Logistics refers to the process whereby a firm plans, executes, and controls the mobility of its assets, which includes goods and people, in order to achieve the set objectives. On the other hand, supply chain management (SCM) refers to the process of controlling the supply-side of the business with the aim of remaining competitive in the market and, to maximize on customer value.
Supply chain management originated from the logistics concept. However, it is different from logistics in numerous ways. Logistics puts more emphasis on individual business. Through external and internal control and planning, it ensures that the firm is efficient in its logistic system. Meanwhile, SCM is concerned with the external relationships among the key players in the whole supply chain such as the suppliers, customers and, intermediaries. It concentrates on refining trading (Rushton, Phil, and Peter 27).
SCM is a single entity rather than a series of fragmented elements such as procurement, manufacturing, distribution among others. Most fast growing companies view logistics from that angle. The real change is that both the suppliers and, the end users make up the planning process, hence going outside the boundaries of a sole organization in an effort to plan for the supply chain as a whole (Rushton, Phil, and Peter 27).
Supply chain management is mostly considered to be part of the strategic planning process of any business entity. It is a factor that is heavily considered when a business is making its strategic decisions. On the other hand, logistics is involved with operational systems. It is mostly involved with the movement of goods and services into and out of the firm (Rushton, Phil, and Peter 27). Therefore, little consideration is given to it while making strategic decisions.
The differences or similarities between these two concepts always appear as one of a semantic nature, rather than based on the substance itself. SCM is a broader concept than logistics because SCM deals with assimilating and, handling strategic business processes through the supply chain. Additionally, it can be seen that the confusion that arises between logistics and, supply chain is probably because logistic is a functional silo within businesses and, is also deals with the management of the flow of information and material through the supply chain.
Works Cited
Rushton, Alan, Phil Croucher, and Peter Baker. The handbook of logistics & distribution management. 4th ed. London: Kogan Page, 2010. Print.
