I know that some people get confused over the terms used in our industry, and often wonder “What is Logistics” or “What is Supply Chain” and how do they differ? Hopefully this short video will help.
“Hi, this is Rob O’Byrne from Supply Chain Secrets. I could ask loads of basic questions about supply chain and logistics, so here’s some simple answers for you.
This time, it’s what is logistics? Well, logistics is the management of the flow of resources between the point of origin and the point of destination. In order to meet some requirements, for example, of customers or corporations, the resources managed in logistics can include tangible items such as food, materials, equipment, liquids and stuff as well as abstract items such as information, particles and energy. The logistics of physical items usually involves integration of information flow, materials handling, production, packaging, inventory, transportation, warehousing and often, security. The complexity of logistics can be modeled and analysed, and visualized and optimised by dedicated simulation software, minimizing the use of resources in time of common goals.
Many people get the term logistics and supply chain mixed up and that’s where I can help you understand. The difference between a supply chain and logistics is the focus. The supply chain is the whole end to end process and all the activities involved, whereas logistics refers to a subset of these activities, specifically those concerning the aspects of material movement. It’s easy to confuse the two notions especially when different organizations have different ways of running their supply chain and their logistics. However, logistics is fundamentally focused on the inbound and outbound and internal movements of materials and products, making sure we get the products to the customer at the right time and in the right place. Quite simply, that’s what logistics is. There’s some more handy links below for more information. Bye for now.”
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If you are struggling with some of the basics of Supply Chain management and Logistics, you might want to take a look at one of our books on the topic. This is an eBook with some extra free bonus downloads: What is Supply Chain Management?