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Relationship between Logistics Management and Supply Chain Management

As the source of modern supply chain management, logistics management is also an important part of supply chain management, which is very different from traditional logistics management. Therefore, to understand the essence of supply chain management and the role of logistics management in supply chain management, we must understand the formation and development of logistics management.

Before the emergence of logistics management, enterprises did not have an independent logistics management business department, but were only regarded as part of manufacturing activities. In 1980s, the concept of integrated logistics appeared, which integrated the input and output logistics management of enterprises with some market and manufacturing functions. Supply chain management (SCM) is a new management model that appeared in 1990s, and then the concept of integrated supply chain appeared, seeking business opportunities through logistics coordination with other supply chain members.

Logistics refers to the material transfer activities between enterprises within the supply chain (excluding internal production activities). Modern enterprise logistics management unifies the two fields of production procurement and distribution, forming a logistics supply chain, which is the meaning of modern logistics management. Therefore, some people abroad think that supply chain management is actually an extension and expansion of logistics management. From the social point of view, logistics can be understood as all the activity networks that provide goods and services to the final consumers, that is, supply networks. And the supply chain is one of the channels, which is associated with several different management concepts:

Supply management: such as purchasing, inventory, transportation, order processing, etc. , related to the supplier's business, dealing with various business activities between the enterprise and the supply market, but excluding suppliers.

Logistics: refers to the material management and information management that reach the end users through distribution channels.

Logistics management: dealing with the most direct users of the enterprise, mainly a class of users, not involving the business relationship between the second class of users, selling products to users, not indirect users.

Material management: refers to the middle part of supply chain logistics and information flow. Including procurement, inventory management, warehousing management, production planning and control, distribution and distribution management. That is, from the purchase of raw materials into the factory, production to the delivery of products to users (first-class users), excluding suppliers, distributors and suppliers' end users.

Supply chain management: it is a broader cross-enterprise management than material management. It grasps the needs of end users from a strategic perspective, and obtains the best results in terms of cost, time, efficiency and flexibility through effective cooperation among enterprises. Including all activities from raw materials to end users, is the process management of the whole chain.