1. Scope: Logistics primarily focuses on the movement and storage of goods, including transportation, warehousing, and inventory management. It is concerned with the physical flow of products from suppliers to customers. On the other hand, supply chain management (SCM) encompasses a broader range of activities, including procurement, production, distribution, and customer service. SCM involves the coordination and integration of various functions and processes across the entire supply chain to ensure efficient and effective flow of goods, information, and funds.
2. Perspective: Logistics is often seen as a subset of SCM. It is a functional area within SCM that deals with the execution and operational aspects of managing the physical flow of goods. Logistics focuses on the tactical and operational level, ensuring that products are delivered on time and at the right place. SCM, on the other hand, takes a strategic perspective, considering the entire supply chain and its strategic objectives. It involves long-term planning, collaboration with suppliers and customers, and optimizing the overall supply chain performance.
3. Integration: Logistics typically operates within a single organization or company, managing the internal flow of goods. It involves coordination between different departments, such as procurement, production, and distribution, to ensure smooth operations. SCM, on the other hand, emphasizes the integration of multiple organizations and stakeholders across the supply chain. It involves collaboration with suppliers, manufacturers, distributors, retailers, and customers to achieve common goals, such as reducing costs, improving customer service, and enhancing overall supply chain performance. SCM requires effective communication, information sharing, and coordination among various partners to achieve seamless integration and collaboration.