Differentiate Your Supply Chain Management Using Logistics Part 1

  August 21, 2013       By Ray Atia
Since the innovation of EDI software the concept of supply chain management (SCM) or integrated logistics has transformed the scope of workday processes and procedures. If SCM covers the entire operations activity of an organization from start to finish, logistics is a decoupling point between company and transport services. Differentiation between the two possible scenarios can illustrate a number of challenges in design and implementation of an EDI program. The foregoing is a discussion about the differences between logistics in SCM, and logistics as a separate function of SCM. EDI program design is informed by “Logistics” and “Supply Chain Management” theory. Logistics describes the transportation process by which planning and execution goods distribution is the controlling interest of a department. Storage may be involved in this. From point of origin to point of consumption companies conform to order requirements at each stage of the inbound, internal, outboard or external transfer of goods. Logistics is at its most fundamental the management of the flow of goods and services from point of supply to customer. Operations SCM entails planning and management of all supply chain activities. Secondary activities such as financial control of department budgets, sourcing and procurement and conversion of goods and services, inclusive of logistics activities comprise SCM as a process. SCM systems may involve partner collaboration with customers, intermediaries, third-party service providers and suppliers. The formidable basis of business operations management planning and execution, SCM systems support both internal and external business processes as one. SCM authority is normally constituted of five (5) relevant departmental functions: 1) Information Systems (ERP and EDI); 2) Production and Inventory Control; 3) Strategic Procurement; 4) Transportation and Warehousing; and 5) Supply Chain Improvement. Communications management between departments is the core competency supported by EDI software systems integration. Performance benchmarking of SCM value chains analyze infrastructure at decoupling points in the process. As goods and services move through the system or are enacted, logistics and manufacturing operations are incorporated into SCM. Strategic planning may use SCM as a springboard to planning budgets in other areas (i.e. IT, sales and marketing and RandD). Elaboration of the two concepts, Logistics EDI and SCM provides comparative insight into the broader field of management operations theory. Analysis of scenarios deploying both concepts as “values” in operational chain management proffers lessons learned about the different challenges and outcomes in business process and in audit. EDI specialists stand to benefit from the various frameworks in planning, implementation and update of an organizations operations on the ground. With the entrance of cloud computing platforms and web based enterprise applications in operations settings, EDI has much to consider relevant to the structural design of those processes.