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supply chain

The difference between Supply chain, Logistics and Operation : a complete guide

The three subjects though are distinct in nature, they all fall under the same umbrella of supply chain management. The entire purpose of SCM is to analyze, optimize and understand the working of the entire business both external and internal.

So what is Supply Chain Management?

Wikipedia defines Supply chain as :

“A supply chain is actually a complex and dynamic supply and demand network. A supply chain is a system of organizations, people, activities, information, and resources involved in moving a product or service from supplier to customer. Supply chain activities involve the transformation of natural resources, raw materials, and components into a finished product that is delivered to the end customer. In sophisticated supply chain systems, used products may re-enter the supply chain at any point where residual value is recyclable. Supply chains link value chains.".

In simpler words, Supply chain management is the bigger picture which includes all the activities in the range from procuring raw material until it reaches the end-user. The various components include material handling, stores, warehouse management, logistics, procurement, vendor management etc.,

The ultimate goal of SCM in business is to provide excellence to consumers by moving the final product to the end-user and meet all the requirements of the user.

Logistics

"The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound, outbound, internal, and external movements". - CSCMP.

An important aspect of SCM is logistics as it enables successful movement of the goods to the various aspects of the supply chain.

Operations

Operations is again a broad term which is seen in different aspects of every business. Operations are the activities which are executed on a daily basis. For example, maintenance, security, IT etc.,

The entire spectrum of SCM, logistics, and operations are controlled by the supply chain management team. The team is responsible for the smooth functioning of all the activities in the departments, and maintain good relations with stakeholders and suppliers involved in the SCM channel.

The mutual understanding between the the departments of logistics, supply chain and operations is what leads to mutual contribution between the different departments and an efficient and effective channel for the end product to reach its consumer.

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