Logistics and Supply Chain explanations
Many shippers especially beginners, are confused between logistics and supply chain. These two industries look quite similar but their essence is different. Before getting involved in the shipping business or in these two industries, you should know what they truly are and what the difference between them is. In this article, we will explain the Logistics and Supply chain showing the difference between them.
The term logistics was first used by the military to refer to the movement of equipment and troops in various areas of military operations. Although this term may be new in the shipping business, its military origins can be traced back to decades ago.
In shipping, the term logistics refers to the process of moving products from the sellers warehouse to the buyers warehouse. This process includes the arrangement of the shipping services and contracting shipping lines.
The process of moving products from the manufacturers warehouse, the point of origin, mine site, farm etc, to the receivers warehouse is discussed and agreed upon before the shipment takes place. The two parties should agree upon the delivery date, insurance, and transportation methods. Once these are settled, the logistics services provider will mover the cargo from the manufacturers door to the receivers door.
There are many Logistics services providers LSP that are experienced enough to not only deliver the goods safe and on top of the schedule but also will give you the best solution for the movement of the cargo. Experienced LSP can move shipments using roads, rails, air, and sea.
Supply Chain is a process that compromises all aspects of a product cycle from finding a supplier to delivering the goods to customers. This process involves a network of suppliers, transporters, warehouses, distribution centers, shipping lines, logistics services providers. All these parties work together to deliver products to customers.
Supply chain management is not easy and it includes a lot of activities such as product development, sourcing, production, logistics, etc. Running your supply chain effectively and efficiently is a key role in the success of any shipping business.
A typical supply chain process includes the following:
- The creation of supply, production or sourcing plan
- The procurement of raw materials
- The start of production according to the order
- Storage of the goods
- Delivery of The Goods
The difference between logistics and supply chain is clear. Logistics is simply a part of supply chain management. I hope the above explanation made it clear for you.