Global supply chains are essential to world trade, and the underlying logistics involved in sending, receiving, moving and storing goods is critical to that success. Not surprisingly, the terms “supply chain” and “logistics” have merged and are often confused and used synonymously with each other.
Although many people use the words interchangeably, there are many important differences between the functions, capabilities, inputs and outputs of each.
The main difference between supply chains and logistics to do is that supply chains are responsible for the overall replenishment, processing, and delivery of goods to the end customer, while logistics focuses specifically on the movement and storage of goods between different organizations in the chain.
So today we will explain the main differences between logistics and supply chain.
Logistics and supply chain: significance
Logistics is thus a subsection of the supply chain called supply chain in English.
The Council of Supply Chain Management Professionals states that logistics is “part of the supply chain process that plans, implements, and controls the efficient and effective flow and storage of goods, services, and related information between the point of origin and the point of consumption in order to meet customer needs.”
The difference between logistics and supply chain lies in the fact that the latter is a distinct part of the supply chain and is essential to the supply chain. However, each logistics operation is only responsible for its supply block.
Logistics and supply chain management: logistics plans, tools and controls
Logistics service providers are responsible for their part of the supply chain by taking care of:
- Plan how to move goods from one location to another, store those goods, and produce the correct information and documents for efficient reporting and processing
- Implement the handling and storage of goods by using transportation services and organizing short- or long-term storage
- Control how goods move, through fleet management, shipment tracking, technology, and collaboration with partner organizations
- Increasing value for supply chain partners
Logistics therefore moves goods from one place to another and must always have based on efficient transportation and storage. Logistics providers use a variety of resources in both land, air and sea transportation to move goods quickly and efficiently.
Logistics also stores goods temporarily until they are needed elsewhere by storing them until they are needed perhaps due to delivery to the final customer.
Supply chain and types of logistics organizations
To simplify, we can say that if goods are transported or stored, it is a logistical process. In short, logistics is a limited and distinct part of a larger, collaborative supply chain network.
There are many types of logistics activities, including:
- Internal logistics: some wholesalers, retailers and other large organizations may have their own internal logistics function
- Logistics serviceproviders (LSPs): companies that provide management of the flow of goods and materials between points of origin and final destination. The vendor will often manage shipping, inventory, storage, packaging, and security functions for shipments.
- Third-party logistics (3PL): these are specialized logistics service providers that offer a range of services to a wide range of customers, such as air, rail, or road freight, or specialized transportation and storage facilities, such as cold storage
- Reverse logistics: these organizations specialize in returning products to manufacturers, such as returns if they are defective or if the customer does not want the item
- Warehouse providers: some logistics companies only store goods and do not handle transportation
- Courier shipping: these logistics service providers deliver products to end customers and specialize in “last leg” deliveries.
So the supply chain process begins when a company receives an order for a product or service and ends when that product or service is successfully delivered to the end customer.
Supply chain and logistics: the functions
The supply chain oversees and directs the production, transportation, and delivery of goods and services from creation to final destination.
Supply chain also often controls other aspects of the order, inventory, and supply chain process.
- Promotes collaboration and partnerships: provides connections and the quickest ways
- Inventory management: identify when the stock of certain products is dwindling and organize the procurement of new items
- Order management: notices if there is an increase in orders by connecting to suppliers, manufacturers and other organizations in the chain
- Order, goods and shipment tracking: tracks the flow of orders, goods and other assets through the global supply chain
- Visibility: reporting on the flow of goods through the supply chain
- Problem solving: identifying and solving problems with the speed and quality of the entrusted brand.
Ultimately, having a strong supply chain and excellent transportation means having a key competitive advantage these days.
Guarantee your company the best and entrust your raw materials or finished products to the fleet of Fratelli Virdò Trucking.
