Explained: Logistics vs Supply Chain

Summary- Supply chain management involves sourcing, manufacturing, processing, and delivering products/ goods to the customers. On the other hand, logistics means moving and storing the products/goods in various supply chain businesses. Let us learn what logistics vs Supply chain is in this blog post.

Logistics and supply chain management possess several similarities, but there exist some significant differences that make them distinctive. Understanding their roles can help companies build operational improvements, develop competitive benefits, and improve customer services on a large scale. 

In this post, let us dig into detail about logistics vs supply chain and find the difference between logistics and supply chain. 

Also Read: <<10 Interesting Questions Related to Supply Chain Management>>

What is Supply Chain Logistics?

Supply chain logistics precisely track the shipping and storage of services and goods throughout the supply chain. The process initiates with raw materials, proceeds with the manufacturing and distribution, and ends with the successful delivery of the product/service to the customers. 

Salient points to consider:

• Supply chain management revolves around competitive benefits. 
• Supply chain management brings the accurate coordination and movements of the supply chains of an organization.
• It is the modernized method of delivering goods/services to all types of end customers.
• It is an extensive term that correlates the connection between the distributors/suppliers and high-end customers.
• Supply chain management SCM is a series of internally connected activities such as moving raw materials to finished goods until it is delivered to the end-user
• If executed properly, Supply chain management and logistics both can offer incredibly competitive benefits to the companies. 

What is Supply Chain Management?

It embraces the activities to create final goods from raw materials and then deliver them to the consumers. 

If you want to refine and optimize supply chain management in your business continuously, it is critical to have visibility throughout the supply chain. This would help organizations track every movement of services and goods through every stage of the supply chain. It makes it simple to follow whether everything is running as per the plans. Moreover, if there are any disruptions or obstacles midway through these operations, then SCM allows decision-makers to take enough time to reply back. 

Also Read: <<What is the correlation between Supply Chain Management Software & ERP Solution?>>

What are Logistics? 

Logistics embraces executing and planning the storage and shifting of goods between various points in the supply chain. It also includes coordinating people, facilities, and other resources to ensure that the products are moving and there is enough required space for them to store at the next centre. What more falls under the term logistics include transport, fleet management, material handling, demand planning, and order fulfilment. 

Logistics vs Supply Chain In Short 

SCM is nothing but a high-standard process that involves sourcing and purchasing raw materials and then generating completely finished goods. It leverages logistics to execute the delivery of goods to the customers. It also emphasizes developing supply chain functions that can benefit not only the business partners but also the customers. 

Supply chain management SCM helps set routine logistics activities in warehouses, factories, local shipping stores, etc. 

On the other hand, logistics is one facet of the supply chain that delivers and stores final goods/products to the customer irrespective of manufacturer, consumer, and distributor. Its prime aim is to deliver goods/products on time to consumers at an affordable price. 

Why is Logistics so crucial for Supply chain management? 

In supply chain management, logistics looks after the proper movement and storage of services/goods, documents, and reports that files every activity across the product journey to the customer. Logistics include different transportation methods that take inventory from one level to another level. It is one of the aspects that check out where the goods can be stored and what strategies are required for efficacious supply chain management of the business. 

Learning logistics vs supply chain is essential for businesses. So, let us have a quick look at some prime aspects of logistics that support the supply chain at its best-

• Delivering the right goods/products at the appropriate time 
• Retaining consumers and adding value to loyalty
• Offering unique value for businesses
• The decreasing cost and increasing efficiency of the process
• Providing a proper means to deliver goods from the most feasible location for manufacturing to the consumer’s location

Supply chain management and logistics focus primarily on good product flow from the starting to end. However, these concepts need precise coordination of labour, facilities, and supply so that products move in the appropriate place and time. 

Also Read: << Top inventory management techniques SMEs must follow>>

Let’s see the significant difference between logistics and supply chain management i.e. logistics vs supply chain now.

Logistics is one of the factors of SCM. SCM includes various activities such as inventory planning, production planning, facilities & material management, labour planning, delivery of goods/services, and manufacturing.

Logistics emphasize cost-efficient product delivery to the customers, while supply chain management manipulates the overall development of raw materials in final products. These products are sent from the supplier to the manufacturer, to the warehouse, and finally to the consumers/ retailers. 

Logistics term was introduced with the military long back when Alexander the Great was born in 356 B.C. He was considered as a logistics master. On the other hand, the advanced practice of SCM was initiated in the 20th century. He was logistician Keith Oliver who introduced the concept of supply chain management in the 1980s.