Facility Location Optimization Based On Logistic Outsourcing Mode

Along with the industry structure change policy as well as the urbanization progress in China,government in different regions and cities,have been tightening the demand for logistic usage land,especially in Shanghai and its satellites cities.Together with intensive competition among major express forwarder,and e-Commerce giants in China,factors from both supply and demand perspectives,push up logistic cost higher and higher,which force manufactures of industry product and consumer electronics to re-evaluate their logistic cost.For most manufactures,logistic management is off their core advantage competitiveness and is contracting with 3^rd party logistic service providers（LSP）to manage its supply chain,and fulfill logistic demands in transportation as well as in warehousing management.Therefore,this study looks from the perspective of manufactures,use a case study of company B,to advice a way for manufacture to re-evaluate their supplier chain layout,considering both quantities and qualitative matters.The main research work of this paper consists of three parts as follows.（1）First part describes the global supply chain network of company B,and the function as well as strategic position of the national distribution center（NDC）in China lies.Further on,from aspects of the market developing trend in China,the fast soaring e-Commerce has dramatically change the order structure of company B,which requires faster and higher frequency of orders.Plus the rising local competitors,who challenge company B largely especially on price and cost wise.Comprehensively,it proves the urge that company B has to re-evaluate and optimize their NDC location.With the logistic cost keep increasing in Yangzi River Delta region,it is a must for company B to re-evaluate it NDC location.（2）Second part of this study analyze the major factors,lead time,transportation cost as well as warehouse,and their influencing factors in the location decision of NDC,in a background that logistic management outsourcing mode with LSPs.（3）Last part of the study,combine gravity center method as well as analytic hierarchy process（AHP）to propose the optimal location of NDC.Taking the historical transportation data,and location of supply and demand as input,gravity center method advice the radiation of potential NDC locations.By setting up 4 target layers,and further 12 sub criterial layer,analytic hierarchy process（AHP）suggests the best warehouse location.National Distribution Center warehouse is a core intersection in the logistic network of Company B in China,and further in the globe,which serves various functions.As a result,its location decision has a significant impact on the overall logics of company,from both cost perspective and quality perspective.This paper takes company B as a case,aiming to provide a reference to companies which using 3rd party logistic provider（LSP）s outsourcing service,with a scientific way and data oriented decision making on warehouse location.