Difference in Supply Chain and Logistics
A supply chain is the network between a company and its suppliers and customers that includes all the transactions involved in transforming raw goods into salable products.
The network includes the activities, people, technology, information and resources, while the functional teams involved in the company’s network includes sales, sourcing, procurement, production, logistics and customer service.
Logistics and logistics management is a subset of processes that fall under supply chain management that plans, executes, reports and coordinates the movement of goods within an organization’s network of stakeholders.
The goal of logistics is to get the product from point A to point B at the lowest cost with the best service.
A supply chain, on the other hand, is the coordination, management and strategy that drives the flow of data, information and logistics to deliver the best product and service to all stakeholders in the process of converting raw goods to the end salable product.
Learn more about what a supply chain is in video form:
When the activities of a supply chain are brought together into a single vision, supply chain management drives a competitive advantage by executing faster, reducing friction through all touch points between internal and external stakeholders, thus bringing more transparency and efficiencies throughout the process to deliver the end product to the ultimate customer in a manner that exceeds their expectations.
To sum up logistics and supply chains, think of a football game where logistics is the game on the field of play and the supply chain is the stadium where the game is played.
From the game perspective of the analogy, the movement of the ball up and down the field of play to deliver a score is logistics.
The stadium, on the other hand, represents all the physical and communication components. Think of the massive amounts of money put into a professional football stadium to deliver the best experience for the buying customers (the fans). There is the stadium itself, plus the communication points between coaches in the box to coaches and players on the field. The communication network allows calls, still pictures and replay videos to execute to the highest levels to score points and have the customers standing on their feet cheering for more.
The feedback mechanism of scoreboards, referees, replay screens, and for those really into the game, radio commentators (providing play-by-play and overall game analysis), give feedback all along the way through a scoring drive to assist in delivering the very best results.
In the article Logistics and Supply Chain Management – Comprehensive Guide and The Ultimate Comparison Guide on Freight & Logistic Services we take a deeper dive into the topic if you are interested in more on the subject.
Professional Organizations Associated with 3PL’s and Supply Chain Management Include:
- Counsel of Supply Chain Management Professionals (CSCMP)
- Transportation Intermediaries Association (TIA)
- International Warehouse Logistics Association IWLA)
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