Logistics and supply chain are two terms that are regularly used in the national and international trade and goods transport sectors. This is largely due to the boom in e-commerce. However, they are not synonymous. Both have their own particularities and serve specific but distinct purposes.
What is the Supply Chain?
The supply chain covers all the stages between a customer's order and delivery. It is therefore not only linked to transport, but also to sourcing from suppliers, production and distribution.
The Supply Chain is the general organization that governs everything from the choice of supplier and raw materials to storage and payment tracking. In this respect, the Supply Chain involves many different professions and players:
- Suppliers
- Subcontractors
- Carriers
- Retailers
- Etc.
Supply chain management should therefore be seen as the linking of production and distribution, with the aim of gaining a competitive advantage at each stage to reduce costs.
In simple terms, the Supply Chain is the management of all the stages from the raw materials supplier to delivery and payment to the end customer.
Please note: supply chains are sometimes confused with value chains. These are also two quite distinct concepts. The value chain expresses the fact that the further a product advances in the supply chain, the greater its value.
What are Supply Chain tools?
Due to the complexity of its organization, the supply chain was one of the first sectors to digitize in order to improve productivity and speed. The optimization of its processes can only be clearly determined by the use of Supply Chain Management (SCM) tools. These tools enable us to manage the various players involved, as well as raw material requirements, inventories and transport, and thus keep costs under control.
What is logistics?
Logistics involves managing inventory and flows through to transport to the end customer.
Its aim is to maximize customer satisfaction by optimizing processes, to deliver better and faster. It therefore involves fewer players than the Supply Chain as a whole.
In other words, logistics is not concerned with the previous stages of raw materials, suppliers and production. On the other hand, in addition to storage and delivery, other segments fall within its remit, starting with returns.
This is what really distinguishes logistics from the supply chain : logistics is a part of the supply chain. For this reason, by mistake or shorthand, one is sometimes used in place of the other. Fundamentally, of course, it's the same field, but logistics is only a small part of it, however complex.
What are the supply chain and logistics tools?
Supply chain and logistics, however, are based on a common evolution through automation and continuous improvement tools, such as :
- The TMS (Transport Management System) is a transport management tool. It can be dedicated to shippers or carriers. MyTower, for example, is a TMS and GTM (Global Trade Management) that digitalizes all transport processes, covering both upstream and downstream supply chains.
- The WMS, or Warehouse Management System, is directly linked to logistics, since it enables efficient management of operations (stock awareness, traceability, entry and exit, etc.) in warehouses.
- The OMS for Order Management System is a more recent tool which orchestrates orders, offering companies an omnichannel system, whether online or in-store. In other words, it allocates orders in real time to find the required product wherever it may be. The aim is to improve the supply chain and increase in-store supply, thanks to a global view of stock.
Supply Chain and Logistics are consequently different segments of the business. But they are fully interrelated, and rely on evolving tools to improve their performance.
