In an earlier blog post, we wrote about the History of and Academic definitions of Supply Chain and Logistics Management. In this post on transportation and logistics management, we will provide the definitions of the two phrases remarking the differences between the two terms.
Transportation and Logistics Management Metaphor
Let’s look at transportation and logistics management in a metaphorical sense. Think about the details of personal travel and the complex logistics behind getting from point A to point B. Getting on the plane and getting off the plane are not the only parts of personal travel. Further, the primary level of transportation vs. all of the modes involved to get to the airport, such as a personal car are also key considerations in personal travel.
Additionally, you may have layovers, meaning you will have to sit in “People warehousing”. Finally, think of all the work that went into getting your tickets, what it takes for the staff to make your flight happen, etc. So, it begs the question, “What is Transportation and Logistics Management, and are they the same thing?”
What is Transportation and Logistics Management?
According to Wikipedia, transportation is defined as the movement of people, animals, and goods from one location to another. Modes of transport include air, rail, road, water, cable, pipeline, and space. The field can be divided into infrastructure, vehicles, and operations. Transportation is important since it enables trade between people, which in turn establishes civilizations. I find it an interesting point that transportation is an enabler of civilization, but this makes sense, as it enables the ability to trade and communicate.
According to the APICS dictionary, logistics is defined as 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.
The Council of Supply Chain Management Professionals (CSCMP) defines logistics as the process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound freight management, outbound, internal, and external movements.
After Asking “What is Transportation and Logistics Management?” Do you Think They are the Same Thing?
If you have read the above academic definitions, you will see that after Asking “What is Transportation and Logistics Management” it seems rather easy to see the difference between the two.
Transportation is the driver of logistics, but logistics is the race car driver in the seat of transportation. In fact, it’s easy to see from that sentence alone, the pure difference. Logistics requires planning, transportation is just the mode to execute the planning, when getting freight from point A to point B. Clearly, they are not the same thing, but transportation is just simply a part of logistics. When it comes to logistics, logistics executives must make further decisions beyond the mode of transportation to include:
- Importing and Exporting Regulations
- Freight Claims Management
- Choosing the correct LTL freight class for your shipment
- Working & collaborating with other executives within the supply chain
- Managing vendors and partners
- Responsible for mitigating risk and mitigating expenditures
This is another reason it is vital within the logistics departments of both small and large businesses, that executives don’t see software, such as transportation management system software, as the end all be all of logistics management. TMS software is helpful, but as you can see, beyond transportation procurement and management via software, there are many things a logistics executive faces.
Often, outsourcing logistics to an expert provider, who can not only offer software, such as a transportation management system, but also integrated services to deal with accounting, claims, and building custom inbound freight programs will allow logistics executives to have more meaningful collaborations with others in the supply chain and company at large.
Rather than focusing on all of the details and complexity of both transportation and logistics management, it allows the logistics executive to really focus on results and strategy for further logistics optimization, as opposed to tactics. When you can focus on results, and have a trusted partner help you, often both hard and soft cost savings are realized at a much more efficient and quicker pace. What are your thoughts on the importance of transportation and logistics management?