Logistics and supply chain management are closely related, so much so that
it might be tempting to use these terms interchangeably.
But there are distinctions between the two fields. Let’s take a look at
supply chain management and logistics more in-depth. Here is how supply
chain management is different from logistics management and how they work
together.
Logistics
Logistics is concerned with the storage and transportation of products,
and covers things like warehousing, storage, fleet management, inbound and
outbound freight, reverse shipping and communication during transit.
It can also include – depending on the company – customer service, price
negotiation for different parts of transportation, manufacturing and
packaging.
Supply Chain
Managing a supply chain typically means looking at the bigger picture, an
umbrella covering all the components of procuring and sourcing goods.
Supply management means establishing and maintaining the business
relationships that allow a company to bring its goods to the market.
Logistics is just one part of that process, involving the movement of
freight from one place to another.
Other pieces of supply chain management include cost allocation,
third-party negotiation, managing supply and demand and distribution.
How do logistics and supply chain management overlap?
We’re saying all this with the caveat that the definitions for market
logistics and supply chain management can vary from company to company. In
fact, a good example from Inbound Logistics occurred when it asked its
readers about the difference between supply chain management and logistics
in 2003, it got a host of different answers:
“In my opinion, there is very little difference between the two,” one
respondent said. “Logistics was always a military term.”
“Supply chain management incorporates the field of logistics,” another
replied. “Logistics is a number of sub-processes within SCM.”
“If there is a distinction, it may be in the degree to which planning and
collaboration has spread,” still another reader said. “Logistics was a
specific business organization required to form strategic alliances and
leverage logistics volumes (among other things). Today, in best practice,
many areas collaborate with each other, including the logistics group.”
In the Inbound Logistics piece, author Dr. Edward J. Marien writes that
logistics differs from SCM in that it “comprises cross-function and
inter-enterprise logistics processes.”
Here are five tips for effective logistics management from The Daily MBA.
(We like to think that a supply chain manager could learn from them as
well.)
- Plan Ahead
An effective logistics manager is a good planner. With a solid plan, there
are fewer chances for delays along the supply chain. - Don’t Panic
An effective logistics manager can think on their feet and come up with
short-term solutions when a problem arises. When your team sees you
staying calm during a crisis, they’ll remain calm as well. - Don’t Get Too Confident
An effective logistics manager remembers Murphy’s Law: Anything that can
go wrong will. That’s why it’s important to have contingency plans in
place. It’s also a good idea to have a whole network of suppliers and
vendors rather than relying on just one. That brings us to our next point… - Cultivate Strong Relationships Along The Supply Chain
An effective logistics manager make an effort to build good relationships
with vendors and suppliers. Goodwill can keep their operations moving. A
soured relationship might bring things to a halt. - Learn From Your Mistakes
An effective logistics manager recognizes that mistakes happen to even the
best of us. They don’t make excuses. They do learn from them, and realize
that success can come from failure.
Managing an international supply chain is just part of what we do at Mars
International. By making sure our global network reaches our customers’
doors, our clients get their products on the market in a way that’s quick,
reliable and cost-effective.
We give our clients a competitive edge by keeping management overhead to a
minimum, and building relationships in a way that lowers risk.
Contact us today to learn more about how Mars International’s supply chain
management process can work for you.