As a business, you’re constantly looking for ways to streamline your processes and reduce costs. And one of the best ways to do this is by implementing a good logistics and supply chain management system.
In this article, we will define logistics and supply chain management, and outline why you should consider implementing one if you want to improve your business processes. We will also highlight some of the benefits of such a system, including reduced costs, faster delivery times, and improved customer satisfaction.
So read on to learn more about the difference between logistics and supply chain management and why you should consider implementing either if you want to improve your business performance.
What Is Logistics?
The process of moving materials and finished products from the point of origin to the point of consumption is known as logistics. Logistics is an essential part of manufacturing and distribution in a modern, global economy.
Today, logistics remains an important part of global commerce. Major companies rely on a well-oiled logistical system — like the one found at https://www.shapefulfilment.com/fulfilment/uk-fulfilment/ — to move products from factories to retailers and consumers worldwide.
What is Supply Chain Management?
Supply chain management is a process that integrates the entire lifecycle of a product, from procurement, spend control and policy compliance to distribution, sales and service. The goal of supply chain management is to optimize the flow of products through the system and ensure that all elements are working together to meet customer demand.
The modern supply chain has become increasingly complex due to the proliferation of new products and services and the increasing number of competitors. In order to keep up with these challenges, supply chain managers must use advanced analytics techniques to monitor data streams across various system elements.
What Are the Key Differences Between the Two?
Logistics and supply chain management are two of the most commonly used terms in business today. However, there is a great deal of confusion surrounding their differences and how they work together. Logistics refers to the organized movement of goods from origin to destination. On the other hand, supply chain management is a process that helps manage all aspects of a business’s relationship with its suppliers. Together, they comprise what is known as the “supply chain.”
There are several key differences between logistics and supply chain management:
- Logistics focuses on moving physical goods, while the supply chain focuses on managing supplier relationships.
- Logistics deals with movement, while supply chain management deals with everything from procurement to production to delivery.
- Transport and storage are integral logistics components, while suppliers generally arrange these functions in supply chains.
- Logistics typically precedes production in a manufacturing process, whereas supply chains should follow production for optimal synchronization and quality control.
- Logistics tends to be less strategic than supply chain management; it primarily focuses on optimizing routings and processes while supplying goods to meet customer requirements.
- Finally, logistics may also encompass warehousing and back-office functions, whereas these are typically handled by suppliers or third-party providers in a supply chain operation. These companies provide invaluable behind-the-scenes services that help many industries optimize their supply chain operations. For example, in the automotive industry, 3PLs store and transport parts to manufacturing plants just-in-time for assembly. In retail, e-commerce brands rely on 3PLs to receive, pick, pack, ship, and often store inventory. 3PL services are also vital for healthcare business with stringent regulatory requirements. Healthcare Logistics Canada (or elsewhere) assist medical companies with navigating challenges around transporting pharmaceuticals, facilitating last-mile delivery of equipment between care sites, and managing biomedical waste. Their healthcare expertise establishes reliable logistics networks that uphold safety and compliance while still meeting patient needs efficiently.
Why Use Logistics for Your Business?
Supply chain managers use logistics to manage product flows throughout the entire lifecycle, from procurement to delivery to after-market service. By integrating physical and digital assets, logistics can improve visibility into product movements and reduce costs associated with inventory. In addition, logistics can enable companies to respond more quickly to changing market conditions by stocking more appropriate products in response to customer demand. By employing a sophisticated Inventory Management System like the ones offered by Datapel, businesses can ensure they stock precisely what customers demand, thus staying ahead of the curve and maintaining a competitive edge.
The main advantages of using logistics are improved organizational efficiency through better coordination of production and delivery networks, reduced inventory costs due to closer visibility into product movement, Improved customer responsiveness through faster order fulfillment, and reduced environmental impact through reduced waste.
Signs of a Healthy Supply Chain
A healthy supply chain is one that ensures products are delivered on time and in the correct quantity while minimizing waste and inventory. Here are five signs that your supply chain is in good shape:
- There is a regular flow of orders and deliveries
- Suppliers are able to quickly and easily fill orders
- There is little or no backorder or stock issues
- Products arrive at their destination in good condition and without damage
- There is minimal downtime due to shortages or interruptions in production
Both logistics and supply chain management are important disciplines that allow businesses to manage the flow of products and services efficiently. In this article, we discussed some key differences between the two that should be considered when deciding which is the right fit for your business. To choose the best approach for your business, it is important to understand what each entails and how they overlap. Hopefully, this article had given you a proper insight into which method is used for what purpose. Thanks for reading!
