Logistics and supply chain management Essay Example

Title: Logistics and supply chain management

Introduction

The word logistics has an origin in Greece where it was used by ancient Greek Lagos to mean “Ratio, word, calculation, reason, speech, and oration.«

Logistics is a term that is used to refer to the art of managing the flow and supply of resources such as goods and information from the point of its origin to the consumption destination with the aim of satisfying customer demands. Therefore, logistics is an integration of information, transportation, warehousing material handling such as packaging as well as inventory management (Hugos 2003).

On the other hand, supply chain management can be defined as the process of planning, implementing as well as effectively controlling the operations of the supply chain in the most efficient manner possible. Similar to logistics, the scope of supply chain management covers all the movement as well as storage and handling of materials as well as inventory management from the origin of the materials to the destination of consumption.

Description

Logistics

As defined earlier, logistics refers to the branch of science that deals with procurement, maintain ace as well as the movement of materials, people as well as facilities from origin to the point of consumption or service delivery (Frazelle 2002). The concepts of logistics are often used in almost all the organizations that deals with manufacturing and whose functions includes goods or service transportation. As such, the logistician employed would mostly be any of the following.

The various organizations or departments that utilize the concept of logistics, as well as the importance of the application of logistics, include military organizations, medical organizations, as well as business organizations such as companies.

  • Military Logistics – The people in charge of logistics utilize the concepts of logistics to manage the manner and method of movement of resources such as food or armory to the places needed.

  • Medical logistics – the concept of logistics is utilized in determining the method and manner of supply of pharmaceuticals, ambulances, medical and surgical supplies, doctors among others from the source to the point where the need is crucial.

  • Business logistics – inventory management, purchasing, transportation as well as warehousing planning in business organizations all depend on effective utilization of the concept of logistics.

Supply chain management

As defined earlier, supply chain management, popularly abbreviated as SCM is concerned with efficient planning, implementation as well as control of supply chain operations (Semchi 2005). Effective supply chain management should put into consideration the following components.

  • Distribution network configuration – Number as well as the exact location of suppliers, production facilities, distribution centers as well as warehouses.

  • Distribution strategy – Choice between the centralized distribution system and decentralized systems.

  • Information – integration systems that help tap informatics regarding demand levels, inventory, forecast as well as transportation.

  • Inventory management – monitor available raw materials, products under processing as well as some finished products.

  • Cash flow – Facilitating payment arrangements for entities within the supply chain.

Logistics versus supply chain management

There is a noticeable change in the manner in which business in carried out for the past few decades. The rise in the use of technology in all various parts of business has been adopted. However, supply chain management has seen a more drastic change in advancement as compared to logistics management (Frazelle 2002). The chart below summarizes the differences between logistics and supply chain management.

ATTRIBUTE

LOGISTICS MANAGEMENT

SUPPLY CHAIN MANAGEMENT

Integration of movement and servicing of goods from and into an organization

Management and coordination of supply chain activities.

Objective

Satisfying the customer

Compete effectively

Evolution

The concept has gradually evolved from the past.

It is a new concept that was recently introduced into the market.

Number of organizations evolved

Multiple

Relationship with the other

Logistic management is an integral part of supply chain management.

Supply chain management is the new version of logistics management

Table 1: Supply chain management and logistics management comparison chart

Differences between logistics and supply chain management

There are notable differences between supply chain management and logistics management and among them are as listed below (Hugos 2003).

  1. From the definition of supply chain management and logistics management, logistics is described as flow as well as storage of goods within and outside the firm. Supply chain management, on the other hand, is described as the integration of supply chain activities.

  2. The main objective of the logistics management is purely concentrated on the customer satisfaction while that of the supply chain management is gaining a competitive advantage.

  3. Logistics involves the existence of a singular organization while supply chain management involves of the existence of multiple organizations.

  4. The concept of logistics has been in use for a long period, gradually evolving regarding technology while supply chain management is a concept that is new in the market.

  5. Logistics in only a fraction of supply chain management while supply chain is a whole new concept that replaces the concept of logistics.

Conclusion

Logistics is an ancient term formerly associated with the military applications in term of maintained, storage as well as transportation of army personnel as well as good. However, in the recent past, logistic have evolved technology wise, and its use has expanded into various other fields apart from the original military application. Supply chain management encompasses all the activities of logistics as well as providing many other extra capabilities and services. The two terms i.e. supply chain management and logistics management cannot be separated since they do not result in any contradiction. The two terms, however, complement each other regarding their functions.

References

  1. WORKSHOP ON LOGISTICS AND SUPPLY CHAIN MANAGEMENT, SEBASTIAN, H.-J., KAMINSKY, P., & MÜLLER, T. (2015). Quantitative approaches in logistics and supply chain management: Proceedings of the 8th Workshop on Logistics and Supply Chain Management, Berkeley, California, October 3rd and 4th, 2013. http://search.ebscohost.com/login.aspx?

  2. MCB UNIVERSITY PRESS. (1996). Supply chain management. Bradford, England, MCB University Press. http://www.emeraldinsight.com/1359-8546.htm.

  3. ZUCKERMAN, A. (2002). Supply chain management. Oxford, U.K., Capstone Pub. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=67145.

  4. SUPPLY CHAIN VISIONS, & COUNCIL OF SUPPLY CHAIN MANAGEMENT PROFESSIONALS. (2009). Supply chain management process standards. Lombard, Illinois, Council of Supply Chain Management Professionals. http://proquest.safaribooksonline.com/?fpi=9780134135717.

  5. FRAZELLE, E. (2002). Supply chain strategy: the logistics of supply chain management. New York, McGraw-Hill. http://accessengineeringlibrary.com/browse/supply-chain-strategy-the-logistics-of-supply-chain-management.

  1. NATIONAL ASSOCIATION OF PURCHASING MANAGEMENT, DOW JONES REUTERS BUSINESS INTERACTIVE LLC., EBSCO PUBLISHING (FIRM), H.W. WILSON COMPANY, & SYNERGY (ONLINE SERVICE). (1999). The journal of supply chain management. Tempe, Ariz, National Association of Purchasing Management. http://qe2a-proxy.mun.ca/Login?url=http://global.factiva.com/en/sess/login.asp?xsid=S001WVj1tVk0XZyMTZyMTEoOD2nMDAvMHmm5DFHY96oYqZlNFFBQUFBQUFBQUFBQUFBQU

  2. HUGOS, M. H. (2003). Essentials of supply chain management. Hoboken, N.J., John Wiley & Sons. http://www.123library.org/book_details/?id=47975.