Have you ever found yourself in a situation where you were discussing a certain topic with a colleague and realised that:
- You knew little about the topic
- You didn’t understand some of the terminology being used
- You felt uncomfortable & out of your depth
- Your future depended on you gaining more knowledge of this topic
When it comes to the topic of Logistics, this is how most people feel. It doesn’t matter whether you’re a University Student, CEO or Warehouse Manager. Most people want to gain a better understanding of Logistics Management and the role it plays in business today.
OK, so let’s get you sounding like a real professional when it comes to Logistics. But first we need some basics.
Now, you’ll hear terms like Supply Chain, Logistics and Distribution all used, sometimes in the same context. Most people get the differences wrong don’t worry.
If you want to know what each really means, here we go:
- Distribution. Usually means the outbound (customer side) of operations dealing with the warehousing and delivery of goods to customers. OK, that’s ones easy. At the time of writing, Wikipedia did not have a good definition of Distribution, just those relating to marketing and maths!
- Logistics. This is a bit broader. It’s really about managing the flow of goods right from the point of supply, to the consumer. And it’s generally focussed around the physical movement and handling of the product.
- Supply Chain. Then Supply Chain is even broader. How so? Well this definition from The Council of Supply Chain Management Professionals is a good one. “Supply Chain Management encompasses the planning and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities.
Importantly, it also includes coordination and collaboration with channel partners, which can be suppliers, intermediaries, third-party service providers, and customers…….” It generally includes managing the external organisations too, like suppliers and transport companies.
So if you wanted a hierarchy of these terms, like in an organisational structure, it would go like this:
- The Distribution Manager works for the Logistics Manager, who works for the Supply Chain Manager. Though except for very large companies, you would not expect to see all three of these managers in a company as the jobs can overlap a fair bit.
Logistics Books: www.supplychainsecrets.com