An examination of logistics performance indicators in FMCG distribution: A study of Shoprite in Kwara State.
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- NGN 5000
Background of the study
Logistics performance is a crucial determinant of success in the Fast-Moving Consumer Goods (FMCG) sector, where companies face intense competition, low margins, and a need for efficient and responsive supply chains (Khan et al., 2024). FMCG companies like Shoprite operate in a highly dynamic environment where the rapid movement of goods from suppliers to retailers is essential to maintaining stock availability and satisfying consumer demand. Key logistics performance indicators (LPIs), including delivery time, cost efficiency, inventory turnover, and customer satisfaction, are critical for assessing the efficiency and effectiveness of logistics operations in FMCG distribution (Leuschner et al., 2023).
Shoprite, as one of Nigeria's leading retailers, has developed a sophisticated logistics network to meet the demands of the FMCG market. Kwara State, with its expanding retail market, provides an interesting case study for examining Shoprite’s logistics performance in terms of distribution efficiency, product availability, and cost control. The company’s ability to track and optimize logistics performance indicators directly impacts its bottom line and customer satisfaction.
This study will explore how Shoprite utilizes logistics performance indicators in managing its FMCG distribution network in Kwara State, focusing on the company’s strategies for improving logistics efficiency and meeting consumer expectations.
Statement of the problem
In the FMCG sector, effective logistics management is critical for ensuring that products are available to consumers at the right time and place. Shoprite, despite its significant market presence, faces challenges in optimizing its logistics performance indicators in Kwara State. Factors such as distribution costs, inventory management, and delivery reliability can influence the company’s ability to meet customer demand efficiently. The impact of logistics performance indicators on Shoprite's FMCG distribution operations in Kwara State has not been extensively studied, and understanding these indicators' role in enhancing operational efficiency is crucial for improving service levels and reducing costs.
Objectives of the study
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To evaluate the logistics performance indicators used by Shoprite in FMCG distribution in Kwara State.
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To assess the impact of logistics performance indicators on the efficiency of Shoprite's FMCG distribution operations in Kwara State.
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To identify the challenges Shoprite faces in optimizing logistics performance indicators for FMCG distribution in Kwara State.
Research questions
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What logistics performance indicators are used by Shoprite in FMCG distribution in Kwara State?
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How do logistics performance indicators impact the efficiency of Shoprite's FMCG distribution operations in Kwara State?
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What challenges does Shoprite face in optimizing logistics performance indicators for FMCG distribution in Kwara State?
Research hypotheses
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The logistics performance indicators used by Shoprite significantly impact the efficiency of FMCG distribution in Kwara State.
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Shoprite’s logistics performance indicators have a positive impact on customer satisfaction and product availability in Kwara State.
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Shoprite faces significant challenges in optimizing logistics performance indicators for FMCG distribution due to factors such as infrastructure and demand variability in Kwara State.
Scope and limitations of the study
This study will focus on Shoprite's FMCG distribution operations in Kwara State, evaluating how logistics performance indicators affect supply chain efficiency and customer satisfaction. Data will be collected through interviews with supply chain managers, logistics staff, and surveys of customers. The study’s limitations include potential biases in customer surveys and the scope limitation to Kwara State, which may not fully represent Shoprite's broader distribution network.
Definitions of terms
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Logistics performance indicators (LPIs): Quantitative metrics used to measure the effectiveness and efficiency of logistics operations, such as delivery times, cost per unit, and customer satisfaction.
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FMCG distribution: The process of moving fast-moving consumer goods from suppliers to retailers, ensuring product availability at the right time and place.
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Inventory turnover: A measure of how quickly inventory is sold and replaced within a given period, used to assess the efficiency of inventory management.
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