What is Logistics and Supply Chain Management
What is Logistics and Supply Chain Management
What is the difference between the management of logistics and supply chain? Lot of people use the two terms interchangeably. But what is the right way to use them? This article will show you the historical background and the development of the logistics and supply chain management (SCM).
Logistics Management Concept
Logistics has its roots in military activities associated with the movement of troops to the battle. The request later passed in the field of business. One of the more confusing things is the difference between the supply and logistics chain management.Lummus et al., 2001, made a clear distinction between the two terms mentioned in the article named "The relationship of logistics to supply chain management: developing a common industry definition" that,
The logistics involves planning, implementing and controlling efficient, effective flow and storage of goods and services from the beginning point of external origin to the company and from the company to the point of consumption for the purpose of conforming to customer requirements. Logistics is generally viewed as within one company, although it manages flow between company and its suppliers and customers. Supply chain management includes logistics flows, the customer order management and production processes and information flows necessary to monitor all activities at the supply chain nodes.Traditional views on many organizations are modeled after the military organizations in which many players are under the command of a leader. Then many related activities performed by different people from different functions. Doing this way, the coordination between each function is not effective because each function considering only their own goal.
Modern logistics is now taking into account the integrated process under the same unit to formulate more productive workflow.
According to APICS Dictionary, Supply Chain is
"The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash". Simple structure of supply chain network can be depicted as below,
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