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The difference between logistic and supply chain

AIR FREIGHT SERVICES

AIR FREIGHT SERVICES

Shippers often confuse the terms “logistics management” and “supply chain management”. Each word is used to describe very similar functions and operations in the transportation industry. However, there is a difference between these terms.

Most professionals in the US determine logistics as a subcategory of supply chain management. However, in Europe, Logistics Management (LM) is considered to be a more widespread concept than Supply Chain Management (SCM).

 

Logistics Management

  • Definition

Logistics management refers to managing the flow of goods, information, and resources from the beginning point of external origin to the point of consumption and reverse. Also, logistics has a vital effect on shipped goods and includes all activities involved in the shipping process. Logistics manages the flow within a company and between a company and its suppliers and customers.

  • Processes

Planning

Scheduling

Implementing

Material handling

Packaging

Distribution

Storage of Goods

Coordination among carriers

Fleet management

Control Procedures

 

Supply Chain Management

  • Definition

Supply chain management is control over integrated network processes, providing the end customer with a product or service and meeting all his/her requirements. It includes numerous aspects of logistics management and demand planning which coordinates processes within and among companies.

  • Processes

Logistics flows

Customer Order Management

Manufacturing

Distribution

Cost Allocation and Control

Third-Party Collaboration

Management of Supply and Demand

Negotiating Pricing

Inventory Control

 

Key differences between logistics management and supply chain management (SCM):

Logistics management mostly involves transportation functions, focusing on short term goals. LM concentrates on getting freight from point A to point B – on time and in the most cost-efficient way possible. Also, it includes creating partnerships with trucking companies.

Supply chain management controls a broader number of functions and concentrates on achieving customer satisfaction and maximizing profit in a long-term way. Also, SCM covers the management of supply and demand, control over cost allocation and all collaborations with the transport management system.

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