How is logistics related to supply chain management?

Supply chain management and logistics both play a crucial role in global commerce, helping to get goods from suppliers to consumers efficiently and reliably. But is there a discernible difference between these two disciplines?

In this blog, we look at both logistics and supply chain management, exploring whether they’re simply different terms for the same process or whether they differ from one another. We also delve into why they’re important for getting a shipment to its destination.

Are logistics and supply chain the same?

While similar and often confused with one another, logistics and supply chains are not the same thing. Instead, logistics plays an important role in allowing the supply chain to function effectively. The supply chain is the overall process of sourcing, processing and delivering goods to the end user, whereas logistics focuses more specifically on the movement and storage of goods in the most effective and efficient manner possible. In this way, well-planned and executed logistics is an essential part of a strong supply chain.

That said, different companies around the world may decide to use these terms in a way that suits their particular services and way of operating, and as long as every employee is on the same page, there’s consistency throughout and it doesn’t affect interactions with external parties, there’s no reason why this should be an issue.

What is the relationship between logistics and supply chain management?

In short, many companies may simply regard supply chain management as referring to the bigger picture. As such, this term relates to everyone involved in the process of sourcing goods, processing them and making sure they get to the intended recipients. Meanwhile, logistics is more narrowly focused on keeping a quick, cost effective, efficient and sustainable delivery process that provides the people or organisations receiving the shipment with the best possible service.

A supply chain could include various different types of logistics, and logistics businesses, within it – all of which play their part in the smooth running of the chain.

Why is logistics so important for successful supply chain management?

Logistics is a crucial factor in supply chain management. When done correctly and in an effective manner, it will meet the demand of customers and help to keep the service provider ahead of its competitors.

Whether it’s for goods being transported regionally, nationally or globally, effective logistics is important to ensure that the supply chain is as quick, cheap and universally efficient as possible to benefit everyone involved.

When a supply chain is let down by poor logistics, the delivery of goods may be delayed, unnecessary expenses may be incurred or the chain could break down entirely.