The terms “supply chain management” and “logistics” are often used interchangeably. While it is argued that the two mean the same thing, there are several key differences that are important to understand.
Although we’ve written about these differences in the past, our team has put together a quick, updated guide to help those who aren’t familiar with the industry understand the differences between supply chain management and logistics, and how they work together.
Supply Chain Management
When it comes to all things that have to do with sourcing, procurement, conversion, and logistics management, these activities fall under the process of supply chain management. Supply chain management refers to the concept of connection: from suppliers to the consumer.
The main goal of supply chain management is to gain a competitive edge through the use of multi-dimensional organizations, and there are many activities that function within the supply chain.
Logistics
Logistics is an activity within the supply chain and can be divided into two categories: inbound and outbound. Inbound logistics refers to the attainment of material, handling, storage, and transportation. Outbound logistics refers to the collection, maintenance, and distribution or delivery to the end consumer.
The objective of logistics is to ensure customer satisfaction and that they receive their products when they need them, where they need them, and at a satisfactory price.
Working Together
Given that logistics is a part of supply chain management, the two concepts largely supplement one another. Without supply chain management, logistics could not exist. And, without logistics, supply chain management would not exist. Essentially, supply chain management helps logistics be more in touch with the teams that handle the transportation, storage, and distribution of goods. Just remember, the two terms should not be used interchangeably.
Have questions about supply chain, logistics, or both? Contact us today. Our expert team would be happy to speak with you about how we implement unique solutions to help customers save both time and money.