Logistics is the process to make the customer available of the product at the right time ,right place in a cost effective manner. In other words Logistics is the management of flow of goods , Information and other resources like energy and People between the point of origin to the point of destination or Consumption. It mainly Involves Transportation. So the Transportation and Inventory management becomes a keyword by Logistics. So it can be said as integrated process of information , Transportation, Inventory ,warehousing , material Management and Packaging.
So this is about logistics and if we discuss about Supply Chain then , It is the term used to describe the management of flow of Materials,Fund and Information across the entire supply chain , From Suppliers to Component producers to final assemblers and then to Distribution and ultimately to the consumer . SCM typically involves coordination of information and materials among multiple firms. Supply chain management has generated much interest in recent years for a number of reasons.
Many managers now realize that actions taken by one member of the chain can influence the
profitability of all others in the chain.Firms are increasingly thinking in terms of competing as part of a supply chain against other supply chains, rather than as a single firm against other individual firms. Also, as firms successfully streamline their own operations, the next opportunity for improvement is through better coordination with their suppliers and customers. The poor coordination may result to the losses.
So, Logistics management can be said as a part of SCM which plans implements and controls the efficient effective forward and reverse flow and storage of goods ,Services or related information from the point of origin to the point of destination or consumption in order to meet customers requirement.
So in this we have Third Party Logistics , where one company out sources its logistics and SCM work to the third party to handle. Again in these we have Warehouse, Inventory and so on. For the most effective way to reach the customer is though logistics and SCM activities where you will save a lot for your organization.
The effective way of SCM has been done by DELL and Wal-Mart . They have applied the core part of it to make the process most cost effective and to reach the customer with out any disturbances and problems. The way they have done it is become a example for other players to go for it.
So by Logistics and SCM the company can reach the end point in a most cost effective and efficient manner.
About Author / Additional Info:
An MBA from GITAM University,India.