While businesses tend to speak about both logistics and supply chain management at the same time, there are crucial differences between the two that need to be appreciated in order to help make your business as efficient as possible.
What Is Supply Chain Management?
Supply chain refers to the processes that are involved in creating and distributing a product. Supply chain management refers to the active processes that are used to achieve this while enhancing customer experiences, efficiency and cost savings to realize a competitive edge. Supply chain management involves many facets of a business, including procurement, operations, transport, sales, customer service and more.
What Is Logistics Management?
Logistics is part of the supply chain and has to do with the movement and coordination of products. It is possible to think of it this way: Logistics management concerns the efficient management of goods, while supply chain management is the broader process that covers every point, from suppliers all the way to the final end customer.
Supply Chain vs. Logistics: How Do They Work Together?
The most important supply chain management and logistics differences are:
- Logistics refers to the movement of products inside and out of an organization, while supply chain management refers to the movement of broader supply chain activities.
- Logistics is an older idea, based on military principles.
- The goal of supply chain management to get the largest competitive benefit possible, while the biggest goal of logistics is to make the customer happy by delivering the right products in the best way at the most competitive price.
- Supply chain management involves entire companies and every area of a company, while smaller teams may be involved with logistics.
Supply chain and logistics should not be used interchangeably, especially since they have very different aims. When you are considering the broad goal of your company, you are considering supply chain management. For example, if your company makes blankets, your goal may be to take supplies such as wool and transform it into blankets, then market that final product and get it to customers.
When you speak of logistics management, you are talking about a series of interconnected and mission-critical components of business concerned with getting your product to customers. In the example of a business making blankets, logistics would concern picking up the wool and other products, getting it to the right teams inside the organization, maintaining inventory and the right conditions for the materials, and ultimately getting the finished blankets to customers in the right quantity and at the right time at the best price point.
Get Help With Supply Chain and Logistics With Rockfarm Supply Chain Solutions
Do you need wholesale solutions with supply chain management, or just options for a specific area, such as logistics? Rockfarm takes a holistic approach to business. Whether you are choosing us for global services, supply chain coaching, transport management, North American transportation, claims management, engineering and technology solutions, or other support, we always look at the ways we can impact your entire business. To start working with Rockfarm or to get more information about our suite of solutions, contact us today.