The primary distinction between supply chain management and operations management is that the supply chain is mainly concerned with what happens outside the company (obtaining materials and delivering products), while operations management deals with what happens inside the company. Operations management is usually associated more with the production of goods than with the movement of goods. However, some would say that operations management is the basis of both supply chain management (SCM) and logistics. As operations management involves transforming inputs into outputs, it can also include services and not just limit itself to production.
The inputs can include anything from materials, equipment and technology to human resources, such as drivers and warehouse operators. Logistics is mainly focused on organizing the distribution, shipping and storage and preparation of orders in an efficient manner. It originates from the “Maréchal des Logis”, a military term coined by Napoleon for his army. Literally, he is the person who organizes “accommodation” in the army, a marshal of lodgings.
As Napoleon once said: “L'intendance suivra, which means don't bother”, logistics specialists will organize food and accommodation backstage. Logistics is an aspect of the supply chain that stores or delivers finished products or services to the customer, whether a manufacturer, distributor, or consumer. Both disciplines require careful coordination of supplies, labor, and facilities to ensure that items can move through the supply chain as needed. As part of the SCM function, the company obtains the chemicals and packaging it needs from suppliers, manufactures the final product, and then distributes the finished products to convenience stores, pharmacies and supermarkets.
He depends on an asset operations manager responsible for operating plants and warehouses and a supply chain manager who organizes and plans the movement of goods between all entities in the supply network (chain). In supply chain management, logistics is responsible for the movement and storage of goods and services, along with the documents and reports that record those movements along the journey of an item to the customer. SCM involves overseeing an often extensive network of sub-suppliers (such as raw material suppliers), suppliers, manufacturers, logistics partners, wholesale distributors, retailers and end users. There are many similarities between supply chain management (SCM) and logistics, but there are key differences that separate the two practices.
If you're a professional prepared to rise to a managerial or leadership position, it's important to consider the similarities and differences between the fields of operations and supply chain management before taking the next step in your career. Whereas supply chain management manages activities between separate entities, logistics focuses on the internal movement of goods. Depending on the size of the organization, operations managers manage the daily operations of the entire company or may manage a specific part of the production process. While operations managers and supply chain managers lead different areas of an organization, both are called to contribute to business value.
Logistics is a fundamental part of supply chains because it manages and tracks the people and resources needed to store and transfer goods and services. SCM uses logistics to deliver goods to the consumer but ultimately strives to improve results and increase a company's competitive advantage. Industry publications such as Forbes, Supply Chain Quarterly and Fortune point out that demand for supply chain and logistics professionals is high with salaries being higher than average. It's important for professionals looking to advance their career in either field to understand how they differ from each other so they can make informed decisions about their career path.