Supply Chain Management vs. Logistics Management: The difference

There seems to be some confusion about the meaning of Supply Chain Management (SCM) and Logistics Management. Some people use both terms interchangeably to refer to the same activity, while others know there is a difference, but can’t quite explain it.

Someone posted the question "What is the difference between Supply Chain Management and Logistics Management" on a popular networking website recently and received many different answers. Some of which were:

1. SCM is Procurement, Production Scheduling, Inventory Management, Logistics, Warehouse Management and Demand Planning (and in the best of worlds customer service and order management)
2. Logistics is a subset of SCM and involves all of the activities required to move the product along any one point in the supply chain with a focus on meeting or exceeding the needs of that one specific "customer of the process".
3. Supply Chain is the broad group of fields. Logistics is probably the largest subset. Yes, Purchasing and even IT have described as Supply Chain activities.
4. I like the SCOR Model which simply reduces the "Supply Chain" to Plan-Buy-Make-Ship & Return. Additionally, there are 4 Supply Chains: Information, Documentation, Materials and Financial. Too often we do not focus on all of them.
5. This is the evolution of a profession. At first the term was Physical Distribution Management. It then evolved to Logistics which morphed into Supply Chain Management.
6. Supply Chain is cradle to the grave. Logistics is a generation in the SC life.

At Logistics Advice we like to use the following definitions:

Logistics Management is the management of the flow of goods, information and other resources, including energy and people, between the point of origin and the point of consumption in order to meet the requirements of consumers at the lowest cost possible.

Supply chain management involves coordinating and integrating Logistics Management (as described above) within and among companies that are part of the entire supply chain of a particular product.

We agree with the statement that Supply Chain Management involves all activities in the supply chain: procurement, manufacturing, inventory management, warehousing, distribution. All these activities need to be synchronized and optimized in order to bring down the costs of moving a product through the different stages of the supply chain. IT is an example of a tool to achieve that goal.

SCM must involve the entire supply chain - from processing raw materials to the end consumer - from the "cradle to the grave" - to be truly called "Supply Chain Management" where Logistics Management can be executed at a local level (manufacturer, distributor, etc.) as well.