Supply Chain Management vs Logistics: Differences, Similarities and Roles

 

Supply Chain Management vs Logistics: Differences, Similarities and Roles


If you're running an online business, you need to understand the key differences between supply chain management (SCM) and logistics. Both are crucial aspects of the modern supply chain, but they play different roles and require different approaches. In this blog post, we'll understand the differences, similarities, and what roles SCM and logistics play in eCommerce, and how you can use both of these to optimize your business operations.


What is Supply Chain Management (SCM)?

SCM is all about managing the entire lifecycle of a product, from sourcing raw materials to delivering the finished product to the end customer. It involves a range of activities, including product design, procurement, production, inventory management, logistics, and distribution.


The main goal of SCM is to optimize the entire supply chain and ensure that all the different parts work together efficiently. This involves minimizing waste, reducing costs, improving quality, and increasing overall customer satisfaction.


What is Logistics?

Contrary to supply chain management, logistics involves managing the movement and storage of goods, from the point of origin to the point of consumption. Its key components include transportation, inventory storage and warehousing, and order fulfilment.


The goal of logistics is to ensure that products are delivered to customers on time, in the right quantity and quality, and at the lowest possible cost. It plays a critical role in customer satisfaction and can be a major differentiator for eCommerce businesses.


Key Differences between SCM and Logistics


SCM is a broader concept that includes logistics as one of its components. On the other hand, logistics is more focused on the physical movement and storage of goods.


SCM involves a range of activities, including product design, procurement, production, inventory management, logistics, and distribution. Logistics is widely focused on transportation, warehousing, and order fulfilment.


SCM takes a holistic view of the entire supply chain, whereas logistics focuses on specific functions within the supply chain.


Similarities between SCM and Logistics


Despite the differences, SCM and logistics have some similarities as well:


  • Both are significant components of the modern supply chain.

  • They involve a number of activities that need to be coordinated to ensure efficient operations.

  • Both play a critical role in customer satisfaction and can act as major differentiators for eCommerce businesses like yours.


What are the roles of SCM and Logistics in eCommerce?


Proper supply chain management is responsible for the efficient management of the end-to-end supply chain, from sourcing raw materials to delivering the finished product to the end customer. This involves coordinating all the different parts of the supply chain and optimising operations to ensure efficiency and cost-effectiveness.


Logistics is responsible for the physical movement and storage of goods, from the origin’s point to the point of consumption. It majorly involves transportation, warehousing, inventory management, and order fulfilment.


Optimizing SCM and Logistics for eCommerce


To optimize SCM and logistics for your eCommerce business, you should take a holistic approach that considers the entire supply chain. Here are some tips:


  • You should use data analytics to identify areas of inefficiency and opportunities for improvement.

  • Do use technology to automate processes and reduce the risk of errors.

  • Build strong relationships with suppliers, logistics providers, and other stakeholders in the supply chain.

Also Read:  Six Logistics Startups That are Tackling Global Supply Chain Challenges



Final Thoughts

SCM and logistics are both critical components of the modern supply chain. You just need to continuously monitor and evaluate your supply chain to identify opportunities for improvement. By partnering with a proven logistic company like NimbusPost which offers multiple types of warehouses and well-equipped fulfillment centers around the world, you can ensure efficient operations, cost-effectiveness, and customer satisfaction.


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