All about Logistics and Supply Chain Management

Supply Chain Management (SCM) is all about the high-level processes that are involved in sourcing as well as buying raw materials and creating finished goods. Supply Chain Management leverages logistics for delivering goods to the end user, however it strives to improve the bottom line and provide competitive edge to a business.

In comparison to logistics, supply chain management sets the strategy of daily logistics activities and directs the activities performed in factories, local shipping centers, warehouses, and other facilities. Logistics, on the other hand, is an aspect of the SCM that warehouses and delivers finished goods/services to the customers (distributors/consumers/manufacturers). Logistics strives to get goods & services delivered to the customer at competitive rates and right on time.

Is there any similarity between SCM and logistics?

The focus of logistics is on storage and movement of items in the supply chain. SCM is a comprehensive, broad term covering the coordination that takes place between the supply chain partners that play a role in the entire supply chain. These include sourcing, manufacturing, storing, transportation, and selling. SCM purports to find processes that make flow of goods smooth and efficient and ensure great customer experience while propelling the business growth.

While SCM handles all the activities between different entities/partners of the supply chain, logistics focuses on goods’ internal movement. In addition to this, supply chain management supports production, distribution, and purchasing of goods. Meanwhile, logistics is responsible for moving and storing goods between various points in the supply chain.

Logistics & supply chain management are quite similar in the sense that they both work for storing, moving, and delivering goods securely and efficiently. SCM provides strategic directions that guide logistics – outbound and inbound.

The similarities between the logistics and supply chain management include the following:

• Both focus on services, information, or goods.
• Both SCM and logistics strive to support the success of the company and help it become distinguishable from its competitors.
• Both logistics & supply chain management work towards boosting customer satisfaction.
• Both revolve around goods and services’ flow – from the supplier, manufacturer, and wholesaler to finally consumer or retailer.

What is the Role of Logistics in SCM?

In SCM, logistics is all about moving and storing goods/services as well as the reports and documents that keep a track of these movements throughout the journey of the items to the customer. Logistics include several methods of transportation that move items across locations. Logistics ensures that the goods are sored securely until they reach their destination and this is extremely important for a healthy supply chain.

Importance of logistics for SCM

Logistics play a crucial role in the SCM as it is responsible for managing, tracking people and resources required to store and move goods/services. Furthermore, it is logistics that ensures the products and materials move securely and reliably from one place to another o me and within budget.

To learn more about the supply chain management and logistics, please feel free to speak to any of our logistics and supply chain management specialists.