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Why Logistics Are An Integral Part Of Supply Chain Management?

Why Logistics Are An Integral Part Of Supply Chain Management?

Complexity in planning supply chains is rising at an unprecedented rate. That’s why it’s important to source a great transportation company that is reputable and reliant. When it comes to satisfying customers, logistics management is one component of the supply chain that top executives can’t afford to overlook. Logistics is the part of the supply chain that coordinates the creation, movement, and storage of products, services, and associated data from their origin points to their consumption points to fulfill demand.

Supply chains that employ cutting-edge logistics, lean management, and optimization techniques are the most productive, economical, and long-lasting. Supply chain management is a relatively new concept, and understanding how logistics fits into the bigger picture will help you better use this growing field.

The supply chain and logistics are often lumped together, creating a false impression that they are the same. Both are necessary for a smooth supply chain, but it’s essential to recognize their distinct roles. They share some territory but are not identical. Find out what sets SCM  (Supply chain management). Apart from Logistics and why Logistics is crucial to SCM by reading this post.


Explaining Supply Chain Management

In business, “supply chain management” refers to coordinating all activities, from the procurement of inputs to the distribution of finished products to customers. That means interacting with service providers and other partners, analyzing and monitoring their performance, and keeping tabs on the overall performance of all connected parties. Although the term “supply chain management” has multiple meanings, the following four are the most crucial to the success of today’s top businesses.

  • Purchasing

Managers in the supply chain are responsible for ensuring the quality and efficiency of the materials used by the company. If manufacturing, procurement, and delivery go smoothly, supply chain managers must work with suppliers.

  • Operations

Supply chain leaders who are responsible for operations management need an in-depth knowledge of demand forecasting to avoid either an excess or a shortage of inventory. It’s crucial for a supply chain’s performance because revenue losses due to mistakes here could be devastating.

  • Resource Management

Resource management is an integral part of the supply chain of an organization. It ensures that the right resources move through the supply chain at the right time, which helps you make the most of your production schedule and improve efficiency. Resource management ensures that you don’t promise more than you can deliver and that your production schedule is always reasonable and attainable.

  • Logistics

Supply chain management relies heavily on logistics, including planning, purchasing, warehousing, production, transporting goods, and so on. Logistics are the backbone of any supply chain. Since the logistics industry is customer-centric, any problems that arise are addressed first and foremost in the interest of the final user.


What is Logistics Management

Logistics, a subset of supply chain management, is planning the safe and efficient transport of goods from the point of origin to the final destination, whether via a single mode of transportation or several. It is already vital in supply chain management, but its significance proliferates. Logistics management is essential in coordinating and keeping tabs on shipping, receiving, storing, managing stock, and distributing goods. 

Planning, controlling costs, and carrying out transport operations are at the heart of logistics management, as is the ongoing incorporation of all relevant parties. It is impossible to meet consumer demand without the help of efficient product movement, which is primarily influenced by logistics management.


Similarities of Supply Chain Management & Logistics

Both logistics and supply chain management have several things in common with one. Both of them are working toward the shared objective of improving the efficiency of the supply chain and ensuring that the end consumer is satisfied. By monitoring the flow of commodities and placing a priority on prioritizing the coordination of labor, resources, and facilities, they both make sure that products move through the supply chain in a timely and effective manner. 

Supply chain management is responsible for establishing both the structure and the strategy of the logistics process, which includes the arriving and the existing transportation. They both emphasize the final goal of the supply chain, which is to fulfill the client’s requirements and the route that the products travel to reach the customer.


The Difference Between Supply Chain Management And Logistics

Despite the similarities mentioned above, there is a fundamental distinction between the two that cannot be misunderstood. Supply chain management focuses on the inner workings of the supply chain, while logistics deals with the various tasks involved in the supply chain. Supply chain logistics management only focuses on the production’s ins and outs, the efficacy of delivering items, and, eventually, fulfilling your organization’s commitment to the final client. 

The sphere of influence of supply chain management extends far beyond manufacturing and into strategy, sourcing, and others. Supply chain managers need access to the appropriate resources to effectively monitor, enhance, and optimize internal and external operations, plan for the future, and mitigate any potential issues that may develop. Here are some of the main difference you should know:

Basis for Comparison Logistics Management Supply Chain Management
Meaning Logistics refers to managing an organization’s internal and external supply chains. Supply Chain Management is the process of planning, organizing, and controlling the flow of goods and services along the supply chain.
Objective Complete Customer Satisfaction Strategic Benefit
Evolution Logistics as a concept has been around for a long time. The term “Supply Chain Management” only emerged in the last several decades.
Between the two of them Logistics Management is a part of Supply Chain Management. The term “Logistics” has been replaced by “Supply Chain” in modern business.



Logistics & Supply Chain Are Linked

Logistics management and planning involve complex problem-solving to ensure that goods are transported from A to B without causing delays for any link in the supply chain. Before a new product or service is introduced to the market, supply chain management might be included in the initial creative stages. While product designers are still sketching ideas, logistics managers can help figure out how to set up the supply chain to serve customers best.

In its simplest form, supply chain management is the process of establishing a product’s requirements, such as its exact form and the materials it will require. In addition, the logistics manager calculates the time and cost of transporting the materials to the manufacturer as part of this procedure.

Additionally, consider how Supply Chain Mapping can also help. Supply chain mapping means gathering information about your suppliers, their own suppliers, and the people who work in your supply chain to create a global map of your supply network



Final Words

Meeting customer demands and enhancing their overall experience depends on effective supply chain management and logistics. Risks like the possibility of cargo damage, assembly line stoppages, and unfulfilled delivery can be reduced by careful logistics and resource planning by the supply chain managers. Supply chain management can better anticipate customer needs with the information provided by logistics.

Logistics that are not optimized and trustworthy will hinder the operation of the supply chain. If you’re looking for more guidance or assistance with logistics and supply chain services, you now have the tools to find a reliable provider. Contact I-Way transportation, and we will be happy to assist you in any way we can.

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