As your company expands, the importance of effective supply chain management increases more and more. Two terms you’ll frequently see used are “procurement” and “logistics.” Although many people use these words interchangeably, they actually refer to very different areas of your business. Here are the key differences between procurement and logistics as well as the best strategies for your company to utilize in achieving greater efficiency.
1) Logistics Equal Supply Chain Organization
Procurement refers to people who are directly responsible for purchasing any products related to the company. This includes raw materials, machine parts, and other items along with coordinating their delivery to key locations. Logistics is a broader term. Logistics specialists organize everything else. They may oversee the procurement process, but they’ll also facilitate shipping and export as well as examining costs and efficiencies within a company’s total supply chain.
2) Procurement is Buying While Logistics is Organizing
As soon as you see the word “procurement,” you should immediately think “buying.” Typically, this excludes other features like operations, management as well as selling. Logistics is a broader role and excludes operations, management and financing and sometimes even marketing. Ultimately, procurement refers to half of the supply chain while logistics is more encompassing and holistic.
3) Procurement Needs Logistics
Since logistics plays a complete role, procurement people need logistics to organize the complete product cycle journey. This means logistics are there to coordinate the delivery of raw materials across to different manufacturing plants all the way to delivery on the customer’s doorstep. This also includes the tools and other service needed to make everything move quickly and efficiently.
4) Procurement is Early Stage
Procurement works with suppliers to create plans that will support the development and manufacturing of new products. Some of their other responsibilities include resource planning, order placement, storage, negotiations, and quality assurance. As their role expands, these specialists continue to work on concerns like research into new source materials, scheduling, and continuity.
5) Logistics Covers the Rest
Logistics focuses on everything else needed to get your products where they need to go. Once raw materials are sourced and products and manufactured, logistics really go into full swing. Logistics includes everything from physical shipping to customer service and marketing assistance. Essentially logistics coordinates with every other party to ensure seamless and effective product distribution.
Giving Your Business the Coordination it Needs
In today’s highly globalized and interconnected world, competition is fierce. The company’s that succeed aren’t just those with fantastic products but are also quick and efficient in moving items through their supply chains and out onto the market. If you are looking for an excellent logistic partner, then HLOGCam is the perfect logistics provider for you. We have the tools, training, and experience to help in every stage of the process from road freight and customs clearance to relocations services and so much more.