Supply chains are the backbone of any business, and knowing the relevant terminologies surrounding supply chains is important because it helps your company define roles clearly and avoid repetition.
Supply chain logistics and supply chain management are often used interchangeably, but they are not the same. So, in this article, we will discuss what these mean and how they are different.
What Is Supply Chain Logistics?
Supply chain logistics is the process of organizing and managing the transportation, storage, and distribution of goods and materials within a supply chain. In other words, it is responsible for ensuring that goods move smoothly from point A to point B.
This involves handling activities such as:
- Picking and packing orders
- Loading and unloading trucks
- Tracking shipments
- Storing inventory
- Coordinating with suppliers, manufacturers, and retailers
- Ensuring timely delivery
- Optimizing routes
The focus of supply chain logistics is to move goods efficiently and effectively. The goal is to minimize waste and maximize efficiency, so that goods can be delivered on time and at a lower cost.
What Is Supply Chain Management?
Supply chain management (SCM) is the process of planning, executing, and controlling the operations of a supply chain. It includes managing the flow of goods and information between suppliers, manufacturers, retailers, and customers.
SCM covers a wider range of activities than supply chain logistics. In addition to transportation and distribution, it also encompasses other aspects, such as:
- Supplier management
- Inventory management
- Order management
- Warehouse management
- Customer service
The goal of SCM is to create a seamless and integrated supply chain that meets the needs of customers. It is about aligning the different parts of the supply chain so that they work together efficiently and effectively.
How Are Supply Chain Logistics and SCM Different?
Now that we have defined supply chain logistics and SCM, let’s take a look at how they differ. In simple words, you can think of logistics as part of supply chain management. The scope and focus of both these entities are different, but are still closely related.
Supply chain logistics focuses on transportation and distribution; SCM, on the other hand, covers supplier management, inventory management, order management, warehouse management, and customer service. Similarly, supply chain logistics focuses on the efficient and effective transport of goods. The focus of SCM is on creating a seamless and integrated supply chain that effectively meets the needs of your customers.
What Is the Role of Logistics in Supply Chain Management?
Logistics play a vital role in supply chain management. By managing the transportation and distribution of goods, logistics ensures that goods reach the right place at the right time. This, in turn, helps keep the supply chain running smoothly and successfully, and ultimately results in better customer satisfaction.
Common Issues in Logistics and How to Solve Them
Like any other process, logistics is not without its challenges. Some common issues faced by logistics professionals include:
- Transportation delays
- Inaccurate tracking
- Lost or damaged goods
These issues can lead to customer dissatisfaction and have a significant impact on the efficiency of the supply chain. To fix these supply chain issues, it is important to have well-designed and fully implemented supply chain software.
Effective supply chain software can help overcome these challenges by:
- Improving communication between different stakeholders
- Ensuring accurate tracking of goods
- Optimizing routes
- Creating a contingency plan for delays and disruptions
By addressing these, an effective logistics system can improve the efficacy of the supply chain and lead to a better customer experience; it is also important to partner with a reliable and experienced logistics provider. A good logistics provider can help you overcome these challenges and ensure that your goods are delivered on time and at a lower cost.
Supply Chain Terms Simplified
Supply chain logistics is about minimizing waste and maximizing efficiency, so that goods can be delivered on time and at a lower cost. The goal of SCM is to create a seamless and integrated supply chain that meets the needs of customers.
