Difference between Logistics and Operations Management
Key difference: Logistics deals primarily with the planning and transportation of goods from one location to another as demand requires. Operations Management deals with the designing and controlling the process of production and business operations dealing with goods or services. Logistics is a segment under operations management.
In business, there are many different segments and departments, all of which have to work in unison for the business to succeed. Think of the business or company like a machine, and it is only productive or efficient if all of its cogs are well oiled and work in synchronization. Logistics and Operations Management are two such different departments.
Logistics or Logistics management is the part of supply chain management (SCM). It deals primarily with the planning and transportation of goods from one location to another as demand requires. It also deals with the storage and security of operations management.
Operations Management, on the other hand, is a completely different department. It deals with the designing and controlling the process of production and business operations dealing with goods or services. It deals with efficiency of production to yield maximum results. Basically, its primary function is to get the maximum production results from whatever resources are available to the company.
Hence, it can be said that the operations department oversees the entire production from the beginning which includes procurement of raw materials, storage and transportation, the utilization of the said resources, as well as people, equipment, technology, information, and other resources. It singular goal is to utilize all resources of the company to maximize production, and hence maximize profit.
The functions of a company or organization can be divided into three broad categories: marketing, finance, and operations. Everything that doesn’t fall into marketing or finance can be placed under operations. Operations is basically what the company does, the marketing and finance is there so that the company can keep conduction operations. So, in short it can be said that operations management takes care of all the operations (i.e. tasks) that take place in the company or organization.
Whereas, logistics is just a segment under operations as it deals with storage and transportation of materials, resources, work-in-progress, and finished goods. The confusion often occurs as supply chain management, which includes the aspect of logistics, and operations management are interrelated and dependent on each other. In fact, in a number of organizations, supply chain management is a department under Operations Management. Therefore, the logistics department can be part of the supply chain management department, or the entire SCM can be under operations management.
Comparison between Logistics and Operations Management:
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Logistics |
Operations Management |
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Definition (Business Dictionary) |
Planning, execution, and control of the procurement, movement, and stationing of personnel, material, and other resources to achieve the objectives of a campaign, plan, project, or strategy. It may be defined as the 'management of inventory in motion and at rest.' |
The design, execution, and control of operations that convert resources into desired goods and services, and implement a company's business strategy. |
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Description |
Logistics is 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. |
Operations Management is the administration of business practices to create the highest level of efficiency possible within an organization. It is concerned with converting materials and labor into goods and services as efficiently as possible to maximize the profit of an organization. |
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Part of |
Supply Chain Management or Operations Management |
Business Management |
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Entails |
Anything and everything to do with transporting goods and services |
Maximizing production by procuring and utilizing available resources |
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Functions |
Inventory Transportation Warehousing |
Start to End Production Procurement and Management of Resources, including raw materials, people, equipment, technology, information, and other resources.
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Reference: Business Dictionary (Logistics and OM), Investopedia (Logistics and OM), TechTarget, Wikipedia (Logistics and OM), InformIT Image Courtesy: logisticsman.com, instantassignmenthelp.com
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