Logistics and supply chain management is the process of organizing and managing all actions related to sourcing and acquiring, converting, and storing raw materials, inventory for work-in-progress, finished goods, and materials utilized in manufacturing.
The management and control of the flow of resources such as people, energy, information, and other things from the point of production to the market are known as logistics. It involves many different processes that are required for an organization to function efficiently. Logistics can be thought of as a chain that links activities together in order to fulfill a customer’s order.
The process does not end when an item leaves your warehouse or distribution center; it must also be delivered on time within its designated location at a reasonable cost per unit shipped for you not only retain your customers but also gain new ones through better service than your competitors can offer their clients.
Supply chain management encompasses all tasks related to sourcing and procurement, conversion, and logistics management. It’s significant that it involves channel partners, suppliers, middlemen, third-party service providers, and customers in coordination and collaboration.
Supply chain management is not just about logistics. It is about making sure that your supply chain works efficiently from end to end. Logistics are important for your business, but if you want to survive globally, you need supply chain management.
In essence, supply chain management combines the management of supply and demand within and among businesses. More recently, it has also been used to describe the positive impact an integrated approach can have on a company’s bottom line.
Supply chain management is not logistics; as a concept, it encompasses all aspects of managing the flow of goods from producer to consumer. It includes not just transportation but also warehousing, inventory control, production planning, purchasing and other functions.
The key difference between the two disciplines is that logistics primarily focuses on tactical issues. Whereas supply chain management takes a strategic perspective on how all parts of an organization work together in order to improve customer relationships and overall efficiency.
In order to manage a supply chain, you must use logistics
Logistics is the science of planning and carrying out the movement of goods, services and related information from the source of supply to the point of consumption. It includes:
- Demand forecasting.
- Inventory control.
- Order processing.
- Warehousing.
- Transportation (including air freight, trucking, and rail transport).
- Packaging and labeling.
Logistics is the science of planning and carrying out the movement of goods, services, and related information from the source of supply to the point of consumption. Logistics managers are responsible for streamlining the flow of products from their point of origin to their ultimate destination.
Logistics managers must consider a number of factors when planning production and distribution. For example, they must consider demand forecasting, the process used to predict how much product will be needed at different times in order to meet customer demand.
In the logistics industry, business functions are categorized by the type of activity they perform. The two main categories are transportation management and supply chain management.
In transportation management, a company may use its own vehicles to deliver goods to customers or contract with third parties for such service. In either case, this is known as freight transportation.
Supply chain management is responsible for managing the flow of materials from supplier to manufacturer to wholesaler to retailer and ultimately to end-customer.
Conclusion
Logistics and supply chain management are interdependent processes. Logistics is the execution of the supply chain process, requiring a continuous flow of materials between operations, vendors and customers. Supply chain management focuses on integrating information technology with manufacturing systems in order to create an effective network that collects data, analyzes systems and makes improvements.
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