- by Best Inc.
- May 3, 2020
To a layman, logistics and distribution are terms that may often be used interchangeably. Both terms suggest the movement of goods from one place to another. However, in supply chain management or in jobs in logistics centres or distribution companies, or where the job title includes either of the above terms, it may be necessary to understand the distinct differences between the two. For starters, let us look at the definitions of these terms, according to the Supply Chain Management Definitions and Glossary by the Council of Supply Chain Management Professionals (CSCMP).
Logistics management is defined by the CSCMP as that part of supply chain management that plans, implements, and controls the efficient, effective forward and reverses flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers requirements.
Logistics management activities typically include inbound and outbound transportation management, fleet management, warehousing, materials handling, order fulfillment, logistics network design, inventory management, supply/demand planning, and management of third party logistics services providers.
According to the CSCMP, distribution is defined as the activities associated with moving materials from source to destination. Can be associated with movement from a manufacturer or distributor to customers, retailers or other secondary warehousing / distribution points.
The Difference Lies In Context
What, exactly, is the difference between the two terms, based on the definitions? It is hard to tell simply by reading the definitions aloud. Some may see distribution as being a subset of logistics, where logistics involves the management of many more moving parts.
In practical contexts, it may be easier to know the differences. The size and structure of an organization effectively determines its logistical or distribution needs, and hence defines the work scope of the job title in question.
Multinational corporations, which are usually very large and have several departments, are likely to have separate departments such as a Logistics Department, a Distribution Centre, a Freight Management function, a Warehouse team, an Inventory Management department, and a Planning team. As the business is so large, these activities are all broken down into smaller, more focused functions, with distinct roles and responsibilities.
On the other hand, small companies would usually have one team handling all the various functions encompassed under Logistics and Distribution. This one team, or sometimes one person, may be running every single node of the operations, from calling suppliers for price negotiations, to arranging for delivery people to pick up items to be sent out, to drawing up plans, releasing orders, and counting inventory. For these jack of all trades type roles, the practical distinction between logistics and distribution becomes blurred and irrelevant.
Given the above definitions, it would be easy to say that distribution and logistics are for the most part synonymous, when it comes to a general understanding of the terms. When delving deeper, distribution may be seen as a subset of logistics, where logistics management is very much more involved with more aspects to it to handle than distribution. Logistics is considered to be a more all-encompassing, end to end function in supply chain management. If you are looking for distribution services for your retail business, Best Inc. may just be the solution for you. With our coast-to-coast, online-to-offline distribution capabilities, we are the number one choice for your business needs. Contact Best Inc. today to discuss further how our partnership may benefit your business.