LOGISTICS and SUPPLY CHAIN MANAGEMENT: SEE 1, BUT IT'S 2! WHAT'S THE DIFFERENCE?
In the import-export and logistics industry, the two terms Logistics and Supply Chain Management (SCM) are often mentioned. However, many businesses and individuals still confuse these two concepts, thinking that they are the same.
In fact, Logistics and SCM are closely related but have completely different scopes, objectives and roles. Understanding the difference is the key for businesses to optimize operations, save costs and build sustainable competitive advantages.
WHAT IS LOGISTICS? – The “flow” of goods
Logistics is a part of the supply chain that focuses on executing and optimizing the SPECIFIC flow of goods from origin to destination.
Main objectives of Logistics: Ensure “7 Rights” – Right product, Right quantity, Right condition, Right place, Right time, Right customer, and Right price.
The main activities of Logistics include:
- Transport (sea, road, air).
- Warehouse management (storage and preservation of goods).
- Inventory management.
- Order processing.
- Customs procedures.
In other words, Logistics answers the question: “How can goods be transported and stored most efficiently?”
WHAT IS SUPPLY CHAIN MANAGEMENT (SCM)? – The big picture
Unlike Logistics, SCM has a wider scope, managing the entire process from:
Sourcing raw materials → Manufacturing finished products → Distribution → Delivering final products to consumers.
Main objectives of SCM: Connect and manage all links in the chain (suppliers, manufacturers, distributors, logistics companies, customers) to ensure smooth flow, optimize costs and increase overall value.
SCM includes Logistics and many other activities:
- Strategic planning.
- Sourcing and supply management.
- Supplier management.
- Manufacture.
- Customer relationship management.
Simply put: SCM is the big picture, of which Logistics is just an important part.
WHY DODO BUSINESSES NEED TO DISTINGUISH BETWEEN LOGISTICS & SCM?
- Build the right strategy: Don't just focus on transportation, but optimize the entire value chain.
- Efficient resource allocation: Invest in the right areas to improve overall performance.
- Increasing competitiveness: A strong, synchronized supply chain is the foundation for sustainable business development in the integration era.
Conclude
In the context of digital transformation and green logistics becoming a global trend, clearly distinguishing Logistics and SCM is not only theoretical but also helps businesses improve their adaptability, optimize costs and build flexible and sustainable supply chains.
With more than 20 years of accompanying Vietnamese enterprises, Vietsun Logistics has always been a pioneer in domestic container transportation, constantly applying new technology and green logistics solutions, contributing to improving the position of Vietnamese goods on the global trade map.
Vietsun – Carrying trust, reaching out for value
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