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What is the Difference between SCM and Logistics?

What is the Difference between SCM and Logistics?

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Published by Atiqah Ismail

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Published by: Atiqah Ismail on Oct 10, 2012
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12/02/2013

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Operations Management 2012
1
 SUPPLY CHAIN MANAGEMENT
What is the difference between Supply Chain Management and Logistics?
A supply chain is “the connected series of activities which is concerned with planning,
coordinating and controlling material, parts and finished goods from suppliers to the
customer” (Stevens, 1989).
 Supply chain management includes all value-adding activities from the extraction of materials through the transformation processes and through delivery to the end user. Supplychain management spans and crosses organizational boundaries and treats the organisationswithin the supply chain as a unified virtual business entity (Scott and Westbrook, 1991; Newand Payne, 1995).Figure 1: Supply chain management
Source:
Slack 
et al.
(2004)Supply chain
management, as stated by Russell and Taylor (2009), focuses on “integrating
and managing flow of goods and services and information trough the supply chain in order tomake it re
sponsive to customer needs while lowering total costs”;
 
Supply chain management requires managing the flow of information throughthe supply chain in order to attain the level of synchronisation that will makeit more responsive to customer needs, while lowering costs. The keys toeffective supply chain management are information, communication,cooperation, and trust (Russell and Taylor, 2009).
Essentially, the existence of supply chain management is
to manage the flow of information,products and services across networks of customers, organisations and supply chain partners
(Russell and Taylor, 2009).
 
Operations Management 2012
2
 
Logistics
constitutes the supply chain management. Logistics management is the partof supply chain management that plans, implements, and controls the efficient, effective,forward, and reverse flow and storage of goods, services, and related information betweenthe point of origin and the point of consumption in order to meet customer's requirements.
Source:
 Peltz (2007) Supply Chain Management establishes and
manages
the business-to-business links thatultimately enables the sale of goods (or services) to consumers. Logistics essentially
transfers
 or
moves
the good (or service) from one place to the other. Logistics is a function that fallsunder the wide umbrella of Supply Chain Management, and is only one part of the entireprocess. Supply Chain Management is a much broader, integrating process which entailsmany other aspects aside from Logistics
1
.THE CONCEPT OF SUPPLY CHAIN MANAGEMENT
2
 Companies are increasingly emphasising on their core competencies and working on to buildstrong relationships with their supply chain partners who possess essential complementarycapabilities.
Success
will depend on
how well companies collaborate
to manage importantprocesses and activities across company boundaries to better meet customer requirements anddemand (Fawcett
et al.
, 2007). The efforts to
align
goals,
share
resources, and collaborateacross company boundaries are the essence of supply chain management.
1
2
Fawcett, Ellram and Ogden (2007)

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