption by customers. This technique needs the formation of a network of suppliers (who function as links in the chain) to enable the product’s transportation through each phase.
What is Logistics Management ?
Logistics is the broad term for the process of coordinating the acquisition, storage, and transportation of resources to their ultimate destination. Logistics management include finding potential distributors and suppliers and evaluating their efficacy and reach.
Logistics management is the component of supply chain management that plans, implements, and controls the efficient and effective forward and reverse flow and storage of goods and services
WHAT IS THE DIFFERENCE BETWEEN LOGISTICS AND SUPPLY CHAINS?
The terms Supply Chain and Logistics management should not be used interchangeably. Logistics is a relatively limited notion (narrower than SCM). Supply chain management, on the other hand, is a more complicated category. Supply chain management encompasses logistics and thereby optimises the whole process – not only inside the organisation, but also when interacting with counterparties.
While logistics plays a significant role in supply chain management, it is simply a small portion of a much wider picture. The critical distinction is that, whereas logistics focuses only on supply chain procedures, supply chain management takes a comprehensive and contextual approach.
Consider the following…
“The consumer desires [product],” logistics enquires. How are we going to get it to them?”
Supply chain management is concerned with the question, “How can we enhance our supply chain procedures to provide value to our customers and surpass our competition?”
Logistics are critical to the success of your supply chain management initiatives in general. After all, if your firm is unable to physically transport its goods from point A to point B, it will be unable to thrive as a business.
However, supply chain management entails much more than just delivering your items physically. It entails optimising the interconnected and tangential parts of production, storage, transportation, and fulfilment in such a manner that your organization’s efficiency is maximised and your firm is able to fully flourish.
The objective of effective logistics management is to maximise the company’s competitiveness and profitability, as well as the network topology of supply chains as a whole, including the end user. In this context, the integration and introduction of innovations into supply chain and logistics activities should be directed at boosting the aggregate productivity of all their participants.
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