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When you hear people talk about the supply chain and logistics, it can be difficult to understand what they mean. They are two different concepts, but they are both parts of the same general idea. That general idea being how a company manages its inventory and its supply chain to keep all of its suppliers stocked with the things they need to make their products while keeping their warehouses as efficient as possible. The supply chain is a more overarching concept that includes all of the details that go into getting something from point A to point B. Logistics, on the other hand, is just one small part of the broader supply chain. If you’re trying to figure out how these different concepts relate to your business, read on for an in-depth look at what these terms mean and how they apply to your company.
What is a Supply Chain?
A supply chain is the system that a company uses to source and procure the materials and resources it needs to make its products. This is a big picture view of the different parts of that system, from where it gets its raw materials to how it transports those materials to its factories and then to the delivery of its finished products to the customers who buy them. The terms “supply chain” and “logistics” are sometimes used interchangeably, but the two concepts do have slightly different meanings. Logistics is one part of the supply chain; it includes the processes that companies use to manage the physical flow of materials and finished products within their system. The supply chain is a broader concept that includes logistics as well as things like inventory management and other administrative tasks that feed into the physical movement of items through a company’s system.
What is Logistics?
As mentioned above, logistics is just one small part of the broader concept of the supply chain. It refers to the processes a company uses to manage the physical movement of materials, finished products, and inventory through its system. This includes things like routing, inventory management, and transportation. This is not to be confused with shipping, though. Shipping is the physical act of moving items from one place to another. It’s the last leg of the journey that something takes before it reaches its destination. Logistics is the part of the supply chain that happens after raw materials have been sourced and before they are delivered to customers. It includes everything that happens in the middle of the system, from a warehouse to a shipping yard.
What’s the Difference Between Supply Chain and Logistics?
As mentioned above, supply chain is a broader concept that includes logistics as one of its smaller parts. There are several things that differentiate the two, though. First, there is the different perspectives that come with each term. When someone talks about the supply chain, they are looking at the big picture. The supply chain is how a company procures materials and makes those materials arrive at the right place at the right time to make its products. The other perspective is logistics. Logistics is just one small part of the supply chain. It is the part that deals with the physical flow of products and materials through the system. In addition to these slightly different perspectives, there’s also a difference in scale. The supply chain is much broader than logistics because it includes several other processes such as inventory management and supplier relationships.
How Do Supply Chains and Logistic Processes Work Together?
The supply chain and logistics are intertwined in many different ways. They both depend on one another to run as smoothly as possible. Logistics relies on the supply chain to have the materials and resources it needs to move through the system. The supply chain also relies on logistics. Without the processes that happen in logistics, the materials and products that are part of the supply chain would sit idle in a warehouse, waiting to be sorted and transported. Logistics and the supply chain feed into each other and rely on each other to make sure that the products the supply chain produces get from one place to another efficiently. They help companies save money, keep employees and customers happy, and run a more sustainable business.
Conclusion
While these two concepts are different, they are also very closely related. Each one relies on the other to run smoothly and be as efficient as possible. If you’ve been struggling to understand what these two terms mean, now you have a better idea. These two terms are used to describe the process a company uses to get materials, finished products, and inventory from point A to point B.