In Domestic or International Businesses, both Supply Chain Management and Logistics are an integral part of the business.
Here we explain the both.
Supply Chain Management
Supply chain management means streamlining all the activities involved in the production of goods, from obtaining the raw materials to transporting the finished goods to the end-user. It uses an associative, integrated and multimethod approach with the aim of improving the supply chain process. The objective is to benefit the business and improve customer satisfaction.
What is Logistics
Logistics plays an important role in supply chain management and involves managing the storage and movement within the supply chain. It also includes the planning and execution of the storage and transportation of goods between the supply chain networks. Logistics assists in gathering the workforce, resources and machinery required to move the goods from one location to the final destination.
There are a number of similarities between logistics and supply chain management, but it is important to know that they are not the same. Several key differences separate the two practices. It is important for businesses to understand the role each plays in improving operational movements and enhancing customer service.
What is the confusion between SCM and logistics?
Distinguishing between supply chain management and logistics has become blurry, due to the overlap between the two. Ultimately, they are both terms are describing the movement of goods around a business.
Supply chain management is all encompassing. It includes everything which goes on as part of logistics. SCM adds the planning, analysis, and improvement of every stage.
Logistics is the processes of moving items around the business. So that does include arranging transportation, and organization of staffing to keep things moving. But, key decisions on recruitment would be supply chain management level.
Both terms are a large part of whether a company achieves its objectives. Both are aiming to drive costs down whilst satisfying customer expectations. It’s just SCM is a bigger picture term.
Summing Up
Logistics forms a part of the supply chain management and involves managing the forward and reverse movement of goods, services, and all the related information between the origin point and the consumption point to satisfy the customer requirements.
The supply chain is bigger than logistics. Logistics is just a subset of the entire supply chain and focuses primarily on the transportation and storage of goods. Whereas the supply chain management includes logistics but also deals with other activities such as sourcing, turning raw materials into products, and demand planning.
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