Consequences of Confusing Between Supply Chain and Logistics Can be Painful

Recently, obstetrician Dr Liu Hongmei hit global headlines when she disclosed the story of a young couple who came to her after four years of intense attempt to get pregnant.

As it happens in these cases – when the wife could not get pregnant even after 4 years of marriage, the family pressure was piling on. Speculation and rumours abounded. The desperate couple were ready to try anything – including visiting a doctor.

That is when obstetrician Dr Liu Hongmei got to examine the couple. They spoke about their intense desire for a child. They spoke about their struggle with painful sex at a very high frequency. And, they spoke about the family pressure.

The events unfolded village in Bijjie city in the south-western Guizhou province.

When Dr Liu examined the wife, and was confused to find that she was still a virgin.

I know, now this story gets a bit hard to believe. I had the same reaction.

For those who want to verify it – here is the story. This is not the only place you can read it, you can also find it in many other places, including here, here, or here.

If you have not read the entire story, then you should do so before continuing.

Now coming to the main point of this blog post –

To all those people who think of supply chain as something vaguely to do with logistics or procurement, my message is this:

Exactitude is equally important in supply chains.

Technique is vital. While, in the case quoted above, it comes naturally to most people, it does not come naturally in case of  business transformations using supply chains.

Vague attempt in the general direction does not lead to success. Read the news story linked above again to know about all the futile pain the poor lady had to go through.

I wrote this blog post so that I can refer to it in future posts when writing about case studies I have seen over the last 22 years of supply chain transformation projects where companies confuse between supply chain and logistics, or between supply chain and procurement.

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Vivek Sood

My name is Vivek Sood, and I am an ex-ship captain and I specialise in global supply chain strategies for over 25 years. In 1997, I started my first SCM strategy project after I joined Booz Allen & Hamilton, the company that invented Supply Chain Management (SCM). I was blown away by the potential of SCM, and decided to learn and become one of the best in this field. I sought out the people who 'invented' SCM and requested their mentorship, and dedicated the next 5 years to working very long hours on some of the most challenging SCM projects. In 2000, I took the leap and co-founded Global Supply Chain Group. It was not an easy run - at that time, not many people knew what supply chain meant. Since then we have done a lot - but my current work is even more interesting. My current interests include studying the differences between those supply chain professionals who become the CEOs of their corporations, and those who do not. As more and more supply chain professionals get on the boards of directors of their companies, it is clear that some key factors separate those who make it to the very top, and those who remain at the tactical level - I am actively building exciting intellectual capital in this arena. What drives me to do this? And, why many of my clients also call me 'Mr Supply Chain'? You can get answers on my personal site - What are my professional qualifications and credentials? On my professional profile on LinkedIn you can find the details of over 400 projects covering over 85 countries and added value of over $1 Billion to our customers' bottom line. I have also written (or co-written) 4 seminal books, over 20 other major reports, 120 articles, and studied over 2000 supply chains in the last 25 years. Who are my clients, and what kind of work I excel in? You will need to contact me for that information -

  • Jaz says:

    How do you link the two – a couple’s desperate attempt for a baby with the business transformation inside a company. I do not see the link.

    • Vivek Sood says:

      Thanks for your question Jaz (Jason?), and thanks for reading my blog. I think I can guess where you are based and why you do not see the link. Not all education comes from universities (ivy league?).

  • CoolStory says:

    I read the story linked by you. It is unbelievable. But then so are some of the things that happen in the corporate world.

    • Vivek Sood says:

      Why don’t you recount some of the case studies (stories) from your observations in the corporate world. No need to reveal the names of the guilty.

      The stories will add texture to the discussion.

  • suplychnhero says:

    i read many blogs in this site. commenting first time. in my company everyone talks about supply chain as logistics. what else is there?

    • Vivek Sood says:

      Thanks for reading my blogs – you are hero. You raise a very valid point – which many people suspect, but they are afraid to raise. If logistics and supply chain were same, then what was the need to ‘invent’ supply chain? The answer to your questions is within my blogs too. I also cover it in my workshops.

  • Saulito says:

    Great! I like the way you correlate this real life story to business issues. It shows power of positive mindset and right guidance toward resolving the issues – whether personal or business. I’ll be awaiting for your upcoming blogs which will be based on your past experience.

    • Vivek Sood says:

      Not all my blogs are based on personal experience – some are just based on things I read (as this one clearly is). Stop by and comment on other blogs when you read them.

  • Gabriel says:

    Your blog is very practical to show the difference between Logistics & Supply chain. Here is the basic difference at my point of views:

    Logistics is a very old term, firstly used in the military, for the maintenance, storage, and transportation of army persons and goods. Nowadays, this term is used in many spheres, not specifically in the military after the evolution of the concept of Supply Chain Management. It has also been said that SCM is an addition over Logistics Management as well as SCM comprises of logistics. Both are inseparable. Hence they do not contradict but supplement each other. SCM helps Logistics to be in touch with the transportation, storage, and distribution team.

  • Aiden says:

    To make confusion clear about supply chain I have done a recent search on Supply Chain.
    A supply chain consists of everybody involved in getting your product in the hands of a customer. It includes raw material gatherers, manufacturers, transportation companies, wholesale warehouses, in-house staff, stock rooms and the teenager at the register. It also includes the tasks and functions that contribute to moving that product, such as quality control, marketing, procurement, and sourcing. Using the above analogy, the supply chain can be considered the entire chair, while procurement and sourcing are parts of the chair.

    • Dennis says:

      Hey Aiden, here i am having my points also on the supply chain have look and make me correct if i am wrong anywhere….
      Supply chain management (SCM) is the oversight of materials, information, and finances as they move in a process from supplier to manufacturer to wholesaler to retailer to consumer. The three main flows of the supply chain are the product flow, the information flow and the finances flow.

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