Businesses like yours often rely on services like third party logistics to ensure smooth and effective goods delivery. However, many businesses get procurement and logistics confused, which is understandable. After all, according to the Bureau of Labor Statistics, the US alone has over five million warehousing and transportation employees working in these fields. Thankfully, we can help you understand these differing services.
What is Procurement?
Procurement refers to buying or acquiring goods or services from a different business. This step may include bidding or tendering, which is buying the items directly from a provider. Much of the US market relies heavily on comprehensive procurement systems to move and distribute these items.
For example, if you’re a retailer and need goods for your store, procurement focuses on buying these items. You may set up recurring payments for products like food, clothing, and anything else you sell. Typically, you’ll work directly with manufacturers to buy these goods.
That said, you may also work with third party logistics firms to create an effective supply chain system. That’s because logistics, while different from procurement, is directly connected to it. If you need clarification, read the section below or contact us today to get help with your product management needs.
How Does Logistics Differ From Procurement?
Logistics refers to the process of planning and transporting goods, materials, and other products throughout your supply chain. For example, logistics companies can plan product delivery to your firm. They can also help you when shipping any goods to your customers when they need them.
A logistics team will work with your procurement and selling departments to create an efficient system. These steps include planning specific shipping options like truck, air, and rail freight. In this way, you can get your goods where they need to be.
However, logistics firms also plan where to send goods and connect directly with buyers and manufacturers to streamline your planning. They also ensure that you have raw manufacturing materials when needed. Without logistics, the supply chain would collapse.
The vast importance of logistical planning makes finding a third party logistics team critical for your firm. If you need help with your supply chain, please don’t hesitate to contact us today. Our team of professionals will ensure you get the high-quality service you deserve. We look forward to helping you better manage your procurement and logistics planning.
Posted March 6, 2023
