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Are Logistics and Supply Chain Management the Same?

Posted by [email protected] on Feb. 15, 2022  /  Subscribe 0

There is some confusion about the meanings associated with "logistics" and the phrase "supply chain management." The fact is the two of them exist in the same universe. That universe incorporates all types of companies, individuals, processes, and protocols. Over time, the evolution of logistics and supply chain management has made the two virtually indistinguishable. When we hear the terms applied to everyday life, we don't distinguish between the two with much confusion.

Once Upon a Time

Years ago, back in the dark ages, before the invention of the fax machine and the Internet, there were people sequestered in tiny offices scattered around manufacturing plants, production floors, and warehouses across the planet. People were brought together at the right place, at the right time, and for the right price. These unknown warriors were called "purchasing agents." purchasing agents issued purchase orders to companies that supplied whatever they needed to wherever they were located. Purchasing agents used Rolodex and dialed telephones to accomplish their tasks, equipment unknown in today's environment.

Back to the Future

Fast-forward about a thousand years, and we're smack dab in the middle of the modern age where text messages, radio frequency scanners, bar codes, and automated warehousing systems dominate the world and human beings are few and far between. Times changed and with them, so did the technological advantages in communications, data, and manufacturing. Orders are made, taken, and produced without a single human involved in the process. And yet there remains the human element nonetheless. Without humans, the issues that often arise from complex and complicated activities would go unresolved. The whole thing makes the human element even more critical.

Get Clear

Let's be clear about the two terms and what they mean precisely. Logistics is defined as what must be done to plan and organize a complicated activity or event involving many people. On the other hand, supply chain management is defined as the active management of supply chain activities to maximize customer value and achieve sustainable competitive advantage. If you're wondering if the two definitions sound a lot alike, you're right. The evolution of the term "supply chain management" comes from the early 1980s and is a redefinition of "logistics" for a more modern-thinking and modern-speaking world.

What's the Difference?

There is no difference; they mean the same thing. That brings about another question. If there's no difference, what's the big deal? The big deal is that the evolution of logistics into supply chain management is like the evolution of communications from two orange juice cans connected with string to the latest iPhone. The current environment uses the latest applications, logarithms, and Artificial Intelligence to determine the proper flow of materials from start to finish. It takes education and a desire to solve problems. It also takes a desire to become a key management team member focused on achieving success. Think Albert Einstein meets Hadron Particle Accelerator.

Starting Points

Despite all the diatribe and lessons in semantics, supply chain management covers so much territory that it's impossible to define it easily. It means different things to different groups, but the one thing is for sure; it takes in a lot of different activities:

• Point of Origin - Domestic or international resources must be qualified, vetted, inspected, and accepted before any transactions occur.
• Materials Handling - How products and materials must be handled to reduce damage and increase efficiency for processing.
• Raw Material - Maintaining quality specifications and dimensional requirements to avoid production interruptions.
• Planning - Scheduling and organizing materials transport and inventory for production and final delivery.
• Implementation - Installing computer tools, communication systems, and other technologies to increase productivity and reduce costs.
• Inventory Management - Providing for the in-flow of raw materials and the out-flow of finished goods to consumers.
• Transportation - Safe and efficient movement of materials into and out of production plants and factories to meet production and sales demands.
• Licensing - Regulatory compliance administration for local, state, federal, and international concerns and conditions for goods movement.
• Customs Documentation - Working with off-shore and domestic agencies to smooth the flow of goods across international boundaries.
• Customer Service - Monitoring and responding to changes and issues relating to customer satisfaction support for products manufactured.

Who's in?

People think terms like supply chain management and logistics are highly technical and require a lot of preparation to get into. Nothing could be further from the truth. The folks involved in the supply chain process and logistics services come from various backgrounds. Truck drivers have an inside track in transportation management, and warehouse forklift operators understand inventory control like few others. The fact is that it doesn't take a huge amount of education and experience to get into the supply chain world. All it takes is a desire to go for it and a partner to help get things in order. Fortunately, some schools offer online education that makes all the difference. Education takes a person from wanting to be in supply chain management to actually entering the supply chain management industry.

Ready? Go!

Professionals and newbies alike understand the value of working with others to gain knowledge, understanding, and experience. People who know the importance of the supply chain in today's world also understand the importance of being a key player. The beauty of it all is that there are so many openings with so much opportunity combined with the ongoing advantages of working in such a critical field. All that is required for admittance to the ever-expanding world of logistics or supply chain management is a desire to be there.

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