What’s The Word? The Language of Logistics

Upstream vs. Downstream

Some organizations divide the supply chain into two parts to simplify management: upstream and downstream.

The upstream supply chain includes all activities related to the organization’s suppliers, which source raw material inputs to send to the manufacturer.

The downstream supply chain refers to activities post-manufacturing, namely distributing the product to the final customer.

Downstream supply chain can also be thought of as the “demand” while upstream supply chain is the “supply.” Supply chain managers seek to balance demand and supply to make sure there are no lost sales, inventory shortages, or over-ordering. Supply chain inefficiencies can waste up to 25% of operating costs, so matching supply and demand is of paramount importance.

Delineating upstream vs. downstream portions of the supply chain can help supply chain managers get a handle on three main flows—materials, money, and information—that happen in the creation and distribution of a product.

Say What? Shelf accuracy

Refers to end-to-end supply chain efficiency that culminates with what’s available on the store shelf. While identifying on-shelf availability is critical to keeping shoppers satisfied, retailers can’t rely on point-of-sale data alone to understand inventory levels. Shelf accuracy is impacted by any number of events that happen along the way, which is why it’s important retailers have AI-driven, real-time insights to provide a holistic view of inventory.

—Patty McDonald
Global Solution Marketing Director
Symphony RetailAI

Supply Chain Surface Areas

These are the sum of all the products, processes, and networks that compose the supply chain and represent touchpoints that can be affected by risk events, according to Gartner, Inc.

“Chief supply chain officers should reduce the surface areas of their supply chains by simplifying processes, reducing movement within their supply chains, and reducing the number of sites and suppliers that compose their networks. With a higher cadence of risk event, a smaller surface area is an asset, a large surface a major liability.”

—Suzie Petrusic
Director, Research, Supply Chain Practice
Gartner

What’s the difference between logistics and supply chain?

Logistics can be described as the legs of the overarching supply chain body. Running is good, but running at the right speed in the right direction at the right time is what makes a great supply chain.

—Christina Vali
Director of Client Solutions
Tecsys

Supply chain encompasses the end-to-end process; logistics executes the plan. Here’s an analogy: In chess, the supply chain includes finding a partner, scheduling the game, securing the gameboard, and planning your opening move. Logistics entails the physical movement of pieces to win. Logistics without the view of the supply chain is a loss.

—Jeremy Tancredi
Partner, Operations Excellence/Supply Chain
West Monroe

Think of a rideshare app. The app itself is the supply chain. It processes requests, sources drivers, plans trips, and ensures riders arrive at their destinations. The driver physically moves the rider from point A to point B. That’s logistics.

—Sam Lurye
CEO and Founder
Kargo