What is Supply Chain Management

Posted by Port City Logistics on Aug 29, 2019 11:00:00 AM

two-colleagues-factory_1303-14331In today's world of business, few goods are both manufactured and sold at the same location. 

Rather, raw materials are sourced in one or more locations. These raw materials are then shipped to manufacturers. In many cases, goods aren't manufactured entirely at one location, meaning work-in-process goods are shipped to one or more manufacturers before they're ready for sale. From there, finished goods are usually shipped to warehouses, from which they're distributed to sellers' brick-and-mortar retail outlets or their e-commerce order fulfillment facilities before ultimately being sold.

The management and oversight of the flow of raw materials, work-in-process goods, and finished goods throughout these various phases is referred to as logistics.

Is Logistics The Same As Supply Chain Management?

When it comes to defining terms used in business such as logistics or supply chain management, which is also simply referred to as SCM, there is no simple, single, go-to authority when it comes to differentiating between things like logistics and SCM.

As such, to answer this question, it boils down to this: you're going to get a different answer for virtually every person, business, organization, or another source of information that you consult.

Take, for example, the opinion of the Director of Logistics at one of the nation's largest, most popular producers of drywall - if you didn't already know, drywall is one of the most common building materials used in both residential and commercial structures in modern construction - in the entirety of the United States, American Gypsum. The Dallas-based company's Director of Logistics, Wayne Johnson, said in 2003 that "there isn't a difference" between logistics and SCM when asked for his opinion by Inbound Logistics, one of the most popular magazines in the field in the United States.

In the same article, titled "SCM & Logistics: What's the Difference," the major private corporation National Distribution Centers' Senior Director of Business Development, Mike Kirby, noted that "logistics is a number of sub-processes within SCM," whereas "[SCM} incorporates the field of logistics.

Let's Look At A Few Key Differences And Similarities Between Logistics And SCM

Michigan State University is one of the leading research universities in the United States. Home of the Spartans, one of the best men's collegiate basketball operations in all of the United States, Michigan State University is also home to one of the nation's leading SCM and logistics programs in the United States.

In an article published by Michigan State University earlier this year titled "Is Logistics the Same as Supply Chain Management?" the research university outlined several key differences between the two:

  • The central goal of SCM is to provide the companies that practice SCM with a competitive advantage over their competitors. On the other hand, the primary goal of logistics is to fulfill the many demands, desires, and requirements that customers ask of these companies.
  • Logistics is a term that is generally used more widely by both older business experts because the term has been around so much longer than SCM. People who have experience with the military - not just the United States military, either - are also more likely to use the term "logistics" than SCM.
  • The use of the term "logistics" dates back more than 160 years. Antoine-Henri Jomini, who served the Swiss government in various high-ranking capacities, was a popular writer on military techniques. Jomini first detailed the term in the book Summary of the Art of War, originally titled in his mother tongue of French as Précis de l'Art de la Guerre.
  • Logistics is a part of SCM, though SCM is not a part of logistics. Rather, SCM encompasses several things, one of which is logistics.

No matter what you call it, logistics is what we do at Port City Logistics. We are your single-source logistics provider in Savannah, GA and we are here to serve you! Do you need warehousing, drayage or trucking services for your good? Then contact us today! We handle the big stuff, so you don’t have to!

 

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Topics: Single Source Logistics, Logistics Management