The way businesses operate now compared to how they would many years ago has undergone a significant change. Technology advancement has facilitated the growth of all important economic sectors, including supply chain and third-party logistics companies in India. While there are some key differences between supply chain management and logistics companies, people seem to keep using them synonymously.
The term “supply chain management” refers to all operations and logistics services related to sourcing, purchasing, processing, logistics and distribution. Above all, it includes collaborating and coordinating with parties, including suppliers, intermediaries, dealers, and clients. A small area of the supply chain called logistics management is responsible for the effective management of the products. To understand this better, here is everything you need to know:
What is Logistics Management?
Logistics management is the administrative process that incorporates the transportation of commodities, resources, data, and money from when the items are procured until they get to the final user. The objective of this procedure is to give the final client the appropriate product with the right quality, in the right location, and at the best price. The two main categories of logistical activity are as follows:
Inbound Logistics
The operations that deal with material acquisition, storage, warehousing, and transportation are referred to as inbound logistics.
Outbound logistics
The processes involved in gathering, maintaining, and delivering goods to their final recipients.
In addition to these, other tasks include inventory control, secure packaging, order fulfilment, asset tracking, and warehousing.
What is Supply Chain Management?
SCM or Supply-chain management is the process of managing the development and flow of raw materials into completed items up until they are delivered to the final consumer. The effectiveness of this chain of operations happens due to the result of the combined efforts of numerous organisations. SCM employs a multifaceted strategy to control the transportation of raw materials and works inside and outside of the organisation. These groups could include businesses that the organisation currently collaborates with as suppliers or collaborators, as well as producers, distributors, retailers, and customers. Integration, procurement, purchasing, manufacturing, testing, transportation, customer support, performance evaluation, etc., may be included in the operations.
Logistics Management VS Supply Chain Management
The points mentioned below are the most significant when it comes to Logistics Management VS Supply Chain Management:
- Logistics refers to the movement and storage of commodities both within and outside the company. Supply chain management is the mobility and merging of supply chain activity.
- Complete client satisfaction is the fundamental goal of logistics. Contrarily, obtaining a significant competitive advantage is the primary goal of managing the supply chain.
- While several companies are engaged in supply chain management, just one company is engaged in logistics.
- Contrary to logistics, the management of supply chains is a relatively recent idea.
- Logistics is an element of supply chain management.
Final Words
A very old phrase, logistics, was originally used in the military to describe the upkeep, storage, and transport of army personnel and equipment. As the idea of management of supply chains was developed, this phrase is now used in a variety of fields, not just the army. It was also claimed that SCM is a supplement to logistics companies’ activities and that it includes logistics. Both are interdependent. As a result, they complement rather than conflict with one another. SCM enables Logistics to communicate with the team responsible for distributing, warehousing, and conveyance.
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