Logistics and Supply Chain Management are two distinct fields of specialization. Logistics is the process of getting a product from point A to point B, while supply chain management is getting a product from point A to point B efficiently and cost-effectively.
Logistics is often seen as the more technical side of things, with supply chain management being more strategic. Logistics focuses on how products are moved from one place to another, while supply chain management looks at the entire process of how products are made and distributed.
Logistics is the study of navigating items across distance and space to deliver them from where they are to where they need to be. The term logistics or logistics comes from the logistic tradition (founded in 19-century France).
Supply chain management comprises the principles of operational activities involved in an organization, company, or producer's raw material sourcing, procurement, the flow of inventory into production and increased customer demand for that product.
Logistics is wider than supply chain management, but the two are interrelated. The supply chain, which includes transportation and warehousing, is part of logistics to provide the necessary services their clients need. Logistics is largely responsible for identifying how goods were sourced and distributed while aggregating information in one centralized system.
Besides dealing with the physical flow of materials or providing inter-company communications, it also includes plans and strategies such as managing the configurations of production or inventory planning, purchase orders and transportation arrangements for materials that are required for manufacturing or consumption. Supply chain management deals with managing resources such as natural resources that flow through employees and procedures to ensure that any job from manufacture to sale meets customer needs as planned.
You Should Understand the Fundamentals of Logistics and Supply Chain Management
Logistics are often defined as actions that occur inside an organization's confines. On the other hand, the supply chain refers to the network of companies that collaborate and coordinate their operations to provide a product to the market. Furthermore, conventional logistics focuses on tasks such as purchase management, delivery, inventory management, and maintenance. Supply chain management (SCM) encompasses all traditional logistics as well as acts such as product development, financing, marketing, and customer support.
It all comes down to providing the correct number of right items to the correct client in the proper circumstances, at the appropriate place, cost, and time. Previously, a variety of responsibilities were overseen individually by several departments; however, they now belong under a single department and report to a single head. This is referred to as integrated logistics, including procurement management, production planning, warehousing, transportation, and customer service.
Logistics management is the professional and skilled administration of regular tasks conducted during an organization's completed goods manufacturing.
The Difference Between Outbound and Inbound Logistics
The movement of completed goods and raw materials from suppliers to the organization is referred to as inbound logistics. On the other hand, outbound logistics refers to the conveyance of manufactured items from the firm to the end customers. Procurement management and distribution centers or warehouses that deal with suppliers are typically characterized as the organization's front end for the suppliers. Production planning and inventory management are at the crossroads of incoming and outbound logistics. Transportation units and consumer experience centers are in charge of communicating with customers and are typically characterized as the organization's front end for end users.
Transport and Logistics
Transport and logistics are two distinct types of processes. Customary transportation services include road, rail, air, and sea transportation, storage and warehousing, and customs clearance. On the other hand, value-added services like consultancy and information technology are included.
International logistics is the most ambiguous collection of logistics and supply chain management words. They are employed in multinational production, global order transportation, and international supply chain management. They are focused on how to effectively manage and control cross-border actions as the same corporate unit. This indicates that firms must try to link the importance of international products, services, marketing, and R&D and transform it into a competitive advantage.
Third-Party Logistics or 3PL
Third-Party Logistics, or 3PL, emerged in the 1980s as a way to reduce costs while improving services. 3PL refers to the practice of outsourcing techniques ranging from a specific task such as land or sea transportation to a broad range of services supporting the complete supply chain, such as order consultation and processing and inventory management.