When you see the word logistics, what comes to mind?
Most likely it is images of ships carrying goods, or airplanes filled with people. If you are a creative person, other images such as the process of setting up a trade show may be what comes into your mind.
Logistics as a definition is dependent on context. Let us help simplify it.
In the world of Supply Chain Management (SCM). Logistics usually refers to transportation. The movement of products or services from point A to point B.
As a result it is not difficult to see why most of the time people feel logistics = transportation. If you feel that way you are correct!! We in the industry may have confused you with our love for descriptive words and adding other activities to this very basic idea.
To understand this better, a quick history on how the word appeared may be useful.
In the really old days, ship owners were the major group of people who moved goods and facilitated trade. They moved stuff from point A to point B. This was called shipping.
When industries appeared, more things needed to get done and shipping as a term was no longer enough. This is because shipping describes a sea going vessel crossing an ocean, carrying goods. We thus needed a new word to describe new process of moving things and to give it a structure.
That word is Logistics.
From there, participants discovered new words. Their aim is to help give logistics more structure and to clarify definitions, roles and activities.
Hence freight (air, ocean, road) now describes the movement of goods from point A to B. PLs in the short forms (1PL, 2PL, 3PL) describes the role of a participant in the movement and how they work. Procurement (for example) describes the focus of the work and main activity.
Today, logistics as a word is once again no longer enough. This is because industries, business operations and how it works have changed again. A new word is needed to capture theses new changes. The new word to describe today’s movement of goods is Supply Chain Management or in short SCM.
SCM means more than transportation or its individual components. It is the work of bringing everything together to help businesses succeed.
To know more about how Supply Chain Management is different from Logistics. Please read our next article.
