Why is Logistics a Critical Component of Supply Chain Management?

Why is Logistics a Critical Component of Supply Chain Management?




Supply chain planning has become more complicated than at any point in history. To fulfil customer demand, corporate executives must understand the vital nature of one supply chain component: logistics management. Logistics is the component of the supply chain that is responsible for managing the forward and reverse flow of goods, services, and associated information between the point of origin and the point of consumption in order to meet client requirements. Advanced logistics, lean management, and optimization all contribute to the creation of the most efficient, cost-effective, and long-lasting supply chains.

 

To maximise the benefits of well-managed logistics, it’s necessary to grasp the field’s history and its broader integration into supply chain management, a relatively new phrase.

What is the difference between supply chain and logistics management?

 

With its origins in 1940s and 1950s US military operations, logistics as a corporate idea and academic topic evolved in the early 1960s. Logistics was originally used to refer to the physical distribution of resources. Businesses and academic studies realised the relevance of supply chains on efficiency and profit margins throughout the subsequent decades.

 

By the turn of the twentieth century, logistics had been characterised as an early “boundary-spanning” role, implying that someone working in logistics would frequently collaborate with other departments to improve an organization’s overall functionality. A logistician’s responsibilities may include strategic planning, marketing, and accountancy. Over time, these logistician responsibilities were absorbed into the newly created post of “supply chain management.”

 

The Council of Supply Chain Management Professionals describes logistics as a subset of supply chain management at the moment. Supply chain management entails the planning and control of a number of supply and demand-related factors. Industry leaders optimise their supply chains and remain involved throughout the customer satisfaction process. Additionally, they uphold moral commitments and address supply chain developments, such as sustainable sourcing and carbon reduction. More precisely, logistics is the component of supply chain management that plans, implements, and oversees the movement of goods and services.

 

Nonetheless, responsibilities in logistics, supply chain, operations, and manufacturing frequently overlap in many businesses. They have become interchangeable in casual usage as they have all been absorbed into the bigger division of supply chain management.


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