Is Logistics and Supply Chain Management the Same Thing?

Is Logistics and Supply Chain Management the Same Thing?

Occasionally, the phrases logistics and supply chain management are used synonymously. Some argue that the two phrases are synonymous, that supply chain management is the “new” logistics. When the subject was addressed in an Inbound Logistics article, the responses differed according to the supply chain (or logistics) functions handled by a supply chain (or logistics) expert.

Supply chain management encompasses the field of logistics, which is comprised of a variety of sub-processes.

In general, a’supply chain management’ company is a third-party operator that oversees the overall movement of product, whether inbound or outgoing.

Purchasing, materials handling, logistics, transportation, inventory control, and supply chain management have all evolved over time, resulting in the intersection of many of these functional domains. As a result of this overlap, some of these terminology, such as logistics and supply chain management, have become muddled in their definitions.

 

While these two phrases share some characteristics, they are actually distinct concepts with distinct meanings. Supply chain management is an umbrella term that refers to the integration of numerous processes in order to obtain a competitive advantage, whereas logistics is the movement, storage, and flow of goods, services, and information within the supply chain.

 

Supply Chain Management – What Is It?

Supply chain management, as defined by professors at Michigan State University in their text Supply Chain Logistics Management, entails organisations collaborating to connect suppliers, customers, and other partners in order to increase efficiency and provide value for the end consumer. Supply chain management tasks are viewed as strategic decisions in the textbook, as they establish “the operational framework within which logistics is done.”

The efforts of a number of companies working collaboratively as a supply chain assist in managing the flow of raw materials and ensuring the completed goods add value. Supply chain managers collaborate across many functions and organisations to ensure that a final product not only reaches the end user, but also meets all applicable standards. Logistics is a subset of the larger, all-inclusive supply chain network.

 

What exactly is logistics?

Logistics is defined by the Council of Supply Chain Management Professionals as “a process within the supply chain that plans, implements, and controls the efficient, effective forward and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer requirements.”

The purpose of logistics is to ensure that the consumer obtains the intended goods at the desired time and location, in the desired quality and at the desired price. This procedure has two subcategories: inbound logistics and outbound logistics.

 

 

Inbound logistics include all actions relating to the acquisition of items and their subsequent handling, storage, and transportation. Outbound logistics include all actions relating to the acquisition, maintenance, and distribution of goods to the client. Additionally, logistics encompasses tasks such as packing and fulfilling orders, warehousing, managing inventories, and maintaining an equilibrium between supply and demand.

 

Significant Distinction

While the terms should not be used interchangeably, they do complement one another. Without the other, neither process can exist. Here are some major distinctions between the two terms that will assist you avoid conflating them.

 

Supply chain management is a method of connecting critical business operations both within and across organisations to create a high-performance business model that generates competitive advantage.

Logistics is the term used to describe the movement, storage, and flow of commodities, services, and information both within and outside of a business.

The primary objective of supply chain is to achieve a competitive advantage, whereas the primary objective of logistics is to meet customer requirements.

Logistics is a phrase that has existed for a long period of time, having originated in the military, but supply chain management is a relatively new concept.

Logistics is a supply chain activity.

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