What Is the Difference Between Logistics and Supply Chain Management?
The term “supply chain management” refers to the tasks involved in sourcing, purchasing, converting, and managing logistics. It includes, above all, coordinating and working with parties including suppliers, middlemen, distributors, and clients. Managing products effectively is the focus of logistics management, a tiny subset of supply chain management.
Supply chain management is a more general phrase that refers to the connection between suppliers and the final consumer.
Business practises have changed significantly from many years ago to the present. Technology advancement has facilitated the growth of all important economic sectors. Logistics management has improved throughout the years, and so has supply chain management. To learn the distinctions between supply chain management and logistics management, read this article.
Definition of Logistics Management
Logistics management is the management process that incorporates the movement of commodities, services, information, and money from the procurement of raw materials till it reaches its final user. The goal of this process is to give the final client the appropriate product with the right quality at the right time, in the right location, and at the right price. The two main categories of logistical activity are as follows:
- The activities that deal with material acquisition, handling, storage, and transportation are usually referred to as inbound logistics.
- Outbound logistics: The processes involved in gathering, maintaining, and delivering goods to their final recipients.
Definition of Supply Chain Management
Supply Chain Management (SCM) is the process of managing the transformation and flow of raw materials into completed items up until they get delivered to the final consumer. The success of this chain of operations was the result of the efforts of numerous organisations.
With a focus only on the needs of the customer, supply chain management uses a multi-faceted approach to control the movement of raw materials, works in progress, and finished items both inside the organisation and outside the organisation until they get received by the final consumer.
Key distinctions between supply chain management and logistics
The following are the main distinctions between supply chain management and logistics:
- Logistics refers to the movement and storage of commodities both inside and outside the company. Supply chain management is the mobility and fusion of supply chain activity.
- Complete client satisfaction is the primary goal of logistics. Contrarily, obtaining a significant competitive advantage is the primary goal of supply chain management.
- Compared to logistics, supply chain management is a relatively recent idea.
- Only one component of supply chain management is logistics.
The term “logistics” has a long history and was first used in the military to describe the upkeep, storage, and transit of military personnel and equipment. After the development of the idea of supply chain management, this phrase is now used widely and not just in the military. As a result, they are complementary rather than in conflict. SCM enables Logistics to communicate with the team in charge of transportation, storage, and distribution.