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Role of Logistics in Supply Chain Management: A detailed study

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9th Sep, 2022
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Role of Logistics in Supply Chain Management: A detailed study

Two major and interconnected goals of companies and businesses are profit maximisation and customer satisfaction. Having satisfied and recurring customers enhances the revenue manifold and creates goodwill in the market. A classic example is Amazon, which has a retention rate of over 90%. The dynamics of the business environment is changing rapidly, and it is has become necessary for the business to adapt to the changes. Hence, they hire specialists to take care of the minor technicalities to make the process smoother, to ensure that the organisation stands true to its promises. 

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One such essential process undertaken by the company to help achieve the business objectives is Supply Chain Management.

What is Supply Chain Management?

Supply Chain Management is the process of streamlining the business activities, starting right from sourcing the raw materials, turning them into the final products and getting them delivered to the consumers on time and in perfect condition. The objective here is to bring about efficiency in every step of the process to maintain a competitive edge in the market.

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One of the essential aspects of Supply Chain Management is Logistics. 

What is Logistics in Supply Chain Management?

Logistics Management is an integral part of Supply Chain Management. It involves formulating plans and implementing strategies to ensure transportation and storage of goods on time and in the correct place. The main objective of Logistics Management is to meet consumers’ requirements on time. This involves guaranteeing proper transportation of goods according to the nature of the good, having warehousing facilities in place, and faster delivery of goods having a shorter shelf life. 

What are 7 Rs of Logistics?

1. Getting the Right Product 

The first step involves designing the product considering different factors such as problems involved in the transportation of the product, warehousing facilities to be needed, meeting the industry and safety standards specified. In addition to this, studying the market closely and using the insights to manufacture more in demand products helps save you time. 

2. Serving the Right Customers

Every product has a target market and customer base. It is necessary to evaluate the utility the target customer will get from the product and whether they will be willing to pay the price for the product. Market research is an essential key in this regard. New products can find their target audience in this way and can focus on tailoring the product according to the need of the customers. Serving the right customers increases revenue and leads to the company’s growth. 

3. Setting the Right Price

Having a great product in hand does not matter until the people are willing to pay for it. The key is to set a competitive price that covers the cost and is closer to the average market rate. Pricing is one crucial factor as it can decide the product’s fate. You need to thoroughly analyse the competitors’ prices and set your price accordingly.

4. Sending the Right Quantity

The correct quantity of products needs to be sent to ensure the demands are met. Demand forecasting is done to get a rough estimate of demand for a particular product in a specific season. Inventory management in Supply Chain Management is done to ensure the targets are always met and the products reach the customers in a stipulated time and good condition.

5. Ensuring the Right Condition of the product

The product has to be delivered to the customers in perfect condition. It is necessary to have a top-notch delivery system to ensure the perfect state of the product. The distribution strategy should ensure efficient delivery of products without increasing the costs.

6. Making delivery at the Right Time

Making the delivery at the right time and fulfilling the promise to the customers should be the company’s top priority. To survive in the cut-throat competition, providing timely service is the bare minimum a firm can do to make timely delivery. Managers use tracking systems and coordinate with the delivery team to ensuring timely product delivery.

7. Delivering it at the Right Place

When a plethora of deliveries need to be made, chances of mistakes arise on the delivery level. This is another important aspect where the company can earn customers’ trust and stand out among the competitors. The correct deliveries save time, effort and earn consumer goodwill. 

How can you become a Supply Chain Manager?

Supply Chain Management offers a plethora of opportunities due to its dynamic and analytical nature. The steps to becoming a Supply Chain Manager are given below.

Getting a Bachelor’s degree

Getting a Bachelor’s degree in Supply Chain or other related fields such as Business, Finance, etc., is the first step. It sets up the foundation for the future course of action.

Gaining work experience

To dive further into this field, you need to have relevant work experience in many subsections of the supply chain, such as inventory management, business operations, to name a few.

Getting a Master’s degree

Although it is not necessary to get a Master’s degree, it certainly can act as a significant plus point in your resume. Your knowledge of the subject will enhance even more, which would help you get jobs in reputed companies. 

If you are willing to venture into Supply Chain Management, you can check out Global Master Certificate in Integrated Supply Chain Management by Michigan State University in collaboration with upGrad. The No 1 ranked Supply Chain Graduate Degree by US News and World Report is a great way to gain knowledge and build expertise in the field of the supply chain. You will get access to live faculty interaction, interactive discussion, quizzes and assignments and can learn from the best. A strong peer network keeps you motivated throughout the journey.


Supply Chain Management is undoubtedly one of the fastest-growing areas in recent years. Global Supply Chain Management was valued at $15.85 billion in 2019 and is expected to have a valuation of $37.41 billion by 2027. This calculates to 11.2% CAGR growth from 2020 to 2027.  The advent of the internet and online-based shopping have contributed explicitly to its exponential growth. The employment opportunities are also growing with this exponential increase. The field of the supply chain provides ample career opportunities with professional career growth possibilities and handsome compensation.

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Sandeep Pereira

Blog Author
Responsible for working with the various teams and other management to establish long-range goals, strategies, plans and policies and set up new programs at upGrad. With a demonstrated history of working in the EdTech industry.
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Frequently Asked Questions (FAQs)

1What is the salary of Supply Chain Managers?

The field of supply chain management is a fast-growing one. Due to a steep learning curve and excellent monetary compensation, the supply chain managers earn, on average, around INR 12.41 LPA.

2What are the companies which hire Supply Chain Managers?

Many companies are hiring supply chain managers to make use of their expertise in the field. Some of the big names hire for the role of supply chain managers are Mahindra, Johnson & Johnson, TCS, Capgemini, to name a few.

3What are the different jobs available in the field of Supply Chain Management?

The arena of supply chain management is vast. There are many job roles available in Supply Chain Management, such as Purchase Manager, Strategic Planner, Supply Chain Manager, etc.