SUPPLY CHAIN, LOGISTICS, AND ROUTE TO MARKET. Are they the same?

SUPPLY CHAIN VS LOGISTICS VS ROUTE TO MARKET? ARE THEY THE SAME?

In this newsletter, I unpack Supply Chain, Logistics, and Route Market. Are these disciplines the same or related, or are they separate and distinct? I am fortunate that in my over 20 years of experience, I have worked to varying degrees in all these areas. It’s been my experience over the years that professionals confuse these disciplines – in some cases mixing them up or confusing them altogether. So, what are the differences, similarities, and relationships if any, between these disciplines? Let me unpack them in turn.

SUPPLY CHAIN

Supply Chain focuses on the high-level processes involved in sourcing and buying raw materials and eventually creating finished goods. It uses logistics to deliver goods to the consumer, but it ultimately strives to boost the bottom line and increase a business’s competitive edge.

The supply chain oversees and facilitates the following:

• Overseeing an often-vast network of sub-suppliers (like raw materials providers), suppliers, manufacturers, logistics partners, wholesale distributors, retailers, and end users.
• Manages relationships between various stakeholders in the supply value chain e.g., parts and materials suppliers, manufacturers and retailers, etc

LOGISTICS

Logistics is a portion of the supply chain that deals with the warehousing or delivery of finished goods or services to the customer, whether that’s a manufacturer, distributor, or consumer. The goal of logistics is to get goods and services to the customer on time and at a competitive price.

Logistics involves planning, storage, and movement of goods between different points in the supply chain. Logistics deals with the following:

Coordinates facilities, people, equipment, and other resources to ensure products move when they’re supposed to and there is space (Warehousing) for them at the next stop.

Important to note that Logistics is an integral part of the Supply Chain – but just a piece of it.

Here are key similarities between Supply Chain and Logistics,

• Both focus on goods, services, or information.
• Both support the company’s success and differentiate it from competitors.
• Both look to increase customer satisfaction.
• Both revolve around the same flow of goods and services, from the suppliers to the manufacturer, to the wholesaler, and finally to the retailer or end user.

ROUTE TO MARKET

Finally, what is Route to Market (#RTM) (sometimes referred to as Go to Market)? RTM and Supply Chain are used interchangeably. Are they the same thing? Route-to-market is a strategy that determines how a company gets its products or services to its market. RTM looks at which distribution channels a supplier uses to deliver a product to its target customers. It’s a strategy that companies use when they want to achieve a specific business imperative or accelerate growth in a chosen market.

Key tenets of a Route to Market Strategy

For my given product I must answer some of the following questions,

• Who is the end user (consumer) of my product or service?
• Who are my customers?
• Where should I play and how should I play?
• How do I get my product to my target customers or market? Can I do it myself or should I rely on customers, Distributors, or other third-party agents to do this for me?

The Route to Market Strategy must be built around a supply chain and logistical capability or infrastructure. An RTM Strategy on its own is mute without the requisite Supply Chain and Logistics capability.

So, what’s next? Supply Chain, Logistics, and Route to Market are related, and success in the market depends on understanding their relationship and focus – as well as differences and leveraging all of them to win in the market.

Please follow my weekly #AFRICANRTMLEADERSHIP series for content on #RTM. Please contact me directly for help with any RTM topic in any market.