1). Discuss the key difference between supply chain management and logistics.

(Question 1)

Logistics is a part of the supply chain process that plans, implements, and controls the
efficient, effective forward and reverse 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. The fact that logistics is explicitly recognised as part of supply
chain management means that logistics can affect how well (or how poorly) an individual firm
– and its associated supply chain(s) – can achieve goals and objectives (Murphy &
Knemeyer 2015, p. 20).

Supply Chain Management (SCM) has a leading role and is an integrating function with
primary responsibility for linking major business processes and business functions (such as
marketing, production, and finance) within and across supply chain partners, including
suppliers, intermediaries, third-party service providers, and end customers, into a cohesive
and high-performing business model (wisegeek.com 2016). It includes all the logistics
management activities and drives coordination and collaboration of processes and activities
with and across marketing, sales, product design, finance and information technology. SCM
requires companies to adopt an enterprise-to-enterprise point of view and apply the systems
approach across all organisations in the supply chain (Murphy & Knemeyer 2015, p. 94).
Thus the efforts of multiple organisations help in making the chain successful.

The major differences between logistics and supply chain management can be summarised
as below (Surbhi 2015):

Basis for Comparison Logistics Management Supply Chain Management

Meaning The process of integrating the The coordination and
movement and maintenance
of goods in and out the
organization is Logistics.
Objective Customer Satisfaction
Evolution The concept of Logistics has
been evolved earlier.
How many organizations Single
are involved?
One in another Logistics Management is a
fraction of Supply Chain
Management.
management of the supply
chain activities are known as
Supply Chain Management.
Competitive Advantage
Supply Chain Management is a
modern concept.
Multiple
Supply Chain Management is
the new version of Logistics
Management.

2) Why is supply chain integration so difficult in global supply chains? (Question 7)

Supply chains are becoming increasingly global in nature. The integration can be
challenging in a domestic setting, but integration challenges are even greater in global
supply chains, it can be extremely difficult to execute due to cultural, economic,
technological, political, spatial, and logistical differences (Murphy & Knemeyer 2015, p. 104).
Therefore, globalisation can be a barrier that blocks the effectiveness of supply chain
management.

Global supply chains translate into both longer and more unpredictable lead times (time from
when an order is placed until it is received) for shipments, which increases the chance that
customer demand might not be fulfilled, due to a potential out-of-stock situation. In addition,
recent research indicates that glitches are routine occurrences in global supply chains;
causes include, but not limited to, documentation errors, packaging errors, routing errors,
incomplete shipments, and failure to follow order guidelines. These and other global supply
chain glitches drive up supply chain costs and potentially jeopardise customer satisfaction
(Murphy & Knemeyer 2015, p. 104).

There are many challenges in global supply chains, for example:

 Difficulty in understanding overseas market

Understanding the overseas market is critical for the success of enterprises’ globalisation
efforts. It entails grasping an array of elements including overseas consumer needs, sales
and distribution channels, market and trade regulations, competitive landscape, and tax
levels. However, it is difficult for organisations to understand consumer preferences in the
overseas market due to culture barriers (Ryu, Kam, Ying, Jiang & Chao 2008, p. 12).

 Challenges in establishing and managing of overseas logistics and distribution networks

Companies that are in early stage of globalisation do not have sufficient management
expertise to develop the best mix and design of overseas distribution channels and logistics
networks on global operation, which including physical networks, business processes, and IT
infrastructure. They are also challenged to identify and manage the appropriate channel
partners. And the culture differences and language barriers further exacerbate these issues
(Ryu, Kam, Ying, Jiang & Chao 2008, p. 13).

 Challenges of data and information integration

The ability to seamlessly connect and share information with customers, partners, and co-
workers is vital for success; the meaning of all data items must be understood and the same
data item must have the same definition across multiple applications both within and outside
the firm. To make the integration process worth the effort, the data must be of high quality -
timely, accurate and relevant (Hussain AH and Nassar, OM 2010). It also requires a strong
technology infrastructure among the trustworthy supply chain partners (Kokemuller 2016).

References:

Hussain, AH & Nassar, OM 2010, Supply Chain Integration: Definition and Challenges,
Journal of Management and Technology, vol. 1, no. 1, pp. 4.

Kokemuller, N 2016, What Is Integrated Supply Chain Management?, eHow, viewed 7

November 2016, <http://www.ehow.com/about_6690370_integrated-supply-chain-
management_.html>.

Murphy, PR & Knemeyer, AM 2015, Contemporary Logistics, 11th edn, Pearson Education
Limited, Boston.

Ryu, S, Kam, M, Ying, Z, Jiang, YW & Chao, Y 2008, Globally Integrated Supply Chain, IBM
Global Business Services, viewed 6 September 2016, http://economists-pick-
research.hktdc.com/resources/MI_Portal/Article/ef/2008/11/4179/1242870993516_ibm08100
1.pdf

Surbhi, S 2015, Difference between Logistics and Supply Chain Management, key
differences, viewed 7 November 2016, <http://keydifferences.com/difference-between-
logistics-and-supply-chain-management.html>.

Wisegeek 2016, What Is the Difference between Supply Chain and Logistics?, Wisegeek,
viewed 7 November 2016, <http://www.wisegeek.com/what-is-the-difference-between-
supply-chain-and-logistics.htm>.