The presence of the global economy has altogether made supply chain management the most crucial thing for modern businesses. One can find partner companies anywhere, dealing with numerous challenges everyday.. But, when it comes to supply chains, people generally tend to use the terms ‘supply chain’ and ‘logistics’ interchangeably.Read More
Logistics are an essential part of the whole supply chain process. However, the majority of people usually exclusively use both of these terms. In other words, people are not aware that both these terms do not mean the same. Therefore, it is necessary to understand the difference between the terms.
Supply chain refers to the whole process through which a product or a service is delivered to a customer. The supply chain constitutes a primary position in commerce and plays a vital role in every business activity. The supply chain comes with a few elements. These elements are an essential aspect of the chain. The elements are as follows:
- Product Development
- Customer Service
All the elements mentioned above play an essential role in the whole supply chain. Without these elements, the entire process’s efficiency will be affected.
From a business point of view, logistics also hold immense importance. In simple terms, logistics refers to the series of activities that take place between the point of origin and the endpoint. The activities usually revolve around a product or a service that is being delivered to a consumer. These activities are undertaken to meet the needs and demands of the consumer and the business entities.
The Points of Difference Between the Supply Chain and Logistics
Here are a few points that highlight the difference between the logistics and supply chain. These are as follows:
Both the terms are different from one another. The primary and fundamental difference between them is that logistics are the supply chain’s sub-category. In other words, logistics are the series of activities that involve the flow and movement of goods and services from the point of origin to the endpoint. In general terms, logistics are responsible for the flow of goods and services from one place to another. Other than this, they are also responsible for maintaining the effectiveness of the whole chain. Thus, it would be correct to say that the supply chain is complete while logistics is just part of that process.
Movement of Goods
It is the logistics only through which there is a movement of goods from one place to another. Thus, the comprehensive supply chain functions because of efficient logistics management. Hence, better transportation and storage implies excellent supply chain management. The supply chain is a complete process, but brilliant logistics make the supply chain highly effective and exceptional.
Storage and Distribution
Logistics are also competent to store and distribute the goods to the end consumer. It is through logistics only that the goods are kept at a warehouse. As soon as the products reach the place, they are stored at a warehouse by the logistics manager. Once the required quantity is ready to dispatch, they are distributed effectively among the consumers. Among logistics, real-time software is the most used method for the distribution of commodities last-mile delivery.
Numerous Business Organisations
An efficient supply chain brings all the significant elements of the business together. When it comes to the supply chain, it functions in multiple or numerous business organisations. For instance, the supply chain brings transport, logistics, manufacturers, wholesalers, and retailers. At the same time, all these are part of logistics. However, it is the entire supply chain that brings every aspect closer to each other. Here, the other significant difference is that the supply chain works with multiple disciplines. However, logistics are limited in their approach. Therefore, they might look the same, but there is a difference in them.
Video Credit – Zmodal
The supply chain is the chain that connects everyone that is involved in the product development to the distribution phase. In other words, it is the supply chain that connects the entire business entity with the other parties involved.
The supply chain works in various areas and not in a single space or field. For instance, the supply chain enables partnerships and better relationships with the other parties involved in the business. For example, it improves relationships with other parties such as retailers, wholesalers, suppliers, and other parties. Inventory management and control are also possible through the supply chain. Therefore, it would be correct to say that the supply chain can also function in various fields and areas.
Hence, it would be fitting to conclude that both the supply chain and logistics are different from one another. However, logistics is a part of the supply chain. While on the other hand, the supply chain is an independent process that constitutes several other activities. Therefore, when the supply chain is solid and practical, a business organisation will also receive a competitive edge and other significant benefits.