ABSTRACT：

To counter the competition from domestic market and abroad afteraccession to World Trade Organization (WTO), many tobacco corporations arereforming and standardizing their logistics system according to China Tobacco’sdirection. In order to improve the efficiency and provide good service for thecustomers, Jiangxi Industrial Tobacco was separated from Business Tobacco in October2004. Nowadays there are five plants under China Tobacco Jiangxi Industrial Corporation (CTJIC) and there are eleven branches under Jiangxi Tobacco Corporation (JTC). This paper takesJiangxi Tobacco as an example to optimize the logistics operation betweenindustrial sector and business sector. Firstly this paper presents the statusquo of the production and distribution of Jiangxi Tobacco, whose annual outputis about one million cases and annual turnover is 1.2 million cases. Secondlythis paper analyzes the tobacco logistics system of Jiangxi industrial tobaccoand Jiangxi business tobacco respectively. Then this paper points out theproblems within these two systems. Thirdly, this paper focuses on the pallet loadingand pallet transportation betweenthese twosectors, i. e. pallet size, stacking patterns, truck selection, etc. Finally,this paper designs the pallet layout chart and linkage methods for industrialand business sector to integrate these two logistics system and reduce thetotal logistics cost.  

Keywords：Tobacco logistics, Palletloading and transportation, logistics system Integration

1. Introduction

The number of the cigarette brand in Chinadecreasedfrom 1049 in 2002 to 173 at the end of 2007 owing to fierce competition andrapid integration^[1].Meanwhile, the tobaccomanufacturing factories decreased from 180 to 30. Consequently, nationaltobacco monopoly organization reform has been finished during the recent years.In most provinces, industrial corporations (industrial sector) of Chinatobacco producethe cigarettes, while business sector is responsible for the cigarettesmarketing. 

In October 2004, China Tobacco Jiangxi IndustrialCorporation (CTJIC) was set up consisting of five factories, namely NanchangTobacco Factory, Gannan Tobacco Factory, Guangfeng Tobacco Factory, JinggangshanTobacco Factory and Xingguo Tobacco Factory. As for cigarette marketing, thereare eleven municipal tobacco branch corporations in Jiangxi province. 

In order to reduce the total tobacco logisticscosts and provide good service, these two sectors decided to explore a new integrationpattern starting with pallet transportation towards the goal of “low cost, highefficiency and centralized management”.