Difference Between Logistics and Supply Chain Management (with …

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Differences Between Logistics and Supply Chain

• Categorized under Business | Differences Between Logistics and Supply Chain

Logistics and supply chain management are some terms that are prevalent and have been used in the modern world of business and other areas that involve several activities, which include military operations among others. Apparently, it has become difficult for people to indicate whether one is practicing logistical management or supply chain management leading some professionals even to use the two terms interchangeably. However, there exist a significant number of differences between logistics and supply chain management that are important for one to understand.

 

  • What is Logistics?

Logistics is a term used to describe the process of handling goods within a specific department while at the same time keeping an inventory document of the status and whereabouts of different inventories. Besides, logistics can be defined as the process of planning, execution, and control of the movement of goods and other related activities. Differences Between Logistics and Supply Chain

 

  • What is Supply Chain Management?

Supply chain management is a terminology used to describe all the activities, which include the purchase of raw materials, receiving of raw materials, manufacturing, and production of goods, and delivery of the desired goods to their respective customers or destinations. Differences Between Logistics and Supply Chain-1

Differences Between Logistics and Supply Chain

  1. Goals and Aims of Logistics and Supply Chain Management

One of the major difference between logistics and supply chain management is their intended goals and objectives within an organization. The goals and objectives of logistics within an organizational department is ensuring that customers attain maximum satisfaction during their interactions with the organization. Logistical officers ensure that anything that is needed by the customers is accessed with ease and it is acquired in the right quality and quantity. On the other hand, supply chain management has the goal and objective of ensuring that the company achieves a competitive and comparative advantage through effectiveness and efficiency. More importantly, supply chain management ensures that the company procures laws materials at lower prices while selling finished goods at the highest prices possible.

  1. Organizations Involved Logistics and Supply Chain

The number of organizations involved is another aspect that can be used to highlight the difference between logistics and supply chain management. Logistics is involved in a single organization because there are no logistical activities that are required when one company is interacting with the other company. Logistical operations are confined and restricted to an individual organization and the customers willing to cooperate with the team. On the other hand, supply chain management is involved with multiple agencies that are interacting with the company on a daily basis. It is important to highlight that supply chain management must interact with organisations supplying raw materials, companies delivering or transporting finished goods, and companies purchasing their finished products.

  1. Evolution and Development of Logistics and Supply Chain

The evolution and development of logistics and supply chain management form one of the fundamental differences between the two terms. According to historians, logistical management has existed for a lengthy period and has passed the test of times since it currently exists despite development in technology. Historians highlight that logistics was prevalently used in traditional empires for military operations and involved transportation of both firearms and military personnel among others. On the other hand, supply chain management is a modern aspect that emerged in the 19th century. The aspect has grown to the point that it is currently being incorporated in all business organizations and government departments. Moreover, supply chain management is a stand-alone department within the company and a course by itself in different learning institutions around the world.

  1. Departments and Sections of Logistics and Supply Chain

The number of departments and sections involved in logistical management and supply chain management shows some significant number of differences between the two practices. It is worth noting that the number of sections in supply chain management is higher as compared to those in the logistical department because supply chain management is involved and interacts with multiple organizations. Some of the sections within logistical management include inventory, warehousing, and transportation. Supply chain management has a significant number of sections, which include product development and testing, customer service and satisfaction, integration and information sharing, logistical activities, performance measurement, and procurement and manufacturing among others.

  1. Relationship with One Another

There exist a significant relationship between logistical management and supply chain management. Although many people think that they are different departments with each entitled to handle its activities, the logistical department is a section of the supply chain management that handles specific tasks. It is important to highlight that logistical the supply chain department can handle activities without interfering or lowering the quality of the services offered by this administration. This explains why some organizations do not have operational, logistical department but have operational supply chain management department, which handles logistical issues.

  1. Relationship with Other Departments

Similar to their interactions with other organizations where supply chain management can interact with multiple companies, it looks like supply chain management has an edge when it comes to cooperation with other departments within the organization. The logistical administration does not have active roles in different departments while supply chain management has a high probability of participating in affairs of other agencies through research, marketing, and ordering raw materials for manufacturing department.

Table Showing Differences Between Logistics and Supply Chain Management

 

Logistics

Supply Chain Management

Goals and AimsCustomer SatisfactionCompetitive advantage
Organizations InvolvedSingle Organization InvolvedMultiple Organizations Involved
Evolution and Development

 

TraditionalModern
Relationship with One Another

 

Within Supply Chain ManagementIncorporates Logistics
Relationship With Other DepartmentsMinimal Relationship with other DepartmentsSignificant Interactions with other Departments

Summary of Logistics and Supply Chain

  • Differentiating both logistical management and supply chain management is an essential aspect because one can have a conceptual picture of measuring the performance of each department in a reasonable way.
  • Moreover, understanding the role of each department prevents the conflict of interest while at the same time creating boundaries between various departments within the organization. Limits are efficient when determining the allocation of resources in each division.

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  • Cite
    Jecinta Morgan. “Differences Between Logistics and Supply Chain.” DifferenceBetween.net. February 5, 2018 < http://www.differencebetween.net/business/differences-between-logistics-and-supply-chain/ >.

    1 Comment

    1. Vrijspreker

      February 16, 2018 • 12:59 pm

      Thanks, glad I could help! Following my feed was so difficult for me too before I switched.

      Reply

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    Written by : Jecinta Morgan.
    and updated on February 5, 2018

    References :

    [0]Cooper, Martha C., and Lisa M. Ellram. “Characteristics of supply chain management and the implications for purchasing and logistics strategy.” The international journal of logistics management 4.2 (1993): 13-24.

    [1]Lambert, Douglas M., Martha C. Cooper, and Janus D. Pagh. “Supply chain management: implementation issues and research opportunities.” The international journal of logistics management 9.2 (1998): 1-20.

    [2]Lambert, Douglas M., and Martha C. Cooper. “Issues in supply chain management.” Industrial marketing management 29.1 (2000): 65-83.

    [3]”Image Credit: https://technofaq.org/posts/2016/08/role-and-function-of-logistics-management/”

    [4]”Image Credit: https://supplylogistics.wikispaces.com/02+TRANSPORTATION,+SUPPLY+CHAIN+AND+THE+ECONOMY”

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    Key Differences

    Know the Differences & Comparisons

    Difference Between Logistics and Supply Chain Management

    By 26 Comments

    logistics vs supply chain management All the activities, associated with the sourcing, procurement, conversion and logistics management, comes under the supply chain management. Above all, it encompasses the coordination and collaboration with the parties like suppliers, intermediaries, distributors and customers. Logistics Management is a small portion of Supply Chain Management that deals with the management of goods in an efficient way.

    Supply Chain Management, it is a broader term which refers to the connection, right from the suppliers to the ultimate consumer.

    It has been noticed that there is a drastic change in the manner in which business was conducted many years ago and now. Due to the improvement in the technology, which leads to the development of all key areas of business. Supply Chain Management also evolved as an improvement over Logistics Management, from past years. Check out this article to understand the difference between Logistics Management and Supply Chain Management.

    Content: Logistics Vs Supply Chain Management

    1. Comparison Chart
    2. Definition
    3. Key Differences
    4. Conclusion

    Comparison Chart

    Basis for ComparisonLogistics ManagementSupply Chain Management
    MeaningThe process of integrating the movement and maintenance of goods in and out the organization is Logistics.The coordination and management of the supply chain activities are known as Supply Chain Management.
    ObjectiveCustomer SatisfactionCompetitive Advantage
    EvolutionThe concept of Logistics has been evolved earlier.Supply Chain Management is a modern concept.
    How many organizations are involved?SingleMultiple
    One in anotherLogistics Management is a fraction of Supply Chain Management.Supply Chain Management is the new version of Logistics Management.

    Definition of Logistics Management

    The management process which integrates the movement of goods, services, information, and capital, right from the sourcing of raw material, till it reaches its end consumer is known as Logistics Management. The objective behind this process is to provide the right product with the right quality at the right time in the right place at the right price to the ultimate customer. The logistic activities are divided into two broad categories they are:

    • Inbound Logistics: The activities which are concerned with procurement of material, handling, storage and transportation
    • Outbound Logistics: The activities which are concerned with the collection, maintenance, and distribution or delivery to the final consumer.

    Apart from these, other activities are warehousing, protective packing, order fulfillment, stock control, maintaining equilibrium between demand and supply, stock management. This will result in savings in cost and time, high-quality products, etc.

    Definition of Supply Chain Management

    Supply Chain Management (SCM) is a series of interconnected activities related to the transformation and movement of raw material to the finished goods till it reaches to the end user. It is the outcome of the efforts of multiple organizations that helped in making this chain of activities successful.

    Supply Chain Management

    Supply Chain Management

    These organizations may include the firms with whom the organization is currently working like partners or suppliers, manufacturers, wholesalers, retailers, and consumers. The activities may include integration, sourcing, procurement, production, testing, logistics, customer services, performance measurement, etc.

    Supply Chain Management has a multi-dimensional approach which manages the flow of raw materials and works in progress (semi-finished goods) within the organization and the end product outside the organization till it reaches the hands of the final consumer with a complete emphasis on the customer requirement.

    Key Differences Between Logistics and Supply Chain Management

    The following are the major differences between logistics and supply chain management:

    1. The flow and storage of goods inside and outside the firm are known as Logistics. The movement and integration of supply chain activities are known as Supply Chain Management.
    2. The main aim of Logistics is full customer satisfaction. Conversely, the main aim behind Supply Chain Management is to gain a substantial competitive advantage.
    3. There is only one organisation involved in Logistics while some organisations are involved in Supply Chain Management.
    4. Supply Chain Management is a new concept as compared to Logistics.
    5. Logistics is only an activity of Supply Chain Management.

    Conclusion

    Logistics is a very old term, firstly used in the military, for the maintenance, storage and transportation of army persons and goods. Nowadays, this term is used in many spheres, not specifically in the military after the evolution of the concept of Supply Chain Management. It has also been said that SCM is an addition over Logistics Management as well as SCM comprises of logistics. Both are inseparable. Hence they do not contradict but supplement each other. SCM helps Logistics to be in touch with the transportation, storage and distribution team.


    Related Differences

    • Difference Between Supply Chain and Value Chain
    • Difference Between Inbound and Outbound Logistics
    • Difference Between Vendor and Supplier
    • Difference Between Shareholders and Stakeholders
    • Difference Between e-commerce and e-business

    Comments

    1. great stuff

      Reply
    2. Wonderful article!

      Reply
    3. Nice article

      Reply
    4. great one

      Reply
    5. great article!

      Reply
    6. good one

      Reply
    7. Very short and good explanation! Excellent 🙂

      Reply
    8. Good article. It will definitely help with my research project.

      Reply
    9. It’s good

      Reply
    10. A fantastic breakdown of logistic and supply chain management.

      Reply
    11. its a great atricle very simple very targetive better than so many books

      Reply
      • Thanks a ton, all of you for your valuable views and appreciation, it means a lot to us. Keep sharing.. 🙂

        Reply
    12. Thanks a lot article cleared all of mine confusions regarding logistics and scm
      and better than my study material .

      Reply
    13. superb article

      Reply
    14. Thanks for sharing this article. It provides a distinguishing features of logistics and supply chain management.

      Reply
    15. Very good article. Can you provide references?

      Reply
      • “Difference Between Logistics and Supply Chain Management” By Surbhi S keydifferences.com
        < http://keydifferences.com/difference-between-logistics-and-supply-chain-management.html>

        Reply
    16. Thankyou, it will be a worthful article for students like me who were confused in both these terms………This Article cleared me the whole Picture…..

      Reply
    17. Thanks a lot..

      Reply
    18. Thank you very much for putting this information very nicely. It really helped to understand the difference between the two and how are they interrelated.

      Thank you once again.

      Reply
    19. Thanks,
      It will surely help me ?

      Reply
    20. Great article!!

      Reply
    21. Well explained the difference between the two. Easy to uderstand.

      Reply
      • Thank you so much guys for sharing your views with us and constantly appreciating Key Differences. 🙂 🙂

        Reply
        • Thank you for this article ,it’s very helpful .

          Could you please tell me which sources (books, articles ,conferences …) you have used to write this valuable article.

          Reply
    22. 👌👌

      Reply

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