High-performing supply chains lead to above-average growth. But what is the difference between supply chain management and logistics management? And how can optimized logistics management—particularly inbound—lead to increased profits for your company?
Supply Chain and Logistics Management are Interrelated, Yet Different
Though the terms sound similar, it’s a case of macro (supply chain management) vs. micro (logistics management).
Supply chain management provides a “big picture” master plan, to be implemented by inbound and outbound logistics management which moves products from point A to point B, within one company.
More specifically, inbound logistics is in charge of goods (e.g., raw materials and tools) on the way into warehouses, with communication between the warehouse and those who supply the goods; outbound logistics handles transportation of goods (typically consumer-ready end products) leaving the warehouses and making their way to customers.
Other specifics of logistics include warehousing, transportation and order fulfillment; planning, inventory and production are under the supply chain management umbrella.
Supply chain management is overarching and includes all movement necessary for product delivery to the customer, throughout all businesses in the entire supply chain.
The Crucial Importance of Supply Chain Management
While the “flashier” outward facing activities like marketing and sales and even R&D have gotten more attention in recent years, supply chain management has appropriately stepped onto center stage for several reasons:
- If a customer doesn’t receive their product, branding and promotion are worthless—timely and correct delivery of goods is what builds brand loyalty
- Increased profits are enjoyed when a company streamlines its processing, storage and transporting operations
- Businesses with transparent supply chains are careful to choose ethical partners, ensuring legal and brand protection
Companies of all sizes can apply these ideas to their supply chain management and enjoy lower operating costs and happier customers.
Tips on Optimizing the Inbound Logistics Process
Inbound logistics are considered by many experts to be the most difficult, yet the most rewarding, to optimize. When supply chain management and warehouse operators collaborate to streamline processes, the result can be lower transportation costs. Foundational ideas include:
- Determine a mutually beneficial plan of action with your partners/suppliers and offer them choices for billing and service.
- Establish mandatory guidelines in the form of a standard routing guide for all shipments. Carriers and warehouses tend to be more efficient when they’ll pay a price for non-compliance.
- When possible, reduce uploading and freight expenses with full truckload consolidation.
Goals can be reached and costs reduced when partner collaboration is enhanced by technology. Contact us today to learn how Amrate, our industry leading 3PL software platform, can help you save money and improve productivity while enjoying total transparency to your supply chain. Or click below to request a FREE trial of cloud-based Amrate.