ABSTRACT

This study was conducted on “The Effects of Physical Distribution on Warehouse Management; The Case of African Global Logistics Douala Cameroon”, with main focus on to investigating the effects of physical distribution on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon. The study had as specific objective to explore the impact of order processing on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon, to conduct an inquiry on the effects of transportation on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon, and to find out the influence of inventory control on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon. In order to accomplish these objectives, the study employed the mixed-methods approach, combining both quantitative and qualitative data collection and analysis methods. The made use of manly the primary data collected from he case study area by the use of data collection techniques such as survey questionnaires, interviews and observations. The study found that, Survey results indicate a significant consensus (53.3%) among respondents that AGL’s current order processing systems effectively address the unique challenges faced by warehouse management in the African logistics landscape. This suggests that the systems are perceived to be adaptive and capable of managing the specific complexities inherent in logistics operations in Africa. Also, the study noted efficient transportation’s contribution to improving supply chain visibility and control did not show a statistically significant impact on ensuring timely inventory replenishment, as indicated by regression and coefficient analyses. Furthermore, the study found that, the mean score for “Inventory control ensures timely replenishment” is 1.93 with a standard deviation of 1.048, indicating general agreement among respondents with some variability in their opinions. The researcher concludes that, while the study provides valuable insights into warehouse management practices at AGL in Cameroon, it highlights the need for continuous evaluation and refinement of strategies to align operational practices with organizational goals effectively. Addressing the variability in perceptions and optimizing the integration of transportation and inventory control strategies are crucial steps for AGL to enhance its warehouse management capabilities and maintain competitive advantage in the dynamic logistics landscape of the region. The study made recommendations and suggested areas for further studies.

Keywords: Physical Distribution, warehouse management

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

Physical distribution is a critical aspect of supply chain management that involves the movement and management of goods from the point of production to the point of consumption. It encompasses various activities such as transportation, warehousing, inventory management, packaging, and order fulfillment. Warehouse management, on the other hand, refers to the efficient and effective control of storage facilities to ensure the smooth flow of goods through the supply chain (Londe, 1969). The concept of physical distribution and warehouse management has evolved over time in response to changing market dynamics, technological advancements, and the need for efficient and cost-effective operations (Berg & Zijm, 1999).

The history of physical distribution can be traced back to the early days of commerce when merchants needed to transport their goods to distant markets (Mentzer et al., 1989). They relied on various means of transportation such as cart, horse-drawn carriages, and boats to move their products. As trade and commerce expanded, the need for organized and efficient transportation systems became apparent (Bowersox, 1969). During the Industrial Revolution, advancements in transportation infrastructure, such as the development of railways and steamships, revolutionized physical distribution by enabling large-scale movement of goods over long distances. This led to the establishment of warehouses and distribution centers to store and distribute goods more efficiently.

Companies today are placing greater emphasis on logistics for purposes of achieving customer satisfaction (Odera, 2012). To succeed in an uncertain and competitive environment, firms must respond to changing customer needs faster than before, and physical distribution is an important part of this response. Physical distribution is the transporting, storing and handling of goods to match customer’s needs, Kotler (2005). According to Boon and Kurtz (2003), physical distribution is an organized group of components linked according to a plan for achieving specific objectives with the components of effective warehouse management, transportation, inventory control that is how much inventory a firm should maintain at each location, protective packaging and material handling that is how the firm can efficiently handle goods in the factory, warehouse and transport terminals, order processing, warehousing that is where the distribution system will locate stock of goods, the number of warehouses the firm should maintain.

Physical distribution has been defined as a term employed in manufacturing and commerce to describe the broad range of activities concerned with efficient movement of finished products from the end of production line to the consumer. However, the warehouse is the other aspect in the supply chain that determines greatly the smoothness of the supply of goods from the producer to the consumer.  

The Council of Logistics Management defined physical distribution as
“Physical distribution is that part of the supply chain process that plans, implements, and controls the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption in order to meet customers; requirements.” (Council of Logistics Management, 1991).  Physical distribution encompasses the activities associated with the efficient movement of finished goods from the end of the production line to the consumer.” (Heskett, 1972).

The particular path in which the goods move through distribution centers, wholesalers, and retailers is called the channel of distribution. A channel of distribution is one or more companies or individuals who participate in the flow of goods and/or services from the producer to the final user or consumer. Warehouse depends on the physical distribution system to receive stock and disburses to the final consumers. An effective physical distribution reflects on warehouse management directly.

The concept of physical distribution and warehouse management is based on the idea that effective management of these activities can lead to improved customer service, cost savings, and competitive advantage (Stephenson & Willett, 1968). The main purpose of physical distribution is to ensure that the right products are delivered to the right place at the right time and in the right condition (Mentzer et al., 1989). This involves coordinating various activities such as transportation, inventory management, order processing, and packaging to meet customer demands and expectations.

The service functions performed by warehouses can be classified into two kinds: firstly, general warehouse, where goods are stored for long periods and where the prime purpose is to protect goods until they are needed. Secondly, the distribution warehouse, with a dynamic purpose of movement and mixing. The emphasis is on movement and handling rather than storage. The size of the warehouse is not so much its physical size as it is the throughput, or volume of traffic handled. Items should be warehoused only if there is an offsetting benefit gained from storing them. Warehouses serve three important roles: Storage, consolidation, order fulfillment and  value Added services.

The theoretical framework for physical distribution and warehouse management is built upon different concepts and principles. These include the four economic utilities – form, time, place, and possession utilities. Form utility refers to the process of converting raw materials into finished products, which is traditionally the responsibility of the production function. Time utility refers to the availability of goods when customers need them, which is achieved through effective planning and coordination of transportation and inventory management activities. Place utility refers to the availability of products at the desired location for customers, which is achieved through efficient distribution networks and strategic placement of warehouses and distribution centers (Stephenson & Willett, 1968). Possession utility refers to the ability of customers to easily acquire and own products, which is facilitated by effective marketing and sales efforts (Mentzer et al., 1989; Maister, 1977)

Also, the warehouse managers can also sort aside goods to return to the manufacturing industry for reason such as product expiry, costumer change of taste, invention of a new product design, and so on. The warehouse managers depend on the quick entry and exit of products. Logistic systems do well represent a potential source of improved efficiency in warehouse management (Barad and. Sapir, 2003)

In a global scenario, not only manufacturing, but also logistics can be an important source of competitive advantage, since material flows strongly affect business performance. Different logistics channels of the supply chain can be activated in order to face emergencies such as demand peaks.

In recent years, there has been a growing recognition of the importance of physical distribution and warehouse management in optimizing supply chain performance. Organizations have realized that effective management of these areas can lead to improved customer service, reduced costs, enhanced operational efficiency, and increased market share.

However, logistics companies, including Africa Global Logistics (AGL) in Douala, Cameroon, face numerous challenges in their warehouse management practices. These challenges can have significant implications for the overall efficiency and effectiveness of physical distribution. Understanding the effects of physical distribution on warehouse management is crucial for identifying and addressing these challenges. Research has highlighted the impact of order processing, transportation, and inventory control on warehouse management. Delayed order processing can result in increased lead times, customer dissatisfaction, and potential revenue loss (Grawe et al., 2017). Transportation delays and inaccurate delivery schedules can disrupt the overall flow of materials within the warehouse, leading to congestion and hindering order fulfillment (Laudon & Laudon, 2016). Inadequate inventory control practices, such as inaccurate inventory records and poor stock rotation, can result in stockouts, overstocking, and inefficiencies in warehouse operations (Mangan et al., 2016).

To address these challenges and improve warehouse management practices, it is crucial to gain a deeper understanding of the effects of physical distribution on warehouse operations. By conducting a comprehensive study on this topic, valuable insights and recommendations can be provided to logistics companies like AGL, enabling them to optimize their warehouse management practices and enhance overall supply chain performance.

This research project aims to contribute to the existing body of knowledge by investigating the effects of physical distribution on warehouse management, specifically focusing on AGL in Douala, Cameroon. By identifying the specific problems related to order processing, transportation, and inventory control, this study will provide insights into the challenges faced by AGL and offer recommendations for improving warehouse operations. The findings of this study can have implications not only for AGL but also for logistics companies globally, providing best practices and strategies for enhancing warehouse management and optimizing physical distribution.

1.2 Statement of the Research Problem

The efficient management of warehouse operations is crucial for logistics companies like Africa Global Logistics (AGL) in Douala, Cameroon. However, AGL  faces significant challenges in their warehouse management practices, particularly in the areas of order processing, transportation, and inventory control. This research project aims to investigate the specific problems related to these aspects of physical distribution and identify their impact on AGL warehouse management practices. AGL’s order processing system faces several issues that hinder efficient warehouse management. These problems include Delayed Order Processing, Order Errors and Lack of Order Visibility.

Furthermore, transportation activities associated with physical distribution has a significant impact on AGL’s warehouse management and some of the problems include; Transportation Delays, Inaccurate Delivery Schedules and Inadequate Communication. On the other hand, Efficient inventory control is vital for effective warehouse management. However, AGL encounters  some problems which consist of Inaccurate Inventory Records, Poor Stock Rotation and Inefficient Replenishment Processes.

Addressing these problems related to order processing, transportation, and inventory control is critical for AGL to optimize their warehouse management practices. By investigating the effects of physical distribution on warehouse management and identifying these specific problems, this research project aims to provide insights and recommendations to AGL, enabling them to overcome these challenges and enhance their overall warehouse operations.

1.3 Research Questions

1.3.1 Main Research Question

What are the effects of physical distribution on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon?

1.3.2 Specific Research Questions

Our research questions are:

• What is the impact of order processing on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon?
• What are the effects of transportation on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon?
• What are the effects of inventory control on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon?

1.4 Research Objective

1.4.1 Main Research Objectives

The main research objective of the study is to investigate the effects of physical distribution on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon.

1.4.2 Specific Research Objectives

In this part of the work, the specific research objectives are proposed, which are:

• To explore the impact of order processing on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon.
• To conduct an inquiry on the effects of transportation on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon?
• To find out the influence of inventory control on warehouse management in Africa Global Logistics, Douala Littoral Region Cameroon.

1.5 Research Hypothesis

1.5.1 Main Research Hypothesis

Ho: Physical distribution has no real relationship with warehouse management

1.5.2 Specific Research Hypothesis

This part of the work proposes the specific research hypotheses, which are:

1. Ho1: Order processing has no significant impact on warehouse management.

Ha1: Oder processing has a significant impact on warehouse management.

2. Ho2: There is no real impact of transportation on warehouse management.

Ha2: There is a real impact of transportation on warehouse management.

3. Ho3: Inventory control has no significant influence on warehouse management.

Ha3: Inventory control has a significant influence on warehouse management.