Differences Between Logistics and Supply Chain

Logistics and supply chain management are some terms that are prevalent and have been used in the modern world of business and other areas that involve several activities, which include military operations among others. Apparently, it has become difficult for people to indicate whether one is practicing logistical management or supply chain management leading some professionals even to use the two terms interchangeably. However, there exist a significant number of differences between logistics and supply chain management that are important for one to understand.

• What is Logistics?

Logistics is a term used to describe the process of handling goods within a specific department while at the same time keeping an inventory document of the status and whereabouts of different inventories. Besides, logistics can be defined as the process of planning, execution, and control of the movement of goods and other related activities.

• What is Supply Chain Management?

Supply chain management is a terminology used to describe all the activities, which include the purchase of raw materials, receiving of raw materials, manufacturing, and production of goods, and delivery of the desired goods to their respective customers or destinations.

Differences Between Logistics and Supply Chain

1. Goals and Aims of Logistics and Supply Chain Management

One of the major difference between logistics and supply chain management is their intended goals and objectives within an organization. The goals and objectives of logistics within an organizational department is ensuring that customers attain maximum satisfaction during their interactions with the organization. Logistical officers ensure that anything that is needed by the customers is accessed with ease and it is acquired in the right quality and quantity. On the other hand, supply chain management has the goal and objective of ensuring that the company achieves a competitive and comparative advantage through effectiveness and efficiency. More importantly, supply chain management ensures that the company procures laws materials at lower prices while selling finished goods at the highest prices possible.

2. Organizations Involved Logistics and Supply Chain

The number of organizations involved is another aspect that can be used to highlight the difference between logistics and supply chain management. Logistics is involved in a single organization because there are no logistical activities that are required when one company is interacting with the other company. Logistical operations are confined and restricted to an individual organization and the customers willing to cooperate with the team. On the other hand, supply chain management is involved with multiple agencies that are interacting with the company on a daily basis. It is important to highlight that supply chain management must interact with organisations supplying raw materials, companies delivering or transporting finished goods, and companies purchasing their finished products.

3. Evolution and Development of Logistics and Supply Chain

The evolution and development of logistics and supply chain management form one of the fundamental differences between the two terms. According to historians, logistical management has existed for a lengthy period and has passed the test of times since it currently exists despite development in technology. Historians highlight that logistics was prevalently used in traditional empires for military operations and involved transportation of both firearms and military personnel among others. On the other hand, supply chain management is a modern aspect that emerged in the 19^th century. The aspect has grown to the point that it is currently being incorporated in all business organizations and government departments. Moreover, supply chain management is a stand-alone department within the company and a course by itself in different learning institutions around the world.

4. Departments and Sections of Logistics and Supply Chain

The number of departments and sections involved in logistical management and supply chain management shows some significant number of differences between the two practices. It is worth noting that the number of sections in supply chain management is higher as compared to those in the logistical department because supply chain management is involved and interacts with multiple organizations. Some of the sections within logistical management include inventory, warehousing, and transportation. Supply chain management has a significant number of sections, which include product development and testing, customer service and satisfaction, integration and information sharing, logistical activities, performance measurement, and procurement and manufacturing among others.

5. Relationship with One Another

There exist a significant relationship between logistical management and supply chain management. Although many people think that they are different departments with each entitled to handle its activities, the logistical department is a section of the supply chain management that handles specific tasks. It is important to highlight that logistical the supply chain department can handle activities without interfering or lowering the quality of the services offered by this administration. This explains why some organizations do not have operational, logistical department but have operational supply chain management department, which handles logistical issues.

6. Relationship with Other Departments

Similar to their interactions with other organizations where supply chain management can interact with multiple companies, it looks like supply chain management has an edge when it comes to cooperation with other departments within the organization. The logistical administration does not have active roles in different departments while supply chain management has a high probability of participating in affairs of other agencies through research, marketing, and ordering raw materials for manufacturing department.

Table Showing Differences Between Logistics and Supply Chain Management

Summary of Logistics and Supply Chain

• Differentiating both logistical management and supply chain management is an essential aspect because one can have a conceptual picture of measuring the performance of each department in a reasonable way.
• Moreover, understanding the role of each department prevents the conflict of interest while at the same time creating boundaries between various departments within the organization. Limits are efficient when determining the allocation of resources in each division.

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