If you have searched and landed on this page, then you must be familiar with the terms logistics and supply chain management.
The line separating logistics and supply chain management is blurred, and thus people often think both words are interchangeable.
This is why we came up with this article- Logistics vs supply chain management.
Logistics and supply chain management have a symbiotic relationship with each other. Both have clearly different functions and purposes. Both logistics and supply chain management encompass specialized tasks and responsibilities.
A supply chain is a system of manufacturers, suppliers, retailers, etc. Whereas logistics is a function, it is the activities that are involved in moving goods from one point to the other in a supply chain.
Still confused? Well, you are not alone.
We will be explaining more about logistics vs supply chain management. Read on!
Logistics vs Supply chain management: Definitions
Logistics
Logistics is a subdivision of operations and military science and deals with the ordering, supply, and maintenance of equipment as well as the movement and evacuation of personnel.
In short, the planning, implementation, and coordination of a business or other operation is defined as logistics.
Supply Chain
It is defined as a channel of distribution starting with the wholesale supplier of materials, extending to the manufacturing process, distributors, retailers, and, in the end, consumers.
Logistics vs Supply chain management: Processes
Logistics
- Inflowing and outflowing transit
- Warehousing
- Reverse logistics (goods returns)
- Preventive packaging
- Fulfillment
Supply Chain Management
- Obtaining material
- Supply planning
- Demand planning
- Enterprise resource planning
- Manufacturing
- Inventory management
- Logistics
- Optimization
Logistics vs Management: Purpose
Logistics
The logistics' purpose is to offer in-time delivery for the sake of consumer satisfaction.
Supply Chain Management
The purpose of supply chain management is supply chains because of the primary motive of competitive advantage. This means finding the most efficient and cost-effective methods for everyone working within a supply chain.
Logistics vs Supply Chain Management
Logistics
- Transportation Management System (TMS): A logistics platform that allows consumers to evaluate and administer the everyday operations of their transportation expeditions.
- Warehouse Management System (WMS): The software and processes enable organizations to control and manage warehouse tasks from the beginning- the time when goods enter until they move out.
Supply Chain Management
- Enterprise Resource Planning (ERP): It has a function similar to that of a central nervous system (CNS) for a business. The role is to collect information about the activities and state of various divisions of the body corporate and make it available to others.
- Customer Relationship Management (CRM) Software: It is software that encompasses a wide group of applications, designed to help businesses to manage the processes like customer data, customer interaction, information access, sales automation, and many more.
How Logistics and Supply Chain Management are Similar?
When we are talking about logistics vs supply chain management, then their similarities are a must to discuss.
Both logistics and supply chain management focus on the transportation pathway of goods from the starting point to the end.
Both these processes demand careful coordination of wholesalers, retailers, labor, and facilities so that the items can move through the supply chain.
Logistics is a major element of supply chain management (SCM). But, it’s also just one piece (important piece) of a bigger puzzle.
A few similarities between logistics and supply chain management are:
- Both kingpins of goods, services, or information.
- Both focus on backing the company’s success and differentiating it from other competitors.
- Both aim to increase users' satisfaction
- Both spin around the same transportation pathway of goods and services from retailers to consumers.
Conclusion
Logistics is a decade-old term. It was first used in the military for maintenance, storage, and transportation of army personnel and goods. Nowadays, logistics terms are used in various spheres of life.
Supply chain management was once an addition to logistics, but now both are inseparable.
So, we can say both the terms complement each other. With the help of supply chain management, logistics maintains contact with the transportation, storage, and distribution teams.