Consequences of Confusing Between Supply Chain and Logistics Can be Painful

Consequences of Confusing Between Supply Chain and Logistics Can be Painful


Vivek Sood




January 8, 2019

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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  1. These ideas and concepts will be usually expressed by our thought leaders in multiple forums - conferences, speeches, books, reports, workshops, webinars, videos and training. You may have heard us say the same thing before.
  2. The date shown above the article refers to the day when this article was updated. This blog post or article may have been written anytime prior to that date. 
  3. All anecdotes are based on true stories to highlight the key points of the article - some details are changed to protect identification of the parties involved. 
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Vivek Sood

Our Quick Notes On Five Flows Of Supply Chain Management

Part of our new “Quick Notes” series – this report answers your most pertinent questions of the topic.

  • What are the five flows of SCM?
  • Why are they important TO YOU?
  • How can you map, track, and optimise these flows to serve YOU?
  • What is the importance of difference between "Supply Chain" and "Value Chain"?
  • What are the stellar case studies of each of the five flows?


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  • 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.

    • 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?).

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

    • 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.

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

    • 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.

  • 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.

    • 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.

  • 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.

  • 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.

    • 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.

  • Easily confused, but far from the same, supply chains and logistics are both key components in the process of bringing a product to the marketplace. Put simply, logistics, and the functions included in a company’s logistics department, are just one aspect of overall supply chain management. The discourse surrounding the subtleties of this relationship, however, varies broadly, and may be confusing for some starting out.

  • Shippers often confuse the terms logistics management and supply chain management. Each word is used to describe very similar functions and operations in the transportation industry. Logistics management refers to managing the flow of goods, information, and resources from the beginning point of external origin to the point of consumption and reverse. While supply chain management is a control over integrated network processes, providing the end customer with a product or service and meeting all his/her requirements. It includes numerous aspects of logistics management and demand planning which coordinates processes within and among companies.

  • A supply chain manager is mainly focused on creating the most effective value chain possible, boosting efficiency along every step of a company’s operations. The driving goal behind an effective supply chain is competitive advantage. The specific strategies and tools employed through the supply chain can dramatically affect a company’s bottom line, so taking the time to develop a coherent, tailored plan is paramount. New technology, lower production costs, and social-impact responsibilities all intertwine to shape today’s supply chains.

  • The supply chain is the processes and the flow of goods from the source to the end-consumer. The unfortunate paradigm of a chain, a sequence of links, has contributed to the confusion about what a supply chain really is, and has hindered progress in supply chain management. Connecting and trading with other companies is the essence of business, and in today’s dynamic, global environment, it’s more important than ever to be able to quickly and easily connect with trading partners. Communication and collaboration must be real-time in order to fully optimize the supply chain. Delays and stale data cost time and money.

  • Putting essentially here, coordination and the capacities incorporated into an organization’s coordination division are only one part of generally speaking warehouse and supply chain network on the board. Effectively befuddled, yet a long way from the equivalent, supply chains, and coordination are both key segments during the time spent carrying an item to the commercial center and changes comprehensively by encompassing all nuances.

  • I found this article really interesting and useful. Coordination and production, each word is utilized to portray fundamentally the same as capacities and tasks in the transportation business in a business and production network. Coordination the board refers to dealing with the progression of products, data, and assets from the earliest starting point purpose of outside root to the point of utilization and switch.

  • The particular systems and instruments utilized through the supply chain network can drastically influence an organization’s primary concern, so setting aside the effort to build up an intelligent, customized plan is central. A productive supply chain network director is fundamentally centered on making the best esteem chain conceivable that has the potential of boosting productivity along with each progression of an organization’s activities.

  • Associating and exchanging with different organizations is the essential constituent of business, and in the present dynamic, keeping in mind the global perspective, it could really be compared to ever have the option to rapidly and effectively interface with exchanging accomplices. Correspondence and joint effort must be constant so as to completely improve the supply chain network and make it more useful.

  • The inventory network is the procedures and the progression of products from the source to the end-shopper and end user. The tragic worldview of a supply chain as a grouping of connections has added to the disarray about what an inventory, warehouse, logistics, and supply chain network truly is. Resultantly, the approach has blocked advancement in supply chain network management procedures and management protocols.

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