According to years of research, some experts have suggested to the notion that logistics fall under the supply chain management ‘umbrella'. Needless to say, to them, logistics may not exist if indeed supply chain management is not present. Now before we can understand, the relationship between logistics and supply chain management let us look at each term separately.
Logistics typically refers to activities that occur within the limitations of a single organisation and Supply Chain refers to networks of companies that work together and coordinate their actions to deliver a product to market. On the other hand, traditional logistics focuses its attention on activities such as procurement, distribution, maintenance, and inventory management were as Supply Chain Management (SCM) acknowledges all of the traditional logistics and includes activities such as marketing, new product development, finance, and customer service.
Many may argue the logic of the interrelation between Logistics and chain management; stating that logistics and supply chain is not the same thing, which is true. Based on the understanding that the objective of Logistics is customer service and the supply chain management’s goal is a competitive advantage.
However, logistics is part of the supply chain management process, and that means whoever manages your supply chain will be responsible for managing freight forwarding, shipping companies, parcel delivery companies, customer brokers as well as third party providers. This just means providers should be administered in the same manner that you manage your suppliers. As you would negotiate cost and contracts in logistics, you can source freight forwarders the same way you would source suppliers of the products you need. The bottom line is that the term supply chain and logistics management are completely inseparable. While they are different enough to be recognised as individual terms or processes, the two are so tightly interwoven that is better that they not be considered separately. Logistics and Supply Chain functions can and do frequently overlap. Most can accept the basis that the term logistics has a narrower focus on activities involving product distribution and the strategic coordinated of flows between marketing and production. In the case of the international transportation industry, this can translate into the relationship between transportation and distribution. Essentially, supply chain management and logistics go hand in hand, small details mark the bold differences. The supply chain management team, being that they are not only responsible for achieving customer satisfaction ultimately but also contributing to the maximization of profit, controls the overall spectrum. Logistics is like the small puzzle piece fitting precisely into the supply chain management process, being that it takes into account the analysis of each step before the time of arrival of the expected product. Logistics and Supply Chain Management may not intertwine, in definition. None the less, mutual contribution by both leads to more than just shipping. Even with these differences, it is clear that logistics areas often cut across supply chain functions and vice versa.