Logistics and Supply Chain Management Objectives

Logistics and Supply Chain Management Definitions

• Logistics: Plans, implements, and controls the efficient flow and storage of goods, services, and related information between the point of origin and the point of consumption to meet customers' requirements.
• Supply Chain Management: The systemic, strategic coordination of traditional business functions and tactics across business functions within a company and across businesses within the supply chain to improve long-term performance.

Logistics vs. Supply Chain Management

• Logistics is a subset of Supply Chain Management that focuses on the planning, implementation, and control of the efficient movement and storage of goods, services, and information.
• Supply Chain Management encompasses a broader range of activities beyond logistics, including the coordination and management of the entire supply chain network.

Objectives

• Logistics Management: Ensure goods and services are delivered to the right place at the right time in the most cost-effective manner, optimizing logistics activities to reduce costs and improve service levels.
• Supply Chain Management: Create a competitive advantage by coordinating all aspects of the supply chain to enhance the flow of information, products, and services, improving customer satisfaction and overall supply chain performance.

Components

• Logistics Management: Key components include transportation management, warehousing, inventory management, order processing, material handling, packaging, and logistics information systems.
• Supply Chain Management: Key components include logistics management, supply chain planning, sourcing and procurement, production and manufacturing processes, demand planning and forecasting, supplier relationship management, and customer relationship management.

Strategic vs. Operational

• Logistics Management: Primarily operational, focusing on day-to-day activities required to move goods and manage inventories.
• Supply Chain Management: Both strategic and operational, involving long-term planning and implementation of strategies to improve overall supply chain performance and managing daily operations.

Benefits of Inexpensive Transportation and Inventory Management

• Inexpensive Transportation:
  • Allows specialization in space
  • De-couples supply and demand regions
  • Increases availability and competition
• Inexpensive Inventory Management:
  • Allows specialization in time
  • De-couples supply and demand in time
  • Increases availability and competition

Key Activities/Processes

• Primary:
  • Setting customer service goals
  • Transportation
  • Inventory management
  • Location
• Secondary or Supporting:
  • Warehousing
  • Materials handling
  • Acquisition (purchasing)
  • Protective packaging
  • Product scheduling
  • Order processing