Have you ever wondered what distinguishes supply chain management from logistics management? For many people, it's a distinction without a difference. As supply chain academics at Michigan State University write, "The terms logistics and supply chain management are sometimes used interchangeably. Some say there is no difference between the two terms, that supply chain management is the 'new' logistics. To compound this, what is considered supply chain management in the United States is more commonly known as logistics management in Europe."[1] The Michigan State academics insist there is a difference. They write, "While these two terms do have some similarities they are, in fact, different concepts with different meanings. Supply chain management is an overarching concept that links together multiple processes to achieve competitive advantage, while logistics refers to the movement, storage, and flow of goods, services and information within the overall supply chain."

In today’s highly charged trade-war environment, the movement of goods around the world is making headlines almost daily. Trying to restrict that movement goes against the flow of history. Recorded history underscores the fact that humans have always connected and traded with other humans. Another way to state that is: Logistics is an essential part of the human experience. The staff at Mecalux explains, "Logistics has played a crucial role in the development of humanity throughout history. From the origin of logistics — with the first efforts made to transport goods and supplies — to today’s most complex management and distribution systems, logistics has become a pillar of the business world. Every stage in the history of logistics has been marked by technological advances and changes in transport, storage, and management methods. The goal? To improve efficiency and the flow of goods and services."[2]

That goal is reason enough to celebrate logistics. Back in 2019, Logistics Plus felt that logistics was an underappreciated sector of the economy. The company also believed those who work in the industry needed a shout out. As a result, Logistics Plus partnered with the Registrar at National Day Calendar to create National Logistics Day on 28 June. The following video provides an overview of why logistics remain vital to global and national economies.

According to Logistics Plus, “More than 9 million people [in the U.S.] rely on the logistics industry as their primary source of income. American businesses invest heavily in shipping their products, with logistical expenses amounting to about $1.5 trillion annually, nearly eight percent of the U.S. GDP.”[3] As the video noted, people working in the logistics sector were critical for maintaining the health and welfare of the U.S. public during the pandemic — and they continue to play an essential role in securing Americans’ well-being. The staff at Taylor Logistics notes, “Every year, on June 28th, the world celebrates National Logistics Day! It might be one of our favorite days of the year. This particular day pays tribute to the unsung heroes who work tirelessly behind the scenes, ensuring the smooth flow of goods and services across the globe. The logistics industry supports economic growth and international trade, from transporting raw materials to delivering finished products.”[4] The Taylor Logistics staff goes on to detail four contributions logistics personnel make to a prosperous economy. They are:

● Supply Chain Efficiency: “Logistics professionals optimize the supply chain to enhance efficiency, reduce costs, and improve delivery times. They employ sophisticated technologies and data-driven strategies to streamline operations, enhance inventory management, and minimize wastage.” It should come as no surprise that artificial intelligence solutions are playing an increasingly larger role in helping to ensure value is created in the logistics sector.

● Global Trade Facilitation: “Logistics professionals facilitate the movement of goods across borders, ensuring compliance with customs regulations, handling documentation, and coordinating with various stakeholders. They help bridge the gap between manufacturers and consumers in different countries, fostering economic growth and promoting cultural exchange.” During these turbulent times, they are the first responders on the front lines of the trade war.

● Crisis Management: “Logistics experts are adept at managing unexpected disruptions and crises, such as natural disasters or global pandemics. They develop contingency plans, reroute shipments, and ensure the availability of essential goods and medical supplies during times of emergency, playing a vital role in supporting communities and maintaining stability.” Here, too, artificial intelligence solutions can help. For example, the Enterra Dynamic Enterprise Resiliency System™ (EDERS™) is a solution that arms enterprise executives with the ability to predict the future and act accordingly to turn chaos into a competitive advantage.

● Sustainability and Environmental Responsibility: “With growing concerns about climate change, logistics professionals are increasingly focusing on sustainable practices. They explore alternative fuels, optimize transport routes, and implement eco-friendly packaging solutions to minimize their environmental footprint and contribute to a greener future.” As governments back away from environmental commitments, businesses will need to adapt to worsening climate conditions. Logistics professionals will likely lead in these efforts.

One thing of which I'm certain: Logistics professionals will never stop trying to improve how goods move around the globe. And artificial intelligence is likely to play a major role in any future improvements. Supply chain journalist Robert J. Bowman predicts, "AI, and GenAI specifically, will eventually come to play an indispensable role in logistics and other industries. [The Boston Consulting Group] believes GenAI will make it possible for organizations to 'increase productivity, enhance efficiency and effectiveness, boost revenue, and build a long-term competitive advantage.' It's just a question of when."[5] Join me in honoring those who labor in the logistics sector. Without them, life would be much less interesting and much more difficult.

Footnotes

[1] Staff, "Is Logistics the Same as Supply Chain Management?" Michigan State University, 30 October 2020.

[2] Staff, "Logistics history: origin and development," Mecalux Blog, 1 August 2023.

[3] Staff, “National Logistics Day,” Logistics Plus.

[4] Staff, “Celebrating National Logistics Day: Honoring the Backbone of Global Commerce,” Taylor Logistics, 21 June 2023.

[5] Robert J. Bowman, "The Role of AI in Logistics: Getting Beyond Hope and Hype," SupplyChainBrain, 13 May 2024.