Comparison between Logistics and Supply Chain Management

Logistics management is a small portion of Supply Chain Management which combines the flow of goods, services, information and capital right from raw material to its final consumer. While Supply Chain Management is a broader term which is associated with the sourcing of raw material, procurement of consumer requirements, conversion into final products and delivering on time at consumer end (Logistics Management). Due to External Constraints, Innovations and New Technology and Internal Advancements; Supply Chain Management has evolved as an improvement over Logistics. This article will help you understand the difference between Logistics Management and Supply Chain Management.

• The basic difference between Logistics and Supply Chain Management is that Logistics management is the process of integration and maintenance (flow and storage) of goods in an organization whereas Supply Chain Management is the coordination and management (movement) of supply chains of an organization.
• Another difference between Logistics and Supply Chain Management is that the objective of Logistics Management is customer satisfaction while Supply Chain Management emphasizes more on competitive advantage.
• Earlier to deliver any goods or services to its final customers only Logistics Management was applied whereas Supply Chain Management is an evolved and modern concept of the same.
• Another difference between Logistics Management and Supply Chain Management is that Logistics Management involves only one organization whereas multiple organizations (coordination and collaboration of parties like suppliers, intermediaries, distributors and customers) are involved with Supply Chain Management.
• Another most important difference between Logistics Management and Supply Chain Management is that Logistics Management is a small part of Supply Chain Management whereas Supply Chain Management is a new and modern concept.
• The difference between SCM and Logistics is that Supply Chain Management (SCM) involves the planning, implementation and effective storage of goods and services between the point of origin and point of consumption to meet customer requirements. Whereas Logistics Management’s main objective is to deliver the right product at the right time with all other attributes in place.
• Another difference between SCM and Logistics is that Supply Chain Management (SCM) is a series of interconnected activities related to the movement of raw materials to finished goods until it reaches the end-user. Whereas Logistics Management involves activities like warehousing, proper packaging, order fulfilment, stock control and stock management.
• Another difference between SCM and Logistics is that Supply Chain Management is a broader term which refers to the connection with the suppliers to the ultimate consumer. Whereas Logistics Management is associated with only maintenance and storage of goods.
• Logistics is a very old term whereas Supply Chain has evolved as a new concept. Supply Chain Management is an addition over Logistics Management where both complement each other for effective distribution of goods and services.