Is Supply Chain Management And Logistics The Same Thing?

Posted by Jerald

Supply chain management and logistics are two words that are often used interchangeably. Some argue that the two words are interchangeable, and that supply chain management is the “new” logistics.

supply chain management and logistics

Many of these functional fields, such as purchasing, materials processing, logistics, shipping, inventory tracking, and supply chain management. They have continued to develop, allowing many of them to overlap. Some of these concepts, such as logistics and supply chain management, have blurred meanings as a result of this intersection.

Although there are some parallels between these two words, they are distinct definitions with distinct meanings. Logistics indicates the movement, storage, and flow of products, services, and information within the overall supply chain. Whereas SCM is an ambient term that ties together various processes for gaining a competitive edge.

What Is The Purpose Of Logistics?

The term “logistics” refers to the process of directing the flow of goods from the supplier to the customer. It encompasses everything from ordering to receipt, storage, picking, and packaging, as well as product release and transportation.

Logistics focuses on the execution and control of operational and cost-effective physical processes associated with the delivery of the company’s goods or services.

What Is The Purpose Of Supply Chain?

Obtaining suppliers, coordinating production and procurement. As well as controlling the flow and level of inventories in the enterprise are all part of the Supply Chain. The market schedule is commonly used in the Supply Chain.

How Do Logistics And The Supply Chain Work Within The Company’s Structure?

Theoretically, logistics management is a branch of supply chain management and operations management.

The name of the function hasn’t changed in many industries, despite the fact that the Logistics team’s resources have increased. In such instances, there is clearly a department that performs all of the “new” duties previously mentioned.

In some businesses, however, Logistics has been converted into a Supply Chain, in which traditional logistics elements. They are warehouse or distribution centre, transportation, and customer service operate.

The internal Supply Chain department collaborates with an operator who conducts “classic” Logistics duties in organisations that have opted to outsource logistics functions.

Separate Logistics and Supply Chain teams have been formed in some businesses. If the company has expanded to the point that it is profitable to establish its own comprehensive distribution network. This sort of differentiation within the company makes sense.

In this scenario, logistics management necessitates an overwhelming percentage of expertise as well as extensive operating budgets.


Important Distinctions

It’s important to note that, while the words aren’t compatible, they do complement one another. It is unlikely for one mechanism to occur without the other. Here are some key distinctions between the two words that will help you avoid conflating the two.

  • Supply chain management is a method of connecting major business processes within and across organisations. To create a high-performance business model that generates a competitive advantage.
  • The movement, storage, and flow of goods, resources, and information inside and outside an organisation are referred to as logistics.
  • The primary aim of a supply chain is to achieve a competitive advantage. The primary goal of logistics is to satisfy consumer needs.
  • Logistics is a term that has been around for a long time, originating with the military. while supply chain management is a newer term.
  • Inside the supply chain, logistics is an operation.

What Does It Mean If We Call A Department In An Organization By A Different Name?

It doesn’t matter what name you call your Logistics department if everything in your organisation runs smoothly and everyone is pleased with it.

If, on the other hand, there are disputes with vendors and consumers. When the stock, and thus the working capital, increase at an alarming rate. If the expected output and supply amounts are inadequate to satisfy demand. It’s time to reshape.

It’s time to start a new Supply Chain role or broaden the Logistics department.

There are different techniques to getting about change initiatives. Each of them, however, stresses the importance of strengthening and promoting new habits. One approach is to give the new way of working a distinct name.

Logistics Management In The Supply Chain

Inventory should be moved and positioned, and its importance in synchronising the supply chain should be understood.

The aim of logistics is to ensure that the customer receives the requested product at the appropriate time and venue, with the appropriate quality and price. Inbound logistics and outbound logistics are the two subcategories of this operation.

Logistics also consists of tasks including shipping and fulfilling orders, warehousing, stock management, and maintaining supply and demand equilibrium.

The tasks involved in collecting materials, handling, storing, and transporting them are referred to as inbound logistics. The functions of storing, maintaining, and delivering items to customers are referred to as outbound logistics.

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