What is the Logistics Chain

Logistics Chain or Supply Chain. Where does one begin and where does the other end?

We often use them synonymously, although in reality they are not, since their tasks, functions and objectives differ. To help us distinguish them, we are also going to propose some definitions, to help establish their respective fields of action.

What is the Logistics Chain

“Logistics is about getting the right product to the right customer, in the right amount, in the right condition, in the right place, at the right time, and at the right cost,” as defined by John J. Coyle, professor of logistics. at Penn State University and author of several books on the subject.

When comparing it with the supply chain, we can say that logistics is one of the elements of the supply chain. “Supply chain is the football coach and logistics is the quarterback. Both provide direction on how assets should be sited and positioned on the ground. But the coach provides the overall game plan and the quarterback executes the moves, adapting as needed on the fly,” explains Jasen Incidis of UltraShipTMS.

The logistics chain, therefore, is within the supply chain.

Functions of the Logistic Chain

The logistics chain focuses on activities related to the movement and custody of merchandise (transport and storage), while the supply chain comprises the entire process: from obtaining raw materials, handling and manufacturing of materials until delivery to the final customer.

For example, in the case of a large commercial area, logistics can finish its task when it puts the merchandise in the hands of the supermarket under the previously agreed conditions. However, when we talk about the supply chain, it can be considered if the packaging in which the merchandise is presented is adequate, if the point or channel of sale is appropriate, if there is a good communication and information system between the various members of the chain (for example, for the purpose of being able to anticipate demand or maintain traceability), etc.

Some of the tasks that are usually associated with the supply chain are: customer service, integration of information systems, product development, packaging and packaging, supply and purchase of raw materials, manufacturing and manufacturing, demand forecasting, etc. . However, due to the close relationship between logistics chain and supply chain, it is easy to find authors and publications that include some of these tasks in the logistics domains, since the boundaries are sometimes blurred.

The supply chain tries to provide value and competitive advantage

It is worth remembering that the concept of logistics is an old concept with a long history, while the idea of supply chain is much more recent and was born with the idea of reflecting the growing complexity faced by companies that try to integrate their processes. from a more global perspective. And that, thus, better responds to the current remains of the world and the market in which they compete.

Another idea that is often alluded to when distinguishing logistics chain and supply chain is that logistics tries to satisfy customer needs -meeting those time and form requirements that we saw in Coyle’s definition-. While the supply chain, through the global and integrating approach that we have mentioned, is the one that tries to achieve a competitive advantage over the competition.

This does not mean that the execution of merchandise movements -transport and storage- does not generate competitive advantages -whether it is getting to arrive faster, arriving without breakages, arriving with fewer errors in order preparation, etc.-. Rather, it is the vision ‘from above’ provided by the supply chain that tries to articulate, design and give coherence to the whole set to fit it within the type of supply chain that is suitable for the company.

Therefore, we can conclude that the logistics chain is one of the parts of the supply chain, in which it is integrated.

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Khaterine William

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