icon

Relationship between logistics and supply chain management

Distribution

26 June 2021

A supply chain covers the production and distribution of goods and services to all types of customers. And, when well executed, both logistics and supply chain management can give companies a competitive advantage and bring value to their customers.

Supply chain logistics is the one that coordinates the storage and shipping of goods (and services) across the supply chain. The practice begins with raw materials, then goes to manufacturing and ends with its distribution to the customer or when products are returned to their final destination. 

While many use logistics and supply chain management interchangeably, they cover different activities, even though they are related.

Logistics and Supply Chain Management

Logistics

Logistics focuses on the movement and storage of products in the supply chain. This means that logistics focuses on the internal movement of goods.

Logistics is an aspect of the supply chain that stores or delivers finished goods or services to customers: manufacturers, distributors or consumers. The goal of logistics is to get goods and services on time and at a competitive price to them.

The processes that fall under logistics are:

  • Demand planning.
  • Transportation.
  • Fleet management.
  • Inventory management.
  • Material handling.
  • Order fulfillment.

In other words, logistics coordinates people, facilities, equipment and other resources to ensure products move on time.

Supply Chain Management

While supply chain management (SCM) is more comprehensive, covering all of the coordination between partners that have a role in this network.

This includes:

The ultimate goal of SCM is to find processes that ensure an efficient flow of goods that give customers an excellent experience.

Additionally, SCM sets the strategy and directs daily logistical activities that happen in factories, warehouses or local shipping centers. It focuses on improving supply chain processes, which can benefit both customers and business partners.

How Are Supply Chain Management and Logistics the Same? 

Both supply chain management and logistics focus on the flow of goods from the point of origin to the endpoint. Both disciplines require careful coordination of supplies, labor and facilities to make sure items can move through the supply chain as required. Logistics is a key component of supply chain management, but just one piece of the equation. 

Similarities between Logistics and Supply Chain Management 

Logistics and supply chain management both work to move, store and deliver goods as efficiently as it is possible. So, supply chain management provides the strategic direction that guides logistics.

Key common aspects of logistics and supply chain management

  • They focus on information, goods, services.
  • They have the ultimate aim of supporting the success of the company.
  • They have the ultimate aim of distinguishing the company from competitors.
  • They seek to increase the customers’ satisfaction.
  • They revolve around the same flow of goods and services, from suppliers to the manufacturers, to the retailer or final consumer.

Differences between Logistics and Supply Chain Management

Supply chain management outlines the strategy while Logistics focuses on the right products being in the right place at the right time. This means that these are intersect but differ when it comes to their scope and focus. 

Key differences between logistics and supply chain management

  • Logistics are activities inside the supply chain management and SCM covers activities that include: production, inventory planning, labor planning, materials, facilities management, manufacturing and delivering goods and services.
  • Logistics focus is on the efficient and cost-effective delivery of goods to customers while supply chain management controls the development of raw materials into finished goods in order to move into their delivery.
  • Logistics emphasizes meeting customer needs and expectations while supply chain management works toward improving processes to create competitive advantages.

logo
You can also follow us in
social media
Linkedin
You can request a custom quote for your company
Are you looking for a
specific topic?
Contact us

Comments (0)

There are no comments yet. Be the first!

Leave a comment

Latest News

The current day-to-day news about the logistics world with our articles.

Trucks and trailers: logistics

There are different types of trucks and trailers that are used to transport goods from one place to another. There are a few of industries that work with these and logistics is one of the largest industries in the world that transport materials. Trucks and trailers can capacitate different quantities of goods. Even though the needs […]

4 Reading min

Read more

Logistics Management and its importance

By definition, logistics is a set of methods and procedures necessary and designed to achieve the organization of a company, logistics management, in order to carry out its goals or objectives. We can say that logistics management is a fundamental part to achieve efficiency in the supply of products or merchandise, from its point of […]

4 Reading min

Read more

Reverse logistics: recycling and sustainable packaging

Industries, nowadays, generate more than 30 tons of waste every year in Spain, according to the National Institute of Statistics (INE). Individuals generate more than 20 tons in the same period of time. This is where reverse logistics comes into play. Reverse logistics is that which facilitates the creation of waste collection channels. These channels […]

4 Reading min

Read more

Intermodal transport and multimodal transport: differences

In logistics, transport is characterised by the use of different means to send goods. Whether by sea, air or land, it all depends on the type of cargo. Below we explain the differences between intermodal transport and multimodal transport to find out how each of them can help us when transporting our goods. Knowing how […]

4 Reading min

Read more

Software and new technology in logistics

Today, the environment in which we live is characterised by external competitiveness. From the simplest operation to the approach of strategies within the company, such as suppliers and customers. This means that the development of technology in software has been a fundamental key to be able to optimise these operations and promote automation and new […]

4 Reading min

Read more

Military logistics: what is it and how does it work?

Military logistics has been part of the history of mankind and has evolved to become a science of application to different processes of the Operational Forces. Many of its theories and applications have been efficiently put into practice in the business world. In this article we will talk about the logistics cycle, the principles of […]

4 Reading min

Read more

Slotting: warehouse productivity

Slotting is the process of determining the best location of goods within the warehouse. This improves the warehouse productivity. A good slotting strategy is necessary to ensure the efficient installation of goods. For example, decreasing delivery times or more expensive warehouses mean that companies have to optimize the performance of their storage space to remain […]

4 Reading min

Read more

Freight broker agent: meaning

When it comes to carry freight, there are so many things that could go wrong: delays, damage, miscommunication…A freight broker is the one that facilitates the communication between carriers and shippers, in order for the freight or cargo to arrive safely and on time to its destination. What is a freight broker responsable for? A […]

3 Reading min

Read more

3 ways a TMS can improve the Supply Chain

Having a reliable software solution nowadays for your transportation management is a must; it is a necessity. Even if many users underestimate the importance of a TMS for their business. A Transportation Management System is an irreplaceable tool that, under the pressure of the pandemic crisis, has been able to reduce the transportation spending in […]

4 Reading min

Read more

Relationship between logistics and supply chain management

A supply chain covers the production and distribution of goods and services to all types of customers. And, when well executed, both logistics and supply chain management can give companies a competitive advantage and bring value to their customers. Supply chain logistics is the one that coordinates the storage and shipping of goods (and services) […]

4 Reading min

Read more

Trucks and trailers: logistics

There are different types of trucks and trailers that are used to transport goods from one place to another. There are a few of industries that work with these and logistics is one of the largest industries in the world that transport materials. Trucks and trailers can capacitate different quantities of goods. Even though the needs […]

4 Reading min

Read more

Logistics Management and its importance

By definition, logistics is a set of methods and procedures necessary and designed to achieve the organization of a company, logistics management, in order to carry out its goals or objectives. We can say that logistics management is a fundamental part to achieve efficiency in the supply of products or merchandise, from its point of […]

4 Reading min

Read more

See all articles