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Major Differences Between Supply Chain Management and Logistics

Logistics and supply chain management are the two most popular functions in international trade practice. Most often, people confuse these two terms as similar creating a lot of confusion. If you are getting involved in the logistics business, you must find out how they differ from each other. In this blog, we will help you find how they are different from each other. Let’s Start!!

What is Logistics?

Have you ever been to a point where you have to deal with the transportation of bulk goods to foreign countries? This is where the logistics companies come to the rescue. The overall process ranges from transferring the goods from one place to another using several carriers and mediums. In short, we can say they act as a third party for individuals or businesses who want to transport their goods to other destinations cost-effectively.

What is Supply Chain Management?

If we talk about supply chain management, it covers the entire supply chain flow from purchasing the goods from the seller and delivering it to the final customers using logistics services. It includes everything from purchasing raw materials from the sellers to the manufacturing process and ends with the final delivery of products using a range of logistics services.

Significant Differences between Logistics and Supply Chain Management

Both logistics and supply chain management differ in many ways. However, supply chain management involves the entire process from planning, sourcing, production, warehousing, handling, and delivering the goods. Meanwhile, the logistics focus only on transferring goods to the right place at the right time for cost-effective prices. The significant differences between the two include:

  • Supply chain management is a complete process: planning, production, order processing, warehousing, inventory handling, final delivery, etc. However, the logistics are merely a fraction of the SCM involving everything required to transport goods smoothly.
  • The overall purpose of supply chain management is to improve the services to gain competitive advantages. While the logistics process focuses on achieving customer satisfaction by understanding their needs and expectation.
  • The SCM involves everything that takes from producing the goods from raw materials to delivering them to the final customer or retailer in the most efficient manner. While Logistics emphasizes making the delivery of goods more cost-effective and efficient.
  • Only a single organization can be involved in the logistics management process. While supply chain management involves multiple organizations to ensure the efficient flow of the supply chain.
  • Logistics is an old concept used widely to improve business operations. However, the SCM is a relatively modern concept that is evolved to meet the unique demands of the competitive marketplace.
  • Logistics does not ask for long-term planning and forecasting, while the SCM requires efficient forecasting for future trends to help improve the business standards by meeting customers’ expectations.
  • Supply chain management is a core concept for modern businesses. However, there isn’t anything like this with logistics management as it doesn’t significantly impact the business operations.

Does Logistics and Supply Chain Management Coexist?

Logistics is not just a part of supply chain management, and instead, it is the most critical factor of the supply chain management process that everyone needs at a stage of their supply chain process. The overall goal of the logistics process is to make sure that the goods reach the final destination most cost-effectively along with all the necessary documents by tracking the journey. In short, it helps businesses decide when and how much inventory they need at the moment and the ways to plan for the future.

The logistics process is an essential part of the supply chain journey for businesses who want their goods to reach safely and without any hindrances. Suppose you want to stay competitive in the field, and an efficient flow of goods is a must. For this, you require a smart logistics management system that can help you stand apart from your competitors. With a reliable logistics management company like SLR shipping services, you can easily get your goods delivered on time at the most cost-effective prices.

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