Logistics chain – a key component of the supply chain?

Logistics chain and supply chain are two concepts that are very often confused and even equated. Today we will try to explain what the difference between them is.

What is a logistics chain?

Let’s start by clarifying these two concepts. Every product takes a very long journey before it reaches the hands of the consumer. From the sourcing of materials/raw materials, to production, warehousing, transportation, all the way to the sales transaction. All the stages that a product travels make up the supply chain. This is a very broad term that includes a number of activities to be performed and usually includes several suppliers and companies. Due to the range of operations that take place in the supply chain, we can divide it into 3 main stages: procurement, production and distribution. The logistics chain, in turn, is one component of the supply chain. It is a narrower concept, which by its operations mainly includes the stage of warehousing, order picking and inventory management. In this case, all operations occurring in the logistics chain can be carried out by a single operator.

Logistics chain - a key component of the supply chain?

Functions of the logistics chain

An efficient logistics chain is the basis for getting the right product, in the right quantity, to the right place for customers. For this to be possible, continuous improvement and the search for opportunities to increase efficiency is an essential element. In the case of logistics chain management, a WMS system is very helpful, which is primarily used to optimize processes in the warehouse. You can read more extensively about the advantages and use of the WMS system in warehouse management in a previous post.

Supply chain and logistics chain are two elements that interact with each other. Currently, every company, regardless of the industry in which it operates, is trying to meet the needs of its customers as much as possible, which are increasing over time. In the age of online shopping, every orderer expects efficient and fast order processing. How the entire process is carried out, from the acquisition of raw materials to the delivery of the product to the final recipient affects the competitiveness of the company, and thus the basis for building a competitive advantage, which is currently very difficult to develop.

Correct order compliancy, on-time delivery and effective inventory management are elements that significantly affect customer satisfaction. Therefore, it is important to remember that optimizing the supply chain is only possible if the company has an efficient logistics chain.