Improving the Strategic Distribution Performance of the Supply Chain of a Leading FMCG Company: A Case Study

Fast moving consumable goods require good supply chain operation. In this paper, a leading Egyptian FMCG is considered. The company wants to optimize its distribution network design considering several supply chain strategic objectives. The company wants to determine the number of warehouses to build, their sizes, customers assigned to each warehouse, and their layout. The objective is to reduce the distribution cost taking into consideration the company's strategic decision such as giving higher priority to important customers and assigning the nearest warehouse to each customer, and also the real live applicability of the suggested solution. We first segment the customer according to different strategic factors. Then a non-linear model is proposed for solving the problem. A hybrid heuristic is proposed that solves the problem by iterating between the optimal suggested location and the possible locations available for business in the real life according to availability and other strategic factors. Different layouts for the selected locations are evaluated using Monte-Carlo Simulation.