What is supply chain logistics?

Dec 27, 2021
Supply Chain
Innovation

Did you know that there are many similarities between supply chain management (SCM) and logistics?  While core differences split the two processes, it is vital to comprehend how a mix of the two known as ‘supply chain logistics’ can assist companies in making operational improvements, improving customer service, and developing a competitive edge.


To explain this further, let us dive into their definitions and how they can complement each other.

What is supply chain logistics?

Supply chain logistics is considered the spine of worldwide trade. It includes transportation, warehousing, stock, and services to all customers. Supply chain logistics is essentially the coordination of an end–to–end journey of a product – from conception to the customer’s door.


Supply chain logistics challenges usually focus on customer service, cost control, planning and risk management, supplier/partner relationship management, and talent acquisition. Supply chain logistics must operate smoothly enough to benefit customers and suppliers. When customer demands become taxing on the entire supply chain, it becomes a challenge, such as customers wanting to know where their orders are, how they are being fulfilled, and what the stock inventory situation is. 


Attaining and then communicating insights for customer orders is of greater desire to them. However, this is not always the case if the company does not have the data to provide it themselves.

Is this not the same as supply chain management?

Supply chain management is about applying logistics and supply chain-related processes to a competitive edge. 


While these two terms have some similarities, they are different because supply chain management links together multiple processes to achieve a competitive advantage. In contrast, supply chain logistics is more about coordinating logistics (storage, the flow of goods, services, and information).


Supply chain management can be understood as a collection of strategic decisions, which arranges “the operational framework within which logistics is performed.”


What is logistics?

Logistics is about efficient transport and storage, which is essential to good supply chain performance. A supply chain may have many kinds of logistics within it–committed to supporting the supply chain in operating smoothly because it is fundamental to adequate supply chain execution. However, each logistics operation is only responsible for a unique and self-contained part of the supply chain.


Logistics is regarded as “part of the end-to-end supply chain process” concerning “plans, and the flow and storage of goods,” focusing on the efficient and cost-effective delivery of goods to the customer.


It also concerns the collection of the necessary documentation for reporting and processing, as logistics focuses on the movement and transport of goods within a company. 


‍There are two categories in the logistics industry, inbound and outbound. Inbound logistics concerns obtaining, handling, storing and transporting materials. Outbound involves the collection, maintenance, and distribution of products to customers.


Adequate logistics is about efficient transport and storage and is essential to good supply chain performance. However, each logistics operation is only responsible for a unique and self-contained part within the supply chain. These supply chain ‘subsections’ are managed by different providers such as 2PLs, 3PLs, and 4PLs.


Logistics providers are responsible for fleet management, shipment tracking, and information sharing with partner organizations throughout the supply chain. Using a mix of land, air, and ocean transportation methods to haul goods swiftly, usually in containers for modal transport exchanges. These goods are then stored until required by distributors, retailers, or delivered to end customers (last-mile delivery).


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What is a supply chain?

A supply chain is an entire cycle of producing and selling goods, from material supply to manufacturing, right up to the last steps of distribution, customer purchase, and after-sales. There are challenges for supply chains too, and they often center around the areas of unforeseen barriers to supply, demand, productivity, and profitability


The importance of a supply chain in global trade cycles is crucial. When run efficiently, an optimized supply chain is essential to fulfilling customer orders for a business. If managed perfectly, it also results in lower costs and a quicker production cycle. 


In the current climate, you could say a supply chain has become complex, lengthy, and forced to evolve continually. Therefore, agility in all areas of the supply chain is crucial, or it becomes less effective and productive. Consumers now have more choices than ever before, so delivering expectations or even succeeding in them has never been more important, creating stress points along the supply chain process.

What are the main differences between a supply chain and logistics?

Each one is unable to be without the other. There are differences between the functions, capabilities, inputs, and outputs of both. At a high level, supply chains are responsible for sourcing, processing, and delivering goods to the end customer. In contrast, logistics focuses more on moving and storing goods between different organizations within a supply chain.

What is a supply chain visibility platform?

Companies can benefit significantly from an integrated, collaborative supply chain boosted by end-to-end operational visibility that enhances the ability to serve customers.


A supply chain visibility platform gives enterprises instant access to predictive and real-time information for all deliveries. Advancements in technology, such as Shippeo's machine-learning, proprietary ETA algorithm, allow organizations to quickly and accurately anticipate problems, helping to manage exceptions to mitigate their impact efficiently.


By using a real-time visibility platform, companies can obtain clear insights into transportation operations, helping to make better, data-driven decisions. 

Conclusion 

Trustworthy, cost-effective logistics lead the way to more outstanding supply chain management—a more integrated, collaborative supply chain results in completing orders and delivering to customers on time.


Therefore, it is vital to ensure that the proper insight is supplied for accurate inventory management and tracking that helps supply chain logistics executives and vice-presidents sustain sufficient visibility across their supply chains. Organizations can then avoid shipment delays, supply chain disruptions, and revenue losses with supply chain visibility that navigates these issues, thus reducing risk, closing gaps, and providing better collaborative data processes.

What is supply chain logistics?
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