Supply Chain Term

[EuroLog]

I have not tried to write article on the web before so here go. One thing that confuse many people is the different terms used in our Industry. I hope this help them. I will try to explain, from bottom term to top level.

Warehousing. This refer to the activity of storing product. Normally finished goods, though can also be raw material. Would include things like receipt, storage, picking, stocktaking.

Transport. This refer to the activity of moving goods at variety of stages. Supplier to warehouse, factory to warehouse, warehouse to warehouse, warehouse to customer. Often called Secondary transport (to customer) or Primary transport (from supplier or factory, to warehouse).

Distribution. This refer to the storage and sending of finished goods to customers. So includes warehouseing and secondary transport above.

Logistics. This refer to all three above, so include from supplier/factory to the customer.

Supply Chain. This refer to all above but also same activity in supplier business. So term is much bigger tan just own business.

Sorry if this is bit short but I think many people confuse over these terms and mix up alot.

EL

[Starbucks Junkie]

EL,

Thank you.

[apparelink]

Originally Posted by EuroLog

I have not tried to write article on the web before so here go. One thing that confuse many people is the different terms used in our Industry.

What is your industry? Interesting to see how different people have different takes on these terms.

APICS has the following definitions:

warehousing : The activities related to receiving, storing, and shipping materials to and from production or distribution locations.

transportation : The function of planning, scheduling, and controlling activities related to mode, vendor, and movement of inventories into and out of an organization.

distribution : 1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Syn: physical distribution. 2) The systematic division of a whole into discrete parts having distinctive -characteristics.

logistics : 1) In an industrial context, the art and science of obtaining, producing, and distributing material and product in the proper place and in proper quantities. 2) In a military sense (where it has greater usage), its meaning can also include the movement of personnel.

supply chain : The global network used to deliver products and services from raw materials to end customers through an engineered flow of information, physical distribution, and cash.

Wikipedia has some even more practical descriptions on these terms.

I have worked in the TCF (textiles, clothing and footwear) sector for many years in a manufacturing setting and 5 years in distribution and retail within the Australian market, during which I had to deal with offshore manufacturers, freight forwarders, domestic 3PL providers and transport companies. What adds to the confusion is that many of these people use the term supply chain in their own right and they like to call themselves "solutions". Even some sourcing agents call themselves experts in supply chain management when all they are dealing with is only one segment of the supply chain.

As for me, I tend to keep things simple:

You are either downstream or upstream in the supply chain.
Transport : Deals with things that are on the move
Logistics : Deals with things that are stationary under the roof of warehouse or factory premises
Supply chain : Deals with 3 flows end-to-end---material flow, information flow and cash flow.

Your definitions would certainly be a subject of your own industry influence. What I would try to avoid is being too prescriptive.

[Starbucks Junkie]

Apparelink,

Thank you for your concise definitions, indeed term definition is down to personal interpretation, one mans Logistics, will be another mans Distribution etc etc.

I will assume that this is an entry to the Article competition.

SJ

[EuroLog]

Originally Posted by apparelink

What is your industry? Interesting to see how different people have different takes on these terms.

I am in Industrial products. You are right I think about industry perspective.

[apparelink]

Originally Posted by Starbucks Junkie

Apparelink,
I will assume that this is an entry to the Article competition.
SJ

Hi SJ,

Actually this is not my entry yet. I will post my piece before the end of Oct on RFID.

Scott

[Starbucks Junkie]

Originally Posted by apparelink

Hi SJ,

Actually this is not my entry yet. I will post my piece before the end of Oct on RFID.

Scott

I look forward to reading it.