K, Fmcg City Distribution

Logistics, as one essential part of international trading, has been playing an increasingly important role in economic activity. City distribution, also known as the "Last Mile" freight movement, is vital to efficiency, effectiveness and cost reduction of the complete logistics system. Thus it has become a hotspot research topic in logistic studies.China's logistics industry has undergone tremendous development along with China's rapid economic growth and globalization. At the same time, there still exist many challenges and problems in the light of ever-increasing economic demands and always-intense competition from international enterprises. City distribution, which is to deliver goods or service to designated location on a timely manner in urban area, has to cope with specific city traffic congestion, variety of customer needs while maintaining flexibility and quality, is a relatively new world and therefore a problem to be solved in modern logistics management. Because of its uniqueness, market of city distribution has not been entered by international companies. Nevertheless, city distribution has been facing difficult problems that need to be addressed, which at the same time will provide promising growth potential for local logistics companies to enhance their core competency by tackling these problems.This thesis is focused on fast moving consumer goods distribution in city distribution. Fast Moving Consumer Goods, FMCGs, as a special kind of commodities, are products that are highly standardized with a low profit margin and constitute a large part of daily consumption. The distribution of these goods requires the city distribution network to be able to frequently deliver a variety of low volume goods instantly. Therefore, how to improve efficiency and reduce cost of city distribution for FMCGs is an imminent question that needs focused attention. Theoretical and empirical studies of present status of city distribution will be beneficiary in providing useful guidance to general practices.In this thesis an empirical approach is utilized in analysis of K Company's practice of city distribution for FMCGs. During this case study, generalized guidance is summarized to provide future references. Combined with latest development in modern logistics and present status quo of relevant industry, it can provide small- or medium-sized companies an enhanced solution of city distribution for FMCGs.This thesis is divided into five chapters: Chapter 1 includes research background, literature review and framework of the rest of the thesis; Chapter 2 introduces city distribution and related theories, as well as general practices adopted by local or foreign enterprises; Chapter 3 contains the case study of K Company and the review of its practice; Chapter 4 summarizes suggestions of future development for city distribution in four directions: third-party logistics, business growth, and value-added logistics; Chapter 5 is the conclusion and future work. Being a hard problem to tackle in logistics, city distribution has current research efforts focused on how to optimize distribution routes, building GIS infrastructure, etc. However, these approaches are not applicable to many of local companies due to their high cost. For companies that adopted these approaches it has not met expectations. In this thesis, the case study of K Company's practice reveals that freight distribution within a relative small region can reach to an optimal point by creating frontier freight distribution center and taking advantage of abundant labor resources as well as modern logistics techniques. This optimal point can be maintained long-term wise by adjusting operations incrementally with respect to changing environment. This approach can eventually lead to a long-term low-cost city distribution solution that meets the business needs. It is an innovative and practical way to address the current logistics needs and will contribute to national logistics evolution.