What is the difference between logistics and the supply chain before we can talk about integrating logistics
into the supply chain it might be a good idea to quickly define both terms.
If the supply chain is the channel for moving materials and goods and services from your supplier to
your customer and logistics is the process of filling the customer’s order.
Then I think we can see a clear connection between these two endeavors especially if we consider that
today’s supply chains are truly driven by that customer order.
Nowadays in fact many people refer to a supply chain as a demand driven supply network and that actually
is a much better expression.
Goods and services are produced and moved based upon forecast or actual demand from customers and because
the organization has so many suppliers supporting so many products and services sold to so many customers
all around the world.
This is actually more of a very complex network than links in a simple chain.
It is logistics the movement storage and distribution of those products and services that enables the
supply chain success consistently filling the customer’s order effectively and efficiently is what builds
your business reputation.
If a company cannot deliver its products as promised the supply chains simply breaks.
But of course another key to logistics success is to reasonably manage cost while doing so we meet our
customers expectations by integrating six activities of logistics management with our supply chain strategies
Transportation Management ensures that inventory is moved through the supply chain as effectively and
efficiently as possible from supplier to factory to customer.
Transportation is often the most significant logistics expense and is highly variable over time because
of fluctuations in customer demand.
It is transportation that ensures our inventory is in the right place at the right time throughout your
Another important role is warehouse management making sure the right inventory is in the right place
when needed by your factory or your distribution center.
Automated materials handling equipment and sophisticated software systems help warehouse managers to
move and track that inventory through their part of the supply chain.
Distribution Center Management assures you that the customer’s order is properly filled distribution
centers today also use very cutting edge equipment and advanced software technologies to make them more
efficient and very importantly to help them better account for their inventory.
In fact RFID or radio frequency identification first caught the attention of the business world when
warehouse and distribution center managers kept asking Where’s my stuff.
Logistics folks are responsible for managing as they track progress from the time the customer’s order
is placed until it is filled.
This involves the close coordination of everyone’s efforts in transportation warehousing and distribution
packaging is becoming a very important aspect of voter management to protect materials and products
as they move throughout the supply chain.
Nowadays return’s management is becoming increasingly important as the supply chain becomes even more
concerned with environmentally friendly practices and customer return policies continue to be very liberal
logistics is very interested in moving material and goods in the reverse direction without disrupting
the smooth flow of the supply chain.
I hope you noticed how many times I mentioned inventories so far.
Inventory Control is the last of our six activities that must be integrated effectively within our supply
It is the logisticians job to manage him and Tory through the entire supply chain so that the proper
balance is achieved between inventory costs and servicing the customer.
How well are your logistics activities integrated with your supply chain for an answer.
Transportation is generally a pretty good place to start.
For any given product you make.
How well does your transportation system support the goal of ontime order delivery and your promised order cycle time.