It’s probably understandable that the terms “logistics” and “supply chain management” are used interchangeably. Much of the work that goes into the latter involves a focus on the various aspects of the former. However, it doesn’t take much closer examination to see that the two concepts are very different from one another.
Logistics is quite an old-fashioned term, while supply chain is a more modern one – and also far more encompassing.
Logistics refers to the handling, storage and movement of people and goods. Although it was initially applied as a military term, today, within the context of industry and manufacturing, it applies to packing, warehousing , freighting, shipping and trucking. Although that is quite a large number of processes and steps to consider, it is really only a fraction of what is referred to by the term, “supply chain management”.
Supply chain management is the all-encompassing oversight of an entire industrial process from the gathering of raw materials to delivery to the end user. This includes a whole world of intermediary steps, of which only a few can be placed under the heading “logistics”. The concept of supply chain management arose from the trend that we have seen in the past couple of decades, to remove the divisions within industrial processes and to approach and manage the entire process in a holistic way.
A vital distinction between logistics and supply chain is the number of stakeholders involved in each process. Logistics usually involves only one organisation, while supply chain encompasses many. For example, logistics would involve the trucking company that you engage to deliver your product from your factory to clients around the country. This would be one of the players in your supply chain, but so would your raw material suppliers, the service provider they use to deliver to you, and the internal departments through which your product moves during the manufacturing and delivery process, among others.
It’s uncertain which came first; some people say that logistics has always been one factor of supply chain management, while others say that supply chain management is an expansion and augmentation of existing logistical structures and processes. Either way, both are essential to your workflow, customer satisfaction and overall competitive advantage.
Much of NHFS’s service offerings would be considered to be part of the traditional logistics sphere. More and more, however, clients are requiring us to step in and manage their entire supply chain. Our land, air and sea freight services can all be engaged to work at various points in the supply chain, and our forwarding services help to create links between the various departments and branches – both national and international – of our clients’ operations.
Contact NHFS to find out how we can assist and boost your logistic and supply chain needs.