LOGISTICS OPTIMIZATION AND DISTRIBUTION EFFICIENCY OF FAST-MOVING CONSUMER GOODS (FMCG) DISTRIBUTORS IN RIVERS STATE

Abstract

The challenge of achieving distribution efficiency and improving relative market position has been a perennial one for firms; and different strategy options have been experimented to tackle this problem. In the current examen, we probed the nexus between logistics optimization and distribution efficiency. The study took a mono-dimensional view of logistics optimization, and proxied distribution efficiency with optimal resource utilization, waste reduction and cost reduction. 12 fast moving consumer goods (FMCG) distributors in Rivers State constituted the population of the study; and a sample of the universe was taken. Primary data was collected from 3 management level (customer service, operations and logistics manager) staff of each firm, using a 5-point Likert scale multiple-choice questionnaire. The questionnaire was tested for reliability and validity using Cronbach’s alpha test and exploratory factor analysis, respectively. To analyse the direction and magnitude of connection between logistics optimization and proxies of distribution efficiency, Spearman’s Rank Order correlation was used. The Statistical Package for Social Sciences (SPSS) version 24.0 aided the analyses. The analyses revealed that logistics optimization has strong positive correlation with optimal resource utilization, a strong positive link with waste reduction and a very strong positive nexus with cost reduction. In addition, the analyses revealed that logistics optimization has statistically significant association with all the indices of distribution efficiency. The study therefore concludes that logistics optimization informs distribution efficiency; and recommends that FMCG distributors in Rivers State that seek improved distribution efficiency should invest in technology and structures that provide fillip for logistics optimization.