Differences Between logistics and Supply Chain Management

Differences Between Logistics and Supply Chain Management Related to Core Function

In its basic form, logistics hone in on your ability to plan, carry out and mange the movement of your products or your services between the point they’re implemented to the point your consumer accesses them. This also includes the way information moves throughout the process. With a focus on movement, this can include your management toward both inbound and outbound transportation, how you run your fleet, warehousing techniques and the management of your inventory. It may also involve the coordination between your company and outsourced logistical providers. Logistics can also include procurement and production scheduling, as well as cross over into customer service.

Differences Between Logistics and Supply Chain Management Highlight Connectivity

If logistics are about the movement, supply chain management is about the connection – one of the core differences between logistics and supply chain management. There’s a greater emphasis in supply chain management toward how you collaborate with and maximize your relationships with your suppliers and other partners along your supply chain, such as any middle organizations and outsourced vendors. At every phase of supply chain management, demand management concepts should be considered and applied – one of the differences between logistics and supply chain management. Supply chain management can lead you to a stronger focus on sourcing and the procurement of your materials, especially the contracts and linkages between your supply chain partners.

Outcomes: Area of Differences Between Logistics and Supply Chain Management

There are also core differences between logistics and supply chain management related to outcomes. From a logistical perspective, the outcome can be creating the most efficient movement of your goods from their creation to their distribution. Working within a supply chain management perspective, the outcome could include aligning all your business functions, partners and customer demands into one maximum-performing system, creating value across multiple channels and in multiple regions. Supply chain management can involve focusing on your raw materials production, inventory management and careful planning for production. Demand management within supply chain management may be more focused toward forecasting for production, whereas from a logistical perspective, you may look more at demand planning for how it will impact your distribution fleets and networks.

Differences Between Logistics and Supply Chain Management Involve Daily Activities

What does supply chain management look like in terms of daily operations? You may make decisions in this area related to how many warehouses or distribution centers you need, and where they’ll be located or you may consider lifecycle-level decisions, such as how a new product can be introduced into your supply chain and how it will impact your capacity. IT-related decisions also fall under the supply chain management arena, as you’ll need to determine which technologies or solutions that will make the biggest impact on the overall value. Supply chain management decisions may also require acting on demand forecasting, and making sure all the suppliers in your network are also informed of demand forecasts. Your inventory forecasting and sourcing plans must also be made in close communication and linkage with your supply chain partners. At every stage, cutting out bottlenecks to production, lowering costs and reacting to consumer requests is critical.

Differences Between Logistics and Supply Chain Management On The Job

Logistically, your daily decisions may involve decisions related to ordering materials and supplies and controlling the materials ordering process. One goal may be cutting costs for procurement, while at the same time, making sure all standards and requirements for safety and quality are met during the product distribution process. If you specialize in production logistics, your decisions may revolve around zeroing in on the optimum level of capacities – closely related to how you’ll manage order processing and your transportation fleet that brings a quality product from its origin to its final destination. In its essence, logistics is more focused on the specific parts of your processes that move your goods or services from point A to point B – whereas supply chain management considers how every action impacts the big picture – one of the fundamental differences between logistics and supply chain management.

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