While logistics and supply chain management are closely related, they serve distinct purposes:

  • Supply Chain Management: Encompasses the entire network of activities involved in sourcing raw materials, converting them into finished goods, and distributing those goods. It’s the bigger picture that extends beyond a single business.
  • Logistics: Focuses specifically on the part of the supply chain that a business directly controls. It includes the practical aspects of moving goods, managing inventory, and ensuring timely deliveries.

Why Is Logistics Important?

  1. Revenue Impact: Industry research shows that logistical disruptions can lead to revenue losses of up to 20% for companies1. An optimized logistics strategy is crucial for maintaining profitability, especially for small and medium-sized businesses (SMBs) with tight margins.
  2. Customer Experience: Efficient logistics directly affects customer satisfaction. For instance, out-of-stock messages can drive online consumers to shop elsewhere1.
  3. Cost Efficiency: Well-executed logistics minimizes operational costs, streamlines processes, and maximizes resource utilization.
  4. Global Trade: In an interconnected world, logistics facilitates international trade by bridging geographical gaps.