{"id":5400,"date":"2020-06-24T22:22:04","date_gmt":"2020-06-24T20:22:04","guid":{"rendered":"https:\/\/diagma.com\/?p=5400"},"modified":"2020-06-24T22:22:04","modified_gmt":"2020-06-24T20:22:04","slug":"what-is-the-difference-between-supply-chain-operations-and-logistics","status":"publish","type":"post","link":"https:\/\/diagma.com\/en\/what-is-the-difference-between-supply-chain-operations-and-logistics\/","title":{"rendered":"What is the difference between supply chain, operations, and logistics?"},"content":{"rendered":"<p class=\"q-text qu-display--block\">They are all intertwined.<\/p>\n<p class=\"q-text qu-display--block\"><strong>Logistics<\/strong> is mostly concerned with <strong>organizing distribution, shipping and storing and order preparation in an efficient way.<\/strong> Comes from the \u201cmar\u00e9chal des logis\u201d, a military term coined by Napoleon for his army. Literally it is the person who in the army organizes the \u201clodging\u201d, a Marshall of Lodgings. As Napoleon once said \u201c<strong>l\u2019intendance suivra<\/strong>\u201d, meaning don\u2019t bother, \u201clogisticians\u201d will organize food and lodgings behind the stage.<\/p>\n<p class=\"q-text qu-display--block\">You can also say it meant \u201cdon\u2019t bother about supplies, my supply chain managers will take care of everything. They will organize procurement, storage and distribution\u00bb.<\/p>\n<p class=\"q-text qu-display--block\">Currently<strong> Supply Chain Managers organize the whole supply chain<\/strong>. Together with the Executive Committee they <strong>design the Supply Chain and manage it<\/strong>. And the supply chain includes <strong>all movements of goods between Company Suppliers and Company Customers, including transformation (production) operations.<\/strong><\/p>\n<p class=\"q-text qu-display--block\">But in most cases the Supply Chain Manager <strong>will not organize the shop floor in plants<\/strong> nor is he responsible for that. Strangely enough very often he is responsible for logistics operations, organizing the Warehouse and the Shipping. Strangely, because nowadays <strong>warehouses are no different from an assembly plant,<\/strong> assembling customer orders. The only reason, I believe, is that warehouses, contrary to factories, are pretty much the same whatever the industry. <strong>They stock<\/strong> pallets or cases or individual items, then <strong>they prepare customer orders<\/strong> of all sizes and mix.<\/p>\n<p class=\"q-text qu-display--block\">The Operations Manager is responsible for <strong>Operations: the way things are done.<\/strong><\/p>\n<p class=\"q-text qu-display--block\">Now in my opinion if you want logic in the system you should have the <strong>VP at the top responsible for Operations and Planning<\/strong>. Reporting to him, an <strong>Asset Operations Manager<\/strong> responsible for operating the plants and warehouses and <strong>the Supply Chain Manager who organizes and plans the movement of goods between all the entities in the network (chain) of supplies.<\/strong><\/p>\n<p class=\"q-text qu-display--block\">This means he is <strong>responsible for the planning<\/strong> of the movement of goods along the chain. The chain he manages, more of a network in fact, links <strong>Company Suppliers<\/strong> to <strong>Company Customers.<\/strong> It combines <strong>Manufacturing Plants, Distribution Centers and Transportation<\/strong>. This means he <strong>contracts<\/strong> with all these entities. He contracts (<strong>Service Level Agreement<\/strong> or SLA) with <strong>plant and DC managers<\/strong>, specifying for example <strong>the rate and cost of output expected from each manufacturing or logistic asset<\/strong> so that he can plan production and distribution,<\/p>\n<p class=\"q-text qu-display--block\">Together with <strong>Purchasing<\/strong> he <strong>contracts with Suppliers<\/strong> specifying lead-times and cost per \u201corder quantities\u201d.<\/p>\n<p class=\"q-text qu-display--block\">And finally, he <strong>contracts with Customers<\/strong>, jointly with <strong>Sales,<\/strong> again specifying <strong>Service to the customer<\/strong>.<\/p>\n<p class=\"q-text qu-display--block\">The assets can be outsourced of course. In this case the SC manager is a party in choosing and contracting with these outsourced partners.<\/p>\n<p>Let us sum it up:<\/p>\n<ol>\n<li>At the top, someone (most of the time called an Operations VP), is responsible for <strong>delivering efficiently quality products and quality service to customers<\/strong>.<\/li>\n<li>Reporting to him or her:<\/li>\n<\/ol>\n<ul>\n<li>On the one hand <strong>Asset Managers (Manufacturing, Warehousing, Transportation),<\/strong> managing daily operations in the plants and warehouses and distribution centers, handling the <strong>Physical part of the product<\/strong>. Sometimes <strong>Warehousing and Transportation is called Logistics<\/strong><\/li>\n<li>On the other a <strong>Supply Chain Manager<\/strong> organizing and planning the movement of goods along the Supply Chain, contracting with all parties involved, from Suppliers to Customers. He is responsible for the <strong>Service part of the product<\/strong> delivered to the customer.<\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>They are all intertwined. Logistics is mostly concerned with organizing distribution, shipping and storing and order preparation in an efficient way. Comes from the \u201cmar\u00e9chal des logis\u201d, a military term coined by Napoleon for his army. Literally it is the person who in the army organizes the \u201clodging\u201d, a Marshall of Lodgings. As Napoleon once &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/diagma.com\/en\/what-is-the-difference-between-supply-chain-operations-and-logistics\/\" class=\"btn btn-default more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;What is the difference between supply chain, operations, and logistics?&#8221;<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":4853,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[187],"tags":[],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v22.4 (Yoast SEO v23.5) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>What is the difference between supply chain, operations, and logistics? - Diagma<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/diagma.com\/en\/what-is-the-difference-between-supply-chain-operations-and-logistics\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"What is the difference between supply chain, operations, and logistics?\" \/>\n<meta property=\"og:description\" content=\"They are all intertwined. Logistics is mostly concerned with organizing distribution, shipping and storing and order preparation in an efficient way. Comes from the \u201cmar\u00e9chal des logis\u201d, a military term coined by Napoleon for his army. Literally it is the person who in the army organizes the \u201clodging\u201d, a Marshall of Lodgings. 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