Supply chain management (SCM) and logistics management are essential in optimizing business operations. While both share a common goal, there are significant differences between them. What are these differences? Find a comprehensive explanation in this article.
Contents
What is Supply Chain Management?
Before delving further into the differences between SCM and logistics, it’s essential to understand their definitions. Supply chain management oversees and controls all partners or entities involved in the supply chain process, from raw material suppliers to manufacturing, distribution, storage, and sales. The primary goal of SCM is to integrate and coordinate all activities within the supply chain to ensure a smooth and efficient process from start to finish.
What is Logistics Management?
After understanding the definition of supply chain management, let’s move on to the purpose of logistics management. As reported by Techtarger, logistics management is the governance of supply chain functions that helps organizations plan, manage, and execute processes for moving and storing goods. Another crucial aspect of logistics management is distribution and transportation. This includes optimal route planning and selecting the proper transportation methods. Effective transportation management can reduce costs, expedite delivery times, and minimize the risk of damage or loss of goods.
It’s important to note that, in addition to logistics and supply chain management, there’s also the term supply chain logistics. Supply chain logistics involves coordinating the movement and delivery of goods or products across the entire supply chain.
Differences Between Supply Chain Management and Logistics
Here are some differences between supply chain and logistics that are important to know:
Scope
SCM is responsible for devising strategies to make the supply chain process efficient and directing the daily logistics activities in factories, warehouses, central warehouse shipments, and other facilities.
On the other hand, logistics is one aspect of the supply chain that focuses on storing and delivering finished goods or services to customers, whether they are manufacturers, distributors, or consumers.
Focus
Another difference between SCM and logistics lies in their focus. SCM has a more strategic direction involving long-term planning, strategic decision-making, and managing relationships with suppliers and customers.
SCM aims to improve quality, product innovation, risk control, and process optimization throughout the supply chain.
In contrast, logistics has a more operational and tactical focus on managing day-to-day operations to meet customer demands efficiently.
Logistics includes:
- Efficiently managing inventory
- Proper packaging
- Selecting optimal transportation methods
- Accurately monitoring the process of goods
Timing
As previously mentioned, SCM is a practice that involves long-term planning and strategic decision-making.
Logistics, on the other hand, is an operational aspect that involves daily actions to ensure goods arrive at their destination on time. Logistics focuses on efficiently fulfilling customer demands.
Stakeholder Involvement
There is a difference between logistics and supply chain management in terms of stakeholder involvement. SCM involves various parties and entities in the supply chain, including suppliers, manufacturers, distributors, and customers.
SCM is responsible for managing business partner relationships and effective collaboration across the entire supply chain.
Logistics, on the other hand, primarily focuses on managing shipping and storage processes within the company itself, involving cooperation between internal departments such as warehousing, production, and transportation.
Find Optimal Route for Goods Delivery with LOKASI Intelligence
In today’s competitive and rapidly changing business world, it’s crucial for companies to optimize their logistics processes. One way to achieve this is by using solutions from LOKASI Intelligence.
LOKASI Intelligence is a platform that helps businesses find efficient routes for goods delivery, optimize delivery schedules, and maximize operational efficiency.
With location intelligence and geospatial analysis, LOKASI Intelligence provides effective solutions tailored to logistics needs.
Learn more about how LOKASI Intelligence can assist businesses by contacting us via email: [email protected] or WhatsApp: 087779077750.
FAQ
What is logistics and supply chain?
A major difference between logistics and the supply chain is that logistics is one component of the supply chain. Logistics focuses on the delivery and storage of goods, while SCM focuses on the strategy and management of the entire supply chain.
What is meant by logistics?
Logistics management involves organizing, managing, and executing processes for moving and storing goods that help organizations manage their supply chains.
What does supply chain management do?
Supply chain management oversees and controls all partners or entities involved in the supply chain process, from raw material suppliers to manufacturing, distribution, storage, and sales.
