Difference between Logistics and Supply Chain Management

Key Difference: Logistics is a segment under the heading of Supply Chain Management. It specifically refers to the planning, implementing and controlling the efficient and effective flow of goods and services. Supply Chain Management refers to the complete management of the flow of goods and services.

The terms Logistics and Supply Chain Management (SCM) can often be confusing as they are quite interrelated. Even though many tend to use the words interchangeably, they are not in fact the same. They are two different segments referring to different aspect of the business.

Technically, logistics is a part of Supply Chain Management. Supply Chain Management is the overall blanket term that refers to the complete management of the flow of goods and services. This includes the storage of goods, including raw materials, work-in-progress inventory, and finished goods, as well as the transport and management of the said goods. 

 

Logistics, on the other hand, is a segment under the heading of Supply Chain Management. It specifically refers to the planning, implementing and controlling the efficient and effective flow of goods and services. This includes information flow, material handling, production, packaging, inventory, transportation, warehousing, and often even security.

It can be said that logistics refers to the actual planning and transport of goods and services from point a to b, whereas supply chain management includes this and everything else, such as planning and executions of raw material requirements, purchasing and procurement of the raw materials, allocation and distribution of the materials, management of works in progress, collection, management and distribution of finished products, as well as handling segments of after sales. Supply Chain Management also includes demand planning, Forecasting, Global procurement management, as well as, maintaining sustainability and social responsibility within the supply chain.

Comparison between Logistics and Supply Chain Management:

 

Logistics

Supply Chain Management

Description

Logistics is the process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods, including services and related information, from the point of origin to the point of consumption.

Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer.

Part of

Supply Chain Management

Management of the Company

Entails

Anything and everything to do with transporting goods and services

Anything and everything to do with a supply chain

Segments

Inventory

Transportation

Warehousing

Integration and information sharing

Product development

Procurement and Manufacturing

Logistics

Customer Service

Performance Measurement

Relationship with other departments

Does not directly participates in other department or segments

May participate in activities such as research and marketing that may have a direct impact on the supply chain

Reference: Tech Target (Logistics and SCM), Wikipedia (Logistics and SCM),
Eazy Stock, Inbound Logistics
Image Courtesy: bestmindlogistics.com, linkedin.com

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