Differentiate between Logistics and Supply Chain

In fact, logistics is a small portion of supply chain management which consists of all activities including innovation & product development, purchasing & sourcing, manufacturing & operations, logistics & distribution, customer service and global deployment. Logistics only combines the flow of goods, services, information and capital right from raw material to its final consumer.

In detail, the objective of logistics management is just-in-time delivery for the benefit of customer satisfaction. On the other hand, supply chain management focuses on competitive advantage so that people seem to find out the most efficient and effective methods for the supply chain.

Actually, logistics seems to be an old term while supply chain management is a relatively new term compared to logistics management. Supply chain management is commonly related to the participation of multiple parties like suppliers, intermediaries, distributors and customers whereas logistics usually involves one organization.

Logistics Organization Types includes:

• Third-party logistics (3PL): Offering services such as freight by air, railway, roadway, specialized transport and storage facilities
• Warehouse providers: Only storing goods without providing transportation
• In-house logistics: Large enough wholesalers, retailers might have their own in-house logistics function
• Logistics service provider (LSPs): Businesses providing broader management over the flow of goods between points of origin to end-use destination often handle shipping, inventory, warehousing, packaging and security function for shipments
• Reverse logistics: Specializing in returning products to manufacturers when products are defective
• Courier shipping: Delivering products to end customers