In order to ensure on-time delivery, logistic management focusses on the effective transportation and storage of products from point of origin to destination. In contrast, channel management refers to the tactics and procedures used in supervising the channels of distribution that goods use to get to their final customers. Let's understand this topic in detail.
What is Logistic Management?
Logistic management, as name suggests, is a part of supply chain process that handles movement of right amount of product to appropriate place at given period of time. Planning, carrying out, and supervising the effective movement and storage of products, services, and information from the point of origin to the site of consumption are all part of logistic management. Its main goal is to meet consumer requests by streamlining supply chain operations, such as order fulfilment, inventory management, transportation, and warehousing.
Features of Logistic Management
- Warehousing: The organization, retrieval, and management of items in warehouses to guarantee efficient operations are the main topics of warehousing.
- Order fulfilment: It monitors the entire process, from taking an order to sending it to the customer, making sure that it is delivered on time and accurately.
- Supply Chain Coordination: In order to optimize the flow of commodities, supply chain coordination arranges for suppliers, manufacturers, and distributors among other parties.
What is Channel Management?
A company's methods and procedures for efficiently managing the several channels via which its goods and services are advertised, offered for sale, and delivered to clients are referred to as channel management. This includes selecting the best distribution partners, maintaining connections with wholesalers, retailers, and internet platforms, and making sure the product effectively reaches the intended market. The goal of channel management is to maximize reach, sales, and customer pleasure by optimizing the performance of each channel.
Features of Channel Management
- Partner Selection: Selecting the best channel partners—distributors, wholesalers, and retailers—who can successfully market and sell the product is the main goal of partner selection.
- Dispute Resolution: Formulates plans to settle disputes that can emerge between channel partners, guaranteeing seamless operations.
- Channel Coordination: Allows seamless coordination between various channel participants, promoting collaboration and reducing confrontations.
Difference between Logistic Management and Channel Management
Parameters | Logistic Management | Channel Management |
|---|---|---|
Focus | It mainly focuses management of products or raw materials and physical distribution. | It mainly focuses on management of marketing techniques along with sales strategies. |
Responsibility | Logistic manager have more responsibilities than Channel manager. | Channel manager have less responsibilities than project manager. |
Activities | Activities of logistic management includes packaging, control inventories, order processing, transportation, etc. | Activities of channel management includes understanding target market, pricing strategies, sales staff training, promotion and advertising, etc. |
Main Objective | Main objective of logistic management to efficiently and effectively manage supply chain activities and extend desired level of customer service. | Main objective of channel management is to develop and establish a better relationship among customer and business or product. |
Scope | It deals with flow within company or organization and among companies and it suppliers as well as customers. | It deals with administration of existing channels simply to secure cooperation of channels members in achieving objective of firm distribution. |
Types | Types of logistics includes sales logistics, procurement logistics, production logistics, recovery logistics, recycling logistics, etc. | Types of channels includes direct selling, dual distribution, reverse channels, etc. |
Work Complexity | Logistic manager work is more difficult than channel manager. | Channel manager work is less difficult than that of logistic manager. |
Process | Process of logistic management includes inbound logistic traffic i.e. raw materials, tool, components, equipment's, etc. and outbound logistic traffic i.e. moving final product out of warehouse inventory and meeting customer demands. | Process of channel management includes analyzing customer, establish channel objectives, specify distribution tasks, evaluate and selection, evaluating channel member performance. |
Conclusion
Channel management optimizes the routes and means by which items are delivered to the market, whereas logistic management guarantees the efficient flow of goods. Both are necessary for a smooth supply chain, but their functions within the distribution network are distinct.