What is supply chain logistics?
Supply chain logistics is regarded as the backbone of global trade, comprising a network of transportation, warehousing, and inventory. As the areas of purchasing, materials handling, logistics, transportation, inventory control, and supply chain management continue to evolve, a lot of these functions intersect with each other, blurring some of the distinctions between them.The terms ‘supply chain’ and ‘logistics’ are sometimes used interchangeably but there are in fact some important differences.
‘Supply chain’ is broader, involving sourcing, processing and delivery of goods to customers, whereas ‘logistics’ is focused more specifically on moving and storing goods throughout supply chains, and other types of sub processes within supply chains. Those in charge of supply chain logistics, such as a VP of Supply Chain for example, must understand:
- how to leverage the most advantageous transport mode,
- how to design and set up a warehousing facility,
- how to manage and control inventory and assets, and
- how to create an efficient logistics network that delivers both low costs and high levels of customer satisfaction.
Confusingly, the meaning of terms varies from place to place. The term ‘supply chain management’, as understood and used in the US, is sometimes referred to as ‘logistics management’ in Europe.