People generally interchange these terms synonymously. However, there is a huge difference between ‘supply chain management’ and ‘logistics management.’
Let’s go through both the concepts individually:
What is Supply Chain Management (SCM)?
Any product, when received by the consumer, is the culmination of the combined efforts invested by the entire supply chain. Supply chain management is the general integration of all the supply chain that is involved in bringing the end product to the consumer. That includes the movement and storage of raw materials, their movement and procurement of frequently consumed items that are used during the production process. It generally manages the flow of goods within an organization and helps ensuring it’s availability as and when required by the organization. Supply chain activities encompass everything from initial production phases, sourcing, and storage, as well as information systems which are required to integrate these activities.
Through effective supply chain management, a company can be sure that all its supply chain activities are running smoothly and functioning to provide maximum customer value. Those companies who jointly form the “supply chain” are normally linked through information and physical flows to ensure cooperation and integrity. Information flows helps the supply chain keep track of each ones future needs and maintain the flow of goods.
What is Logistics Management?
The Logistics management is a branch of supply chain management, relating to procuring, maintaining and placing material or facilities for an organization, and plays an integral part in a supply chain by keeping the physical flow moving. It maintains the flow of goods and services from the point of origin to the point of consumption (until the product is fully prepared).
Logistics encompasses transportation and managing the distributing process of those products. It’s usually focused around the physical management of the products, including transportation and handling of the product from the start till the end. As such, it makes provision of products and physical resources to the company more effective, and ensures timely distribution on later stages.