How is Logistics Management Related to Supply Chain

Supply Chain Management (SCM) is the organization of processes from the manufacturing phase to their distribution, while Logistics Management is what makes sure this chain runs smoothly. This process involves planning, organizing, and evaluating all the technical information to ensure maximum efficiency[i].

Logistics Management is a part of everything, from administrators involved in education management to a chef calculating the number of ingredients he needs. Likewise, its role in the supply chain is essential.

A businesses’ success depends highly on how well the supply chain functions. Your supply chain model may be top-notch but if your Logistics Management is faulty, then that is a recipe for disaster.

Let’s look deeper into the relationship between Logistics Management and SCM.

SCM is the umbrella term that includes end-to-end optimization and movement of goods; from the raw materials to the final product[ii].

And Logistics Management, though a separate field on its own, is also a sub-category of SCM.  Here, you plan and efficiently manage the inventory to increase desired outcomes, such as reduced costs and improved customer satisfaction[iii].

For instance, a logistics manager will work out how to cost-effectively store goods while SCM coordinates between various departments within the same company or with third-party vendors.

The areas of SCM are:[iv]

  1. Procurement of materials
  2. Partnership details
  3. Progress from raw products to finished goods
  4. Distribution to the end consumer.

So while supply chain managers implement the blueprint for the movement of goods or services, Logistics Management is responsible for planning this process and ensuring maximum efficiency.[v]

Logistics and Supply Chain Management go hand in hand.

For example, if you want to expand your delivery routes to a few more neighborhoods in a city or different countries, you’ll need a robust and adaptable supply chain model. Here, Logistics Management will carve out the flowchart with details relating to the distribution of labour, the timing of deliveries, the quantity of product needed, transportation, the gap between production and consumption etc. so you can be profitable and efficient[vi].

You cannot manage the supply chain without Logistics Management and vice versa.

In Conclusion

Logistics managers ensure that the consumer receives the products on time and the quality is at par amongst other factors, whereas SCM manages the distribution of the products.

Earlier, Logistics Management had a much greater role in the day-to-day production, storage and distribution of goods or services. But now SCM has taken over most of the implementation phases and the logistics department has embraced the role of a strategic planner.

Some professionals excel at planning out the supply chain models, while others are skilled at the nitty-gritty details of Logistics Management.

Whatever your interest may be, you should enrol in an online Masters’ in Logistics and Supply Chain Management after a few years of experience in the industry. It can take your career to the next level and prepare you for a senior role!