Logistics Vs. Supply Chain Management – Alike Yet Different?

Posted by Marian
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Logistics and supply chain management are often used interchangeably. They are often thought of as to mean one and the same thing. However, it can be different as night and day. Read more to uncover their similarities and differences.

Are you confused between logistics and supply chain management? Though these terms and concepts seem similar, they have distinct functions, tasks, purposes, and responsibilities. The lines separating supply chain and logistics management might look blurred, but a symbiotic relationship exists between the two.

Let us compare a supply chain with logistics. A supply chain consists of suppliers, manufacturers, retailers, and wholesalers but does not include specific functions. On the other hand, logistics management is tangible. It consists of the various activities that aid in the smooth operation and the movement of goods within the supply chain.

In simple words, logistics can be termed as a part of supply chain management, whereas supply chain management acts as an umbrella that encompasses all of the processes.

Comparing Logistics with Supply Chain Management

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Are you still confused? Let’s look in-depth at how logistics management differs from supply chain management.

Logistics as a Subsection

As we mentioned earlier, logistics is a subsection of supply chain management. Logistics is an essential part of the supply chain process that helps plan, control, and implement the reverse and forward flow of goods and services. Logistics also ensures proper storage of goods and the exchange of critical information between the manufacturers and the retailers.

One of the main differences between logistics and supply chain management is that logistics is essential for the optimum performance of a supply chain. A supply chain can consist of different logistics companies and processes, but each is responsible for a specific part.

Planning, Implementation, and Control

Logistics providers are responsible for specific tasks in a particular part of the supply chain. Some are listed below.

Logistics management helps with the planning of the movement of goods from one point to another. Other responsibilities include storing goods, providing the correct information to the supplier and retailers, and maintaining the documents.

Logistics management also oversees the movement of goods using various modes of transport and making arrangements for the short-term and long-term storage of goods.

In addition, it controls the movement of goods via tracking, fleet management, and working hand-in-hand with different partner firms within the supply chain.

Management of Goods

A logistics management company ensures the timely delivery of goods by providing efficient transport options. The companies make use of sea, air, and land transport options to move the products efficiently. Some companies even use intermodal transport to move goods quickly by switching between the different types of transportation.

Storage of Goods

The logistics provider also helps store goods until the company finds a buyer or until a retailer needs them. The goods are stored in proper warehouses and facilities until the retailer or a different supply chain needs them.

Distribution of Products to End Customers

A few logistics companies also offer something called the “last-mile delivery.” It includes the planning and distribution of the products to the end customer.

Types of Logistics Organizations

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In-house

A few wholesalers or manufacturers have in-house logistics departments that handle the movement and storage of goods.

LSPs or Logistics Service Providers

LSPs are those companies that manage the flow of products between the manufacturer or the retailer, and the consumer. These companies handle various functions, including shipping, inventory storage, packaging, and undertaking security during shipment.

Third-Party Providers

The third-party logistics providers provide customized services to various clients. They can provide cold storage or specialized transportation services to ensure timely and proper storage and delivery of goods.

Reverse Logistics

These companies specialize in returns and refunds from the end customer to the supplier, retailer, or manufacturer.

Warehouse Providers

A few logistics companies only offer the storage of goods in their warehouse and do not handle the transportation of goods. They only provide warehouse services to wholesalers, retailers, and suppliers.

Courier

These logistics providers are responsible for the last-mile delivery and ensure delivery of the product to the end customer without damage and delay.

To sum it up, it can be said that a logistics management provider is a part of a more extensive supply chain system.

Understanding Supply

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Now that we understand the role and functions of a logistics provider let’s quickly understand what supply chains are.

Supply chains work across various organizations and bring multiple partners together to manufacture, store, transport, and sell products. Other than logistics, it is also used to control numerous other functions involved with inventory and orders. Some of the parts include,

  • Fostering collaborations between different supply chains, ensuring they work together efficiently.
  • Management and placement of orders with manufacturers or retailers within the supply chain.
  • Tracking of shipments and ensuring the flow of goods and orders.
  • Reporting the flow using proper documentation.
  • Identifying various issues within the supply chain and resolving them.
  • Strong supply chain management acts as an added advantage to every firm as it is responsible for growth, success, and increased revenues. At the same time, a logistics company ensures the smooth flow of orders and goods within the supply chain.

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