Distribution Centre Location and Organisation for Competitive Advantage MODUL Service AB in China

Abstract

To have a cost–efficient distribution channel is of great importance for any commercial corporation to run business effectively, whether it is conducted globally or in certain regions. In the process of distribution, both physical transportation and warehousing operations are critical, which need to mesh with other logistical operations.

This thesis deals with the operative distribution issue at MODUL Service AB, a subsidiary company of IKEA Group. Following the rapid expansion in the Far East, MODUL Service AB has encountered a number of distributing problems with the symptoms of high transport cost and poor controllability of the shipment.

In order to be able to sustain the competitive advantage, the operational management of MODUL Service AB has decided to improve their distribution performance in the Far East from a logistics perspective. The improvement could be achieved through streamlining the distribution channel in China. Therefore, the thesis will discuss the issues regarding distribution performance and its possible improvement in China.

Besides, the design of a research model with the guiding principles is applicable to practitioners in order for them to develop or improve existing or forthcoming facility configuration networks in reality.