Difference Between Logistics and Supply Chain Management

All the activities, associated with the sourcing, procurement, conversion and logistics management, comes under the supply chain management.Supply Chain Management, it is a broader term which refers to the connection, right from the suppliers to the ultimate consumer.

Logistics Management is a small portion of Supply Chain Management that deals with the management of goods in an efficient way.

Definition of Logistics Management

The management process which integrates the movement of goods, services, information, and capital, right from the sourcing of raw material, till it reaches its end consumer is known as Logistics Management. The objective of this process is to provide the right product with the right quality at the right time in the right place at the right price to the ultimate customer. The logistic activities are divided into two broad categories they are:

Inbound Logistics

The activities which are concerned with procurement of material, handling, storage and transportation

Outbound Logistics
The activities which are concerned with the collection, maintenance, and distribution or delivery to the final consumer.

Apart from these, other activities are warehousing, protective packing, order fulfillment, stock control, maintaining equilibrium between demand and supply, stock management. This will result in savings in cost and time, high-quality products, etc.

Definition of Supply Chain Management

Supply Chain Management (SCM) is a series of interconnected activities related to the transformation and movement of raw material to the finished goods till it reaches to the end user. It is the outcome of the efforts of multiple organizations that helped in making this chain of activities successful.

Supply Chain Management has a multi-dimensional approach which manages the flow of raw materials and works in progress (semi-finished goods) within the organization and the end product outside the organization till it reaches the hands of the final consumer with a complete emphasis on the customer requirement.

The flow and storage of goods inside and outside the firm are known as Logistics. The movement and integration of supply chain activities are known as Supply Chain Management.

The main aim of Logistics is full customer satisfaction. Conversely, the main aim of Supply Chain Management is to gain a substantial competitive advantage.

Gazi Sanaul Hasan