Are logistics and supply chain management interchangeable terms? Although they’re often used as such, there is in fact a distinction. Let’s explore the difference.
Logistics are Part of Supply Chain Management
Logistical operations are components of the larger supply chain management effort. These sub-processes are what makes the supply chain tick, and herein lies the confusion. Just as skating and stickhandling are parts of hockey, they are not, by definition, hockey itself.
According to Michigan State University Online “Purchasing, materials handling, logistics, transportation, inventory control, and supply chain management have continued to evolve, causing many of these functional areas to intersect with one another. This intersection has resulted in blurred definitions for some of these terms such as logistics and supply chain management.”1
Supply Chain Management is the Building of the Framework
Supply chain management can be defined as the “overarching concept that links together multiple processes to achieve competitive advantage.”1 Indeed, competitive advantage is the main focus of supply chain management, involving a careful accounting of the risks and rewards of various approaches. Supply chain management is a newer term than logistics and involves organizations working collaboratively to build the best possible framework to facilitate the journey from raw goods to finished products. From the mining of lithium to the purchase of an electric car, from the coffee bean harvest to a latte with friends at your local coffee shop, supply chain endeavours to optimize the process.
Logistics Plans, Implements and Controls the Process
The main focus of logistics is meeting customer requirements, largely through the moving and storing of these goods. Different logistics companies provide varying services within the supply chain management spectrum, ranging from narrow to broad scopes.
The Council of Supply Chain Management Professionals states that logistics is “part of the supply chain process that plans, implements and controls the efficient, effective forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet the customer’s requirements.”2
Supply Chain Management vs. Logistics: A Matter of Semantics?
Ultimately, the distinction between logistics and supply chain management is nuanced and, to some extent, a matter of semantics. What’s more important is an understanding of the system as a whole. Who does what? How? Not surprisingly the approach to supply chain management evolves alongside the technological, business, and political landscapes.
What doesn’t change is the essential nature of the supply chain and the role it plays in our day to day lives. Numerous tasks make the supply chain work; purchasing, materials handling, logistics, transportation, inventory control, the sourcing and processing of goods, production and manufacturing, inventory and order management, short and long term storage, wholesaling and retailing are just some of the steps that must be completed before many of our goods make their way to end users.
An often invisible army of logistics professionals makes it work, including shipping companies, warehouse workers, truck drivers, reverse logistics specialists, and third party logistics companies. The goods we enjoy each day, and the components found therein, are moving by land, sea, and air even as we speak.
New Supply Chain Challenges
Supply chain management is not only a crucial function, but a competitive one as well. While some may have previously considered it dry subject-matter, that notion has been eradicated by the constant headlines generated by a seemingly unending parade of fresh challenges faced around the globe, with the pandemic, weather events, and geopolitical turmoil all playing a part.
Warehousing, Inventory, and Transportation Services
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Our extensive list of services ensures that we are capable of meeting our customers’ needs, however unique. Contact Canadian Alliance today and find out how we can help you.
Cited Sources
1 Michiganstateuniversityonline.com. Accessed April 12, 2022. https://www.michiganstateuniversityonline.com/resources/supply-chain/is-logistics-the-same-as-supply-chain-management/.
2 “The Differences between the Supply Chain and Logistics.” Blume Global. Accessed April 12, 2022. https://www.blumeglobal.com/learning/differences-between-supply-chain-and-logistics/.