Role of Digitalization in Improving the Logistics Distribution Performance

Abstract: Fast-moving consumer goods (FMCG) touch every individual’s life in one way; these goods are characterized by thin margins and require seamless distribution. The development and capacity of completed wares from the place of assembling to the client is alluded to as physical distribution. The challenge for management is to ensure improved logistics distribution. With the advent of digital technology, many tools are designed to capture the data and gauge the inefficiencies in distribution. The logistics performance of fast-moving consumer goods (FMCG) is highly reliant on transportation and warehouse performance and this can be improved through digitalization. This paper studies the distribution of fast-moving consumer goods and tries to identify the inefficiencies in transportation and warehousing operations. The factors leading to inefficiencies in transportation and warehouse performance are identified through a literature review. Five elements that have a direct impact on transport performance have been identified. Similarly, six elements were identified that directly impact the warehouse’s performance. The objective is to evaluate the effect of digitalization on coordinated operations dispersion execution. The data are collected through structured questionnaires from 256 managers and executives employed in the FMCG sector. The data are analyzed through Structural equation modeling (SEM) with AMOS. The conceptual model is formulated, and hypotheses are tested based on the model.

Keywords: Distribution Performance, Transportation, Warehousing, Digitalization, Structural Equation Modeling (SEM)