What is the difference between supply chain management and supply chain logistics?
Here’s an easy way to make sense of the differences using an analogy: If the movement of goods were compared to a football game, the supply chain would be like the coach overseeing the field and positioning assets, whereas logistics would be the quarterback who executes moves and adapts to
conditions on the fly. Despite some individuals and organizations using the terms interchangeably, there are further important differences between their individual functions, capabilities, inputs, and outputs of each. Because the global movement of products relies on the underlying principals of sending, receiving, moving, and storing goods, it’s no surprise that the terms “supply chain” and “logistics” have become
conflated and are often confused with each other. Another way to perceive the difference is that supply chains are responsible for the overall sourcing, processing, and delivery of goods to the end customer, whereas logistics focuses on moving and storing goods between different supply chain organizations. The Council of Supply Chain Management Professionals, or
CSCMP.org, describes logistics as: “part of the supply chain process 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’s requirements.” Most importantly, logistics is
a distinct part of the supply chain and essential to good supply chain performance. A supply chain may have many diverse types of logistics and logistics companies to serve specific needs, all of which designed to help the supply chain run smoothly. However, each logistics operation is only responsible for that service with which they have a particular expertise, often making them a self-contained part of the supply chain. Logistics Controls and PlansBecause logistics providers are typically only responsible for their part of the supply chain, they will:
Logistics Moves Goods from Place to PlaceA good logistics management system is all about efficient transport and storage. Logistics providers commonly use a variety of land, air, and ocean assets to move goods as quickly and efficiently as possible. Logistics companies will take advantage of containerization to improve the flow of goods between types of transportation, also known as “intermodal” transport. Logistics Provides Storage of Goods Within the ChainLogistics providers will store goods in warehouses or other facilities as they reach their destination. Using various types of warehousing, they’ll keep goods until they are needed further down the supply chain, which can be another supply chain organization or delivery to an end customer. Logistics Distributes Products to the End CustomerSome logistics businesses specialize in distribution—delivering goods to the final customer, typically known as “Last Mile Delivery” and often including a “Milk Run“. Logistics Organization TypesBasically, if products are being transported or stored, it’s a logistics process. The many types of logistics businesses include:
In summary, logistics is a limited, distinct part of a larger, collaborative supply chain network. The Role of Supply Chains and Management“Supply chain is the entire flow that brings a product or service to sale. Logistics is a segment of that, focused on the transportation and storage of goods.” Joe Couto Supply Chains are the Framework for Sourcing, Manufacturing and Supplying ProductsUltimately, the supply chain represents all the associated connections and collaborations between suppliers, manufacturers, logistics providers, wholesalers, retailers and end customers. The supply chain process starts at the point an organization gets an order for a product or service, and finishes when that product or service is successfully delivered to the end customer. Supply chain management is the function that oversees and coordinates the manufacture, transportation and delivery of goods and services between their origin, and their final destination. Supply Chain Management Works Across Multiple OrganizationsOverall, the supply chain brings together the partners needed to source, manufacture, transport, store, supply and sell goods:
Supply Chains Can Also be Responsible for Other AreasThe overall concept of supply chain management often means controlling other aspects of the order, inventory and supply chain processes:
A well managed supply chain provides a competitive advantage to every organization involved. While the overall supply chain is responsible for marketplace successes and revenues, logistics plays a critical, central role in ensuring raw materials, parts and finished products move fluidly through the global supply chain. Do supply chain and logistics mean the same thing?In summary, supply chains are responsible for the overall sourcing, processing or manufacturing, and delivery of goods from the raw materials to the end customer. Logistics is the business of moving and storing those goods between different supply chain organizations. What is the main difference between supply chain management and logistics?Logistics focus on the efficient and cost-effective delivery of goods to the customer. Supply chain management controls the development of raw materials into finished goods that move from the supplier to producer to warehouse to retailers and/or consumers.
What is the difference between supply chain and supply chain management?A supply chain is one of the core activities of the organization that is associated with the delivery of goods and services to customers. Supply chain management is defined as the management of flow of goods as well services and includes processes involved in transforming raw materials to final products.
|