Logistics and Supply Chain Management Essay Example

Logistics and Supply Chain Management

Logistics and Supply Chain Management

Introduction

Logistics management and the supply chain management are two terms used in business logistics. Logistics management involves the planning, implementation, and control of the efficient movement of goods, services, and related information to the customer (Green, Whitten, & Inman 2008). Supply chain management involves the combination and interaction of all corporations involved from the production level to the consumption level to ensure that consumers get the value they desire (Halldorsson, Kotzab, Mikkola, &Skjoett-Larsen 2007). This is a broader approach that has come up due to the competitive force because of the increasing fast inventions in the business world. This paper will compare the two business logistics terms and explain their importance in a manufacturing or service organization.

The Meanings of Logistics Management and Supply Chain Management

Logistics management and supply chain management do not have the same meaning in business logistics. Whereas these terms are related, they do not apply in the same way. Logistics Management is involved with a portion of the supply chain that deals with the planning and the execution of the actual storage and flow of goods, services and related data from the consumer so as to meet the desires of the end user (Larson &Halldorsson 2004). Supply chain management, on the other hand, refers to the process of an organization seeking relevant skills and resources from their consumers and suppliers so as to add value to their products in a bid to stay ahead of their competitors (Lummus, Krumwiede, &Vokurka, 2004). The logistics managers are involved in numerous activities within the organization.

One important responsibility that lies on the logistic management is the movement of raw materials, finished products among other things through the company’s transport agencies (Russell 2007). Another task involves the warehousing where logistics managers determine the inventory level and the warehouses required. Further, the packaging is also established in business logistics so that the finished products get the right package before they are released to the marketplace (Mentzer, DeWitt, Keebler, Min, Nix, Smith, &Zacharia 2001). Others functions of logistic managers include handling of materials in the organization, production planning, demand prediction where they project inventory supplies, fulfillment of customers’ requirements, ensuring that the products are available to the consumers as well as parts and service maintenance for any repairs needed(Larson, Poist&Halldórsson 2007). Reverse logistics is another function related to business logistics which involves efficient disposal of scrap, containers as well as handling returned goods among others.

Supply chain involves incorporating all companies participating in the designing, production and distribution of the final product to the consumer (Russell 2007). When the managers of these organizations work hand in hand, the results are better goods and services that meet the customer requirements and through this, the business can beat its competitors in the marketplace (Lummus, Krumwiede, &Vokurka, 2004). This competitive advantage is attained because all the firms focus on the needs of the consumer and seek a common approach towards accomplishing that. The supply chain changes the nature of approach from being company- centered to becoming the chain- centered. The supply chain also focuses on value addition to the user of the finished product and. Therefore, the abilities and resources of other firms are very significant in creating value to the consumer (Larson, Poist&Halldórsson 2007).Supply chain management there becomes the broad concept of that involves other companies and relevant agencies that add value to the customer.

Strategic Importance in Business Organizations

Logistics and supply management are of importance to a manufacturing or service organization. Logistics has been acknowledged as a critical strategy for increasing competitiveness in an organization (Larson &Halldorsson 2004). This means that the company that employs logistics may, as a result, distinguish itself to its customers by operating at minimized costs and maximized profits. Logistics assists in enabling an organization to get its products or services to their consumers at the desired time and also in the required state.In addition, it aids in commercial transactions hence facilitating the development of trade in an economy since logistics ensures that all essential materials are available before each stage in the chain (Halldorsson, Kotzab, Mikkola, &Skjoett-Larsen 2007). Consequently, a distinct chain of flow of materials from supplier to the manufacturer and then to the consumer is developed. The activities are also coordinated successively so as to meet the customer’s needs. In recent times, logistics has developed its scope so as to fit in today’s organizations which are motivated by process rather than functions and therefore becoming very significant part in the process (Mentzer et al 2001).

In addition, the Supply Chain Management (SCM) also offers great support to manufacturing and service organizations. This is because international markets are growing very fast and for international organizations to reduce the cost of production, they are required to have manufacturing centers that can provide raw materials and labor at reduced costs (Russell 2007). Finding these raw materials and their suppliers requires vibrant procurement strategy covering many countries. An organization needs to roll out an effective supply chain for optimal market coverage as well as access to products at strategic regions (Larson &Halldorsson 2004). In addition, the internet expertise has also expanded physical boundaries for organizations since an individual can buy a product from any corner of the world online (Mentzer et al 2001). Companies that are properly equipped with the logistics and supply network have an added advantage. The numerous chains which involve transporters, suppliers, distribution centers and retailers among others provide efficient data and records and this information become very critical for the company in the assessment of the business to ensure continuous processes of the organizations (Halldorsson et al 2007).

Conclusion

In conclusion, the essay has discussed the logistics and supply chain management business terminologies as well as their significance in a manufacturing or service organization. The logistics management differs with the supply chain management in that the former is a component of the latter. In other words, logistics management focuses on the organization and its distribution channels whereas in the supply chain the company emphasizes on networking with other firms and relevant agencies so as to achieve optimum competitiveness. Both logistics and supply chain management play a critical role in the business organization since thy help a company work towards achieving competitive advantage against its competitors. These business strategies are therefore very essential for any business that wants to boost its trade and beat its opponents.

Bibliography

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