Relation Between Logistics and Supply Chain Management

A supply chain is a distribution network that performs the functions like procurement of raw materials from the suppliers and these raw materials are converted in to the final products at the production sites. Then these finished products are transferred to ware houses from there to the distributors and retailers and finally delivered to the customers. SCM is the process of planning and management of all activities involved in sourcing and procurement, conversion and all logistics management activities. The domain of the supply chain management is characterized in such a way that it needs to be cross functional which focuses on the development of relations between partners in the supply chain process, it needs to include all activities for managing interactions with customers and suppliers.

Logistics for a business includes physical distribution, material handling, packaging, warehousing, freight transportation, sales order processing, inventory planning and production planning. Logistics management is that part of SCM, which in order to meet customer requirement plans, implements and controls forward and reverse flow and storage of goods, services between the point of origin and the point of consumption. Logistics involves getting in the right way, the right product, in the right quantity and right quality, in the right place at the right time, for the right customer at the right cost. Logistics play an important role in the coordination of the activities in the entire supply chain, product development and commercialization of the products. Logistics also contribute to the returns management process.