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The role of logistics in the supply chain

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What is the role of logistics in the supply chain? The truth is that it is easy to be deceived and believe that both concepts are identical, since we often use them as synonyms. However, logistics and supply chain refer to different realities and different roles within the operations of a company.

The work of logistics in the supply chain

Hierarchically, logistics is a part of the supply chain. The supply chain is a concept that encompasses many more tasks than logistics. However, when we are faced with issues related to transportation in the supply chain, it is when this erroneous use of both as synonyms occurs.

To understand the role of logistics in the supply chain, it is probably best to explain what tasks each performs.

supply chain tasks

The supply chain deals with the product from its conception to its end (which can include processes such as reverse logistics, waste management, etc.). In this process there are tasks completely unrelated to logistics. The product must be designed, there must be a supply of raw materials and/or semi-finished products for its manufacture, a forecast of demand, customer service, design of sales channels, etc.

Logistics is often defined as bringing the necessary amount of product, at the necessary time, to the necessary place and in the correct condition. Logistics is going to play a vital role in this, but it is the supply chain that is in charge of determining what that product is, what quantities are indicated, what deadlines we will have for manufacturing and shipping, etc.

Logistics tasks in the supply chain

What is left for logistics then? What are its own functions and how does it add value to the process? Logistics, as we have commented before, is what will make the part of the supply chain plans related to the movement of merchandise a reality.

In this sense, the work of logistics in the supply chain is, for example, to ensure that the movements of merchandise, transport, storage and preparation of orders are done in the most efficient way possible (which includes quality in the service and its cost). Although the supply chain encompasses more processes, it is also the responsibility of logistics that the traceability of products is transparent in the parts it deals with.

Another task is managing own resources and/or finding and maintaining the right suppliers for the needs of the supply chain. The vast majority of companies outsource logistics in one way or another (whether completely or partially), but that does not mean that their work and their responsibility for monitoring, quality control, and costs end there.

Although logistics in the supply chain is a link, the fact that it is often confused as a synonym gives us an idea of the importance it has in its proper functioning.

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