Difference between logistics and supply chain management 

Logistics Management is a small portion of Supply Chain Management that deals with the management of goods in an efficient way. Although, if we talk about Supply Chain Management, it is a broader term which refers to the connection, right from the suppliers to the ultimate consumer. People are quite puzzled between these two concepts.It has been noticed that there has been a drastic change in the manner in which business was conducted many years ago and now. Due to the improvement in the technology, you can see all the areas of business has been developed. Supply Chain Management also evolved as an improvement over Logistics Management, from past years. Now coming to the point, let’s start understanding the difference between Logistics and Supply Chain Management.

Logistics Vs Supply Chain Management

Comparison Chart

BASIS FOR COMPARISONLOGISTICS MANAGEMENTSUPPLY CHAIN MANAGEMENT
MeaningThe process of integrating the movement and maintenance of goods in and out the organization is Logistics.The coordination and management of the supply chain activities are known as Supply Chain Management.
ObjectiveCustomer SatisfactionCompetitive Advantage
EvolutionThe concept of Logistics has been evolved earlier.Supply Chain Management is a modern concept.
How many organizations are involved?SingleMultiple
One in anotherLogistics Management is a fraction of Supply Chain Management.Supply Chain Management is the new version of Logistics Management.

Definition of Logistics Management

The management process which integrates the movement of goods, services, information and capital, right from the sourcing of raw material, till it reaches its end consumer is known as Logistics Management. The objective behind this process is to provide the right product with the right quality at the right time in the right place at the right price to the ultimate customer. The logistic activities are divided into two broad categories they are:

  • Inbound Logistics: The activities which are concerned with procurement of material, handling, storage and transportation
  • Outbound Logistics: The activities which are concerned with the collection, maintenance, and distribution or delivery to the final consumer.

Apart from these, other activities are warehousing, protective packing, order fulfillment, stock control, maintaining equilibrium between demand and supply, stock management. This will result in savings in cost and time, high-quality products, etc.

Definition of Supply Chain Management

Supply Chain Management (SCM) is a series of interconnected activities related to the transformation and movement of raw material to the finished goods till it reaches to the end user. It is the outcome of the efforts of multiple organizations that helped in making this chain of activities successful.

These organizations may include the firms with whom the organization is currently working like partners or suppliers, manufacturers, wholesalers, retailers, and consumers. The activities may include integration, sourcing, procurement, production, testing, logistics, customer services, performance measurement, etc.

Supply Chain Management has a multi-dimensional approach which manages the flow of raw materials and work in progress (semi-finished goods) within the organization and the end product outside the organization till it reaches the hands of the final consumer with a complete emphasis on the customer requirements.