Logistics & Supply Chain Management: What’s The Difference?
When it comes to supply chain management and logistics, the industry jargon is confusing – not only for consumers but also for workers, elbow-deep in work every day. Even industry practitioners can’t seem to agree on universal definitions of logistics and supply chain management, but one thing is clear: the terms aren’t synonymous. Let’s explore the differences in meaning and how the behind-the-scenes world of product creation, logistics, shipping, and distribution really works.
Ready to dig deep and boost your industry knowledge? Read on.
Supply Chain Management 101
Supply chain management is the oversight of products from their origin to the final destination — getting the product into consumer’s hands. Think of the supply chain as the network and collaboration between a company and its suppliers to produce a product. It’s the strategy and the overarching framework of activities, actions, and steps it takes to gather materials, put together a product, and deliver the finished product to a customer.
Like what? Here’s an example:
Think about creating a product — like a bicycle. Before you can build a bike, you must first source the raw materials — metal piping, foam, plastic, rubber, and paint. Additional supplies must be acquired to build the bicycle structure, the brake system, the wheel system, transmission, saddle, frame, fork, and accessories. Once the raw materials are ordered from suppliers, they’re sent to a manufacturer, where the bike is assembled. When the bicycles are ready, they’re packed up, then are sent to a distributor. This might be a mass-market distributor, an independent bike distributor, or a sporting goods store. Then finally, as a consumer, you can buy the end product — your shiny new bicycle.
As you can see, there are many steps to procure your bicycle's materials to build each component before the finished bike is ready to ride. The supply chain manages the oversight of the entire process.
If we were tasked with distilling logistics to just two words, they’d be transportation and storage. If supply chain management is the overall sourcing of everything from raw materials to manufacturing to distribution, by contrast, logistics is the action of movement, storage, and flow of goods, services, and information within the overall supply chain. Logistics is a subdivision of the overarching supply chain. It’s the magic behind a smooth-running supply chain operation. The details, the precision, and the execution of ensuring the larger project — managed by the supply chain — are carried out flawlessly.
Logistics is no easy feat— efficiency, precision, and organization are paramount to success.
As products move through the supply chain, the process must run smoothly. This project management is logistics, which involves:
- Planning for the movement of goods from one place to another, including the storage of materials or products and producing any necessary documentation that is required for processing or reporting.
- Implementation of the movement of goods that may involve multiple modes of transportation and/or storage.
- Control and information sharing regarding the movement of goods, including tracking shipments, technology, and fleet management.
Think back to the bicycle example… Logistics ensures that there are trucks with ample space to pick up the bicycles when they’re ready. If they need to be shipped overseas, logistics managers arrange transport by air or sea. They report on pick-up and delivery times to the supply chain management.
One Supply Chain & Multiple Logistics Providers
Whereas a single supply chain oversees a product process — from raw materials to the supplier to the manufacturer to the distributor to the retailer to the consumer — there may be multiple logistics touchpoints — even companies — used throughout the process. Each logistics provider often oversees only a bite-sized piece of the big picture. So, various logistics operations may be used throughout the full-process cycle of creating a product and bringing it to a consumer.
Additional Supply Chain Management Functions
Beyond the full-cycle product oversight, supply chain management often involves partnership and collaboration with outside vendors and organizations: inventory and order management, shipment tracking, reporting, and troubleshooting to ensure smooth transitions throughout the product creation process.
Every action, timeline, and process that’s a piece of the supply chain management and logistics puzzle is an integral part of delivering goods and services to customers. Ensuring that policies and procedures are efficient and economical is essential to success.
At MyUS.com, we are committed to providing fast, worry-free shipping experiences to our customers through optimized supply chain and logistics management and unmatched member customer service.