Are Supply Chain Management and Logistics the Same Thing?

When it comes to business, the words supply chain management and logistics are used often, and some people even use them interchangeably. But do they mean the same?

In this article, we discuss the meaning of both terms and the key differences between them.

Are Supply Chain Management and Logistics the Same Thing?

No, they’re not the same thing. However, the terms evolved from the same background: Logistics was a term used to describe the supply of goods and services to the end customer, which later evolved into the term supply chain management.

A research paper puts it like this:

“Practitioners and educators have variously addressed the concept of supply chain management (SCM) as an extension of logistics, the same as logistics, or as an all encompassing approach to business integration.” [efn_note] Cooper, Martha C., et al. “Supply Chain Management: More Than a New Name for Logistics.” The International Journal of Logistics Management, vol. 8, no. 1, 1 Jan. 1997, pp. 1-14, doi:https://doi.org/10.1108/09574099710805556. [/efn_note]

What Are the Key Differences Between Supply Chain Management and Logistics?

  • Logistics is connected to the storage and movement of goods, while supply chain management is used for the chain of activities that lead to the finished goods from raw materials. The goods and information flow from the raw products to the end customer.
  • Supply chain management is concerned with a competitive advantage, whereas logistics leans toward customer service and support.
  • Only one organization is involved with logistics, while supply chain management involves multiple organizations such as suppliers, intermediaries, distributors, and customers.

What Is Supply Chain Management? And How Does It Differ From Logistics?


are-supply-chain-management-and-logistics-the-same-thing

To understand what supply chain management means, you first need to know what a supply chain is.

A supply chain is the network of individuals and organizations involved in manufacturing and supplying a product. It typically includes a manufacturer, suppliers, and customers.

A large company can have multiple supply chains. The complexity changes with the scale; for example, the global supply chain involves suppliers worldwide, which makes it much more difficult to manage.

Therefore, supply chain management is the management of the coordination of a product’s creation. It includes sourcing raw materials, manufacturing, logistics, and delivery of the final product.

An operations manager oversees the entire process: They ensures that events are properly coordinated and that the right products are supplied at the right place and time.

What Can Good Supply Chain Management Do for Your Business?

Supply chain management is not just related to goods; It helps control service performance as well. For example, it can …

  • Increase customer value
  • Help you gain a competitive advantage in the marketplace
  • Reduce expenses
  • Deliver products to the customers faster
  • Avoid supply shortages

Supply chain management is an important aspect of any business dealing with the shipment or storage of product. Any business that is struggling due to poor supply chain management has a higher risk of facing an economic crisis.

What Are Logistics? And How Does It Differ From Supply Chain Management

Logistics is a process within supply chain management that oversees the acquiring procedure of materials, storage of goods, and transportation to get to the end customer. Unlike supply chain management, the term logistic has been around for a long time. Logistics is an activity included in the supply chain. It includes …

  • Collection from suppliers
  • Efficient material handling
  • Package labelling
  • Organization and warehousing
  • Inventory management for distribution or production
  • Demand planning
  • Order fulfillment

Logistics is an important part of businesses. It revolves around the movement of products. Successful logistics look include …

  • Increased process efficiency
  • Lower production costs
  • Better customer experience
  • Improved use of warehouse area
  • Increased production rates
  • Good inventory control
  • Increased supplier and customer satisfaction

A logician, also known as a logistics supply manager, is responsible for appropriate transportation and managing inventory. They also monitor other operations such as warehousing, transportation, and supply chain processes.

Should You Work for a A Supply Chain and Logistics Company?

Most people don’t grow up wishing to work in supply chain management. You can say the same for most jobs, but here are 8 reasons why one should consider working in this field:

  1. Working with a supply chain group exposes people to opportunities and allows them to produce strategies to implement initiatives.
  2. They can learn valuable skills, including problem-solving, communication, and analytics.
  3. They can watch their hard work pay off as they make a fulfilling difference.
  4. The regularly changing environment and the fast pace will keep the employees on their feet, and they won’t get bored.
  5. Ever since supply chain organizations have developed and evolved, production has been made efficient, creating high-tech roles.
  6. People don’t just get to work and learn in their own company but also with other organizations.
  7. Working with supply chain processes gives you a perspective of a business as a whole which is important for anyone working in that field.
  8. Various jobs are available, so diversity provides more options for employees to develop their interests. This also welcomes new opportunities to create a portfolio of professional skills.

When Should You Hire a Supply Chain and Logistics Company?

If you’re not looking for a career in supply chain management or logistics, but want to work with a firm that deals with these services, consider these benefits:

  • Working with supply chains will help you forecast demands so you can be well prepared for unstable economies. Such communication will allow your business to have a higher efficiency rate.
  • Your system will respond better to the customer’s requirements.
  • Your relationship with dealers and distributors will improve.
  • There will be better communication resulting in improved coordination with distributors, dealers, suppliers, and transport companies.

If you’re looking to store and distribute your products with a supply chain firm, the MacMillan Supply Chain Group  is here for you. Our experts are here to guide you so you can ensure that your products will be taken care of. Call us at 416-941-2759 if you’d like to find out how working with us can help your business.

MacMillan Supply Chain Group Elevate Your Logistics Experience

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Meet the Author:

Kate

Kate

Kate Nowak isn't your typical author. With a career that's as diverse as the landscapes she's traversed, Kate embodies the spirit of the Canadian supply chain and transportation industry. Her passion for global trade burns brightly, fueled by firsthand experience across every facet of the logistics world.
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