Distribution vs Logistics Explained: What are the Main Differences?

keyKey Takeaways:
  • Understanding the differences between distribution and logistics is crucial for businesses to optimize their supply chain operation.
  • The primary objective of distribution logistics is to deliver the right products to the right customers at the right time.
  • There are different types of logistics and distribution that are commonly used in different industries.

Distribution and logistics are both crucial components of supply chain management, however, these two terms should not be used interchangeably. While they both deal with the entire process of transporting goods in the supply chain, their meanings are quite different.

Pitting against each other distribution vs logistics is an amazing way to learn their true meanings and differences. To optimize supply chain operations, cut costs, and raise customer satisfaction, businesses must understand the distinctions between logistics and distribution.

In this blog, we will deliver a comprehensive explanation of the meaning behind the terms and their differences to help you understand them. We will also look at some of the meanings and differences of logistics and distribution that are commonly used in the industry.

What is Distribution Logistics?

Distribution logistics deals with the processes and actions involved in getting products or commodities from a manufacturer or supplier to the end user. It covers a range of supply chain activities, including delivery, order fulfillment, inventory administration, and transportation.

Making sure that the right products are delivered to the right customers at the right time and for the least amount of money feasible is the primary objective of distribution logistics. The distribution management team works to implement methods to achieve this goal.

Companies must use effective transportation methods, shorten lead times, improve inventory management, and use technology to monitor shipments and streamline processes in order to optimize their logistics operations.

Distribution vs Logistics: The Main Differences 

The primary difference between distribution and logistics mostly lies in the scope of its operations, despite them both being a part of the supply chain management process. To understand what that means, let us look at the definitions of the terms before moving on to the differences that separate their meanings. 

What do you mean by Logistics?

The efficient flow of products, services, and information from the point of origin to the point of consumption is what logistics refers to as the process of planning, implementing, and controlling. Logistics management entails managing intricate supply chains that span several phases, including order fulfillment, inventory management, transportation, and warehousing.

Many businesses, especially those in the manufacturing, retail, and e-commerce sectors, depend on efficient logistics to be successful. Businesses can increase customer satisfaction, cut costs, and obtain a competitive edge in the market by optimizing the logistics process.

What do you mean by Distribution?

The process of obtaining goods or services from a producer or supplier to the final customer is referred to as distribution. In order to make sure that products are accessible to customers when and where they need them, it is essential that various activities and entities be coordinated as part of the supply chain management process.

To ensure that goods are accessible to customers when and where they need them, effective distribution management requires careful planning and inventory control. In order to optimize the distribution process, increase efficiency, and cut expenses, this frequently demands sophisticated distribution centers.

Difference between distribution and logistics

One of the fastest ways to distinguish any two entities is by using a table that highlights and compares the ways in which they are different. The below-given table does exactly this by showing you all the key differences between distribution and logistics.

Main differences Distribution Logistics
Definition Transporting products from manufacturers to customers Effective transportation of goods throughout the supply chain
Associated Costs Warehousing, labor, inventory, transportation Procurement, warehousing, transportation, fulfillment
Technologies used Warehouse management software, transportation management tools Resource planning systems, Route planners, supply chain visibility tools
Primary responsibility Ensure adequate function of distribution channels Making the process of shipping goods as efficient and affordable as possible
Challenges faced Maintaining inventory levels, lowering storage and transportation costs Weather conditions, optimizing logistical processes

Several Types of Distribution and Logistics Used in Different Industries

Chances are, you have probably heard the terms logistics and distribution be combined with other words often in different industries. Such a combination of terms is usually used to specify the type of logistics or distribution that is being conducted. 

1. Green logistics

Green logistics is used to refer to the process of conducting logistics services in the most sustainable method possible to reduce its effects on climate change. The primary method of achieving this goal seems to be reducing the reliance on and consumption of fossil fuels to power logistics.

2. Reverse logistics

The management of materials and products returning from the consumer or point of production to the manufacturer or point of origin for recycling, disposal, or value recovery is known as reverse logistics. The most popular example of reverse logistics is the processing of returned goods purchased from e-commerce websites.

3. Inbound and outbound logistics 

Outbound logistics concentrates on managing the movement of finished products, goods, or materials to the end customer. Whereas inbound logistics manages the movement of raw materials, supplies, and other inputs into the organization. In short, these two inbound and outbound logistics are quite different from each other.

4. Intensive distribution 

An organization that uses intensive distribution aims to have as many outlets as possible to sell its goods, including convenience stores, pharmacies, and grocery stores, among others. Making the products simple for customers to access and purchase. A business must typically collaborate with a sizable network of distributors and retailers in order to execute an intensive distribution strategy. 

5. Direct and Indirect distribution

Distribution channels function in one of two ways and they are direct or indirect in nature. A direct distribution channel is where the manufacturer is responsible for selling the product straight to the customer along with the warehousing and transportation functions. Whereas in an indirect distribution channel, goods have to go through multiple entities such as the distributor, wholesaler, and retailer before getting to the customer.

6. Selective distribution 

The intention with a selective distribution system is to limit the availability of the products to particular locations that satisfy certain requirements, such as having a high-end reputation or a certain degree of expertise. A business following this distribution system typically creates a network of authorized retailers or distributors who meet certain requirements. 

Streamline Your Supply Chain Operations Using Upper-made Optimized Routes

Route planning is a crucial part of supply chain operations for companies that depend on transportation to move products from one place to another. Upper route planners aid companies in streamlining their delivery routes to lower expenses, increase productivity, and improve service. 

Businesses can find the best delivery routes by using a route planner like Upper, which performs route optimization considering multiple variables like traffic, weather and avoidance zones. Also, it includes stop priority, driver preferences, and break times that may interfere with the route plan.

The ability to reduce journey distances and fuel consumption is one of the main advantages of using a route planner for business. Businesses can lower their carbon footprint and advance their sustainability objectives by optimizing delivery routes.

Blaze Past the Competition Using Optimized Routes

Eliminate the chances of facing any delivery delays or route inefficiencies by following efficient routes. Grab Upper to automate the tedious process of route planning.

FAQs

The use of technology like artificial intelligence (AI) and machine learning (ML) to improve distribution and logistics operations is ramping up. In order to help companies optimize their logistics and distribution processes, AI and ML can be used to analyze vast amounts of data from a variety of sources, such as weather, traffic, and customer demand.

Distribution management refers to managing the physical movement of goods from the manufacturer to the customer. Coordinating transportation, storage, inventory control, and order fulfillment are just a few of the activities that go into the distribution process

Inventory management in logistics entails controlling the flow of products from suppliers to warehouses to satisfy customer demand with the right products available at the right moment. Inventory management in distribution entails controlling the flow of finished goods from warehouses to customers, ensuring that orders are filled promptly and as cheaply as possible.

Conclusion

It is obvious why every individual would know the exact difference between logistics and distribution as they deal with similar processes and serve similar functions. To grasp the meaning of such technical terms, one must fully understand their workings and objectives.

Once you have understood the exact meaning of these two terms you have greater clarity when managing operations. This can be highly beneficial for those that deal with a lot of paperwork that mentions these terms as it can alleviate all your concerns. 

Speaking of alleviating concerns, you can also alleviate your concerns regarding route efficiency by using the flawless routes generated by Upper within a minute. It is high time to try the brilliant features and convenience granted by yourself using our 7 days free trial.

Author Bio
Rakesh Patel
Rakesh Patel

Rakesh Patel, author of two defining books on reverse geotagging, is a trusted authority in routing and logistics. His innovative solutions at Upper Route Planner have simplified logistics for businesses across the board. A thought leader in the field, Rakesh's insights are shaping the future of modern-day logistics, making him your go-to expert for all things route optimization. Read more.