What's the difference between logistics and supply chain management?

 Demystify the distinctions between logistics and supply chain management. Explore the definitions, scopes, and key differences that often lead to confusion.

With companies everywhere expanding their activity to a global scale, the world of business operations has become more complex than ever before. Partly because of this, the terms "logistics" and "supply chain management" are often used interchangeably – which leads to confusion.

While they share common goals and are closely related, there are differences between the two concepts.

In this blog post, we will explore the definitions, scopes, and key distinctions between logistics and supply chain management. We’ll shed light on how they enable modern businesses to run without a hitch, and how an MSc can provide you with an in-depth understanding of both areas. 

Definition and scope of logistics 

In the context of business, logistics refers to the process of planning, implementing, and controlling the movement of goods, services, and information from the point of origin to the point of consumption.

The overall goal is to make this process as efficient, smooth and cost-effective as possible – from start to finish. Of course, this is more complicated than it initially sounds, since there are so many stages to this journey.

In essence, logistics is an umbrella term for the management of various activities such as transportation, warehousing, inventory management, packaging, and distribution. 

The scope of logistics is primarily focused on individual functions within the broader supply chain. Almost all organisations share the same aims: to streamline and optimise specific processes, maximising overall efficiency and minimising costs.

Logistics plays a crucial role in ensuring that goods are delivered to the right place at the right time, meeting customer demands and expectations. 

Definition and scope of supply chain management 

Supply chain management, on the other hand, encompasses a more extensive and holistic approach to the entire process of bringing a product from its conception to the end consumer.

It involves the coordination and integration of various activities – including procurement of primary materials, production, transportation, and distribution – to create value for the end customer. 

In short, supply chain management considers the entire lifecycle of a product or service, from the acquisition of raw materials to the delivery of the final product to consumers. Supply chain managers must engage in strategic decision-making to optimise the overall supply chain and achieve a competitive advantage in the market. 

Key differences between logistics and supply chain management 

The primary distinction between logistics and supply chain management lies in their scope and focus. Logistics is a subset of supply chain management, focusing on specific activities related to the movement and storage of goods.

On the other hand, supply chain management encompasses a more comprehensive view, addressing all aspects of the product journey from production to consumption. 

While logistics deals with the day-to-day operations of transportation, warehousing, and distribution, supply chain management involves strategic planning, collaboration with suppliers, demand forecasting, and risk management.

Logistics is like a puzzle piece that fits into the bigger picture of supply chain management, contributing to the overall success and efficiency of the supply chain. 

Another key difference is the time horizon. Logistics is often associated with short-term, tactical decision-making, ensuring the smooth execution of day-to-day operations.

Supply chain management, however, takes a long-term perspective, considering strategic decisions that can impact the entire supply chain network and its competitiveness in the market. 

How an MSc can help you get an understanding of both fields 

To navigate the complex, intricately connected world of logistics and supply chain management, pursuing an MSc in Supply Chain Management can provide a comprehensive understanding of both disciplines.

While hands-on work experience is invaluable in this sector, it’s easy to be so caught up in day-to-day responsibilities that you don’t get to see the bigger picture.  

This is where a postgraduate qualification comes in. Specialised Supply Chain Management MSc programmes offer a blend of theoretical knowledge and practical skills, equipping graduates with the skills required to navigate the challenges and opportunities presented by this dynamic field. 

Postgraduate courses provide in-depth insights into the strategic aspects of supply chain management, including supply chain design, risk management, and sustainable practices. Students gain a holistic perspective of how various components of the supply chain interact with one another and impact an organisation’s overall performance. 

One of the biggest obstacles faced by professionals looking to move up in this field is the long process of getting the right credentials and certifications.

It’s worth looking out for MSc Supply Chain Management courses that are accredited by internationally recognised organisations, such as the Chartered Institute of Supply Chain Management (CILT).

By picking a CILT-accredited course, you don’t just receive a degree at the end of your studies – you're also fast-tracked into membership eligibility for a skill benchmarking organisation.

This not only reflects the breadth of your knowledge, skill, and leadership skills – it also unlocks a whole host of new job opportunities. 

Are you ready to take the leap and fill the skill gap in this exciting, dynamic sector? Take your knowledge to the next level today by joining our CILT-accredited MSc Supply Chain Management: