Although many use logistics and supply chain management (SCM) interchangeably, they cover different activities. And while they share plenty of similarities, certain differences separate these two practices. Consequently, understanding logistics vs. supply chain management is essential to any business looking to scale its operations.
When well-executed, both logistics and supply chain management can help companies make operational improvements, improve customer service, and get a competitive edge.
Although similar, logistics and supply chain management aren’t the same. Logistics focuses on the storage and movement of products in the supply chain. On the other hand, supply chain management is more comprehensive.
SCM covers all coordination between partners who have a role in the network. That includes sourcing, manufacturing, transporting, storing, and selling. The goal of supply chain management is to find processes that ensure a smooth and efficient flow of goods, ensuring a great customer experience and propelling the business forward.
While SCM manages activities between separate entities, logistics handles the internal movement of products. Moreover, SCM supports all buying, production, and distribution of goods while logistics moves and stores products between different points in the supply chain.
Supply chain management includes processes involved in sourcing and purchasing raw materials and creating products. SCM uses logistics to deliver products to customers and aims to improve the bottom line and boost the company’s competitive advantage. That means SCM develops the strategy and controls logistical activities happening in warehouses, factories, local shipping centers, etc.
Logistics is an element of the supply chain that stores or delivers finished products or services to the customer, whether that’s a consumer, distributor, or manufacturer. The objective of logistics is to deliver goods to customers on time and at a competitive price.
Logistics involves planning and conducting the storage and movement of goods between various points in the supply chain. It coordinates people, equipment, facilities, and other resources to make sure goods move at the right time and place.
Inventory management, demand planning, material handling, transportation, and order fulfillment are the processes falling under logistics.
SCM refers to the activities that create finished products from raw materials and deliver them to customers. It also focuses on enhancing supply chain processes. A company can continuously refine supply chain management when it has visibility across its supply chain.
Visibility allows companies to track products and services as they go through each stage of the supply chain, making it easier to see if things are going according to plan. Moreover, it gives decision-makers more time to respond to disruptions. Supply chain management involves supervising a network of sub-suppliers like manufacturers, logistics partners, etc.
Let’s use a furniture manufacturer as an example of how SCM works. As part of the SCM function, the company sources wood and other raw materials it needs from suppliers. It makes the end product and distributes them to furniture stores. SCM tackles every process involved in the movement of these items.
Both logistics and supply chain management focus on the flow of goods from the point of origin to the endpoint. Both require careful coordination of facilities, labor, and supplies to ensure goods can move through the supply chain as needed. Logistics is a vital component of SCM but just a part of the equation.
Logistics and supply chain management both work to move, store, and deliver items as efficiently as possible. However, SCM gives the strategic direction that governs inbound and outbound logistics. They share the same goal - to support the business’ success and distinguish it from competitors. Also, they both strive to enhance customer satisfaction.
Logistics and supply chain management intersect, but they are different regarding their focus and range. SCM defines the strategy and actions for planning, sourcing, manufacturing, delivering goods, and managing returns.
On the other hand, logistics focuses on the right items being at the right time in the right place and how to get them there. Below are some fundamental differences between logistics and supply chain management:
Logistical elements of the supply chain help manage products or services. Each component assists in moving materials and end products through the various steps in the supply chain. Below are the logistical elements of supply chains:
Logistics and SCM both support customer needs and work to enhance customer experience. Logistics provide direct feedback on customer demand and supply chain management uses this information to understand what customers want and plan inventory and production.
Well-organized logistics allow efficient supply chain management. And that is what Unival Logistics provides. You get end-to-end logistics solutions utilizing the latest technologies combined with tried and true methods.
Your goods will travel optimal routes in order to arrive safely and on time. You can track your packages in real-time and integrate your website's functionalities with our API. For added protection, we provide full-value insurance even for high-end goods.
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.105 per ton-mile. Reducing truck transport and opting for the optimal rail transload facility can help increase expense savings through rail.</p> <h2>Rail Freight and Intermodal Strategy</h2> <p>Intermodal is the use of two or more freight transporting modes. When combining rail and road, trains are utilized for the long-haul chunk of the transport. Trucks are used to ship loads from the origin to the terminal and then from the terminal to the recipient, known as drayage.</p> <p><strong>Using rail freight as part of an intermodal strategy has many benefits</strong>, which you can discover below.</p> <h2>Rail Freight Is Eco-Friendly</h2> <p>Given the current state of our environment, caring for it is imperative. From an ecological point of view, rail freight is a great transport alternative compared to air, sea, and road freight. <strong>The biggest advantage of rail freight is the reduction of CO2 emissions</strong>. Compared to other transport modes, rail freight leaves the smallest carbon footprint.</p> <p>For example, air freight consumes 138 tons of CO2, and the combination of air and sea consumes approximately 76 tons of CO2. However, rail freight consumes only 5 tons of CO2 over the same distance. That’s why, now more than ever, rail freight deserves more attention.</p> <h2>Rail Transportation Is Safe and Efficient</h2> <p>Railway safety has notably improved over the past couple of decades. Now, <strong>rail transportation is one of the safest shipping options</strong>. With steady investments in railway infrastructure, routings, tracks, terminals, and border crossing stations, there’s a significant enhancement in the performance of rail freight.</p> <p>Moreover, GPS tracking in trains prevents theft and losses, protecting the goods in transit. Since carriers can locate their customers’ shipments and follow up on milestones, they can deliver information on container position and detect if something unexpected happens during the transportation.</p> <h2>Rail Freight Is Fast and Reliable</h2> <p><strong>Rail freight is a fast and reliable shipping mode</strong> with shorter lead times when compared to sea freight. Although not always possible, there are many situations when rail freight is a more optimal choice than other transport modes.</p> <p>For instance, one of the biggest challenges for companies with production in China is the long lead times to northern Europe when shipping by sea. Sea shipping from China to that part of Europe typically takes around seven weeks.</p> <p>With rail freight, the shipping times can be cut in half, significantly reducing the lead time. Shorter lead times can make it easier to predict business operations and costs, positively impacting capital binding.</p> <p>In addition, rail freight transport is a <strong>punctual mode of transport</strong>. Compared to sea and road freight which can be subjected to bad weather and congestion, not much can hinder the rail path, reducing the risk of unexpected delays.</p> <h2>Are There any Drawbacks of Rail Transportation?</h2> <p>Intermodal containers experience a lot of movement during transit that can damage their contents. There’s a risk of a denied claim if cargo isn't appropriately blocked and braced by rail standards.</p> <h2>Rail Freight Shipping Can Be Your Optimal Choice</h2> <p>Rail shipping has many benefits and very few drawbacks. Apart from being extremely reliable, rail freight is also cost-effective. On top of that, it leaves the smallest carbon footprint compared to other shipping modes.</p> <p>With rising challenges in sustaining our environment, it’s vital to do everything we can to reduce CO2 emissions and reduce the impact of global warming. For those reasons, using rail freight as a part of intermodal strategy can be an optimal choice for many companies that wish to see improvement in our environment.</p> <p><a href="https://unival-logistics.com/">Unival Logistics</a> provides end-to-end logistic solutions and we always choose optimal routes, so that your packages arrive on time and cause the least amount of pollution. You can also take out <a href="https://unival-logistics.com/package-insurance">full-value insurance for high-value goods</a>, track your packages in real-time, and integrate your business with Unival’s API.</p> <p>If you need a logistics partner that combines traditionally effective methods of transport with modern solutions, contact Unival Logistics.</p>
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