Resource Evaluation and Planning at Local Distribution Centre of a Beverage Company

Abstract

For large manufacturing companies with distribution centers scattered all over the country, operational efficiency in terms of resource usages can vary dramatically from place to place. It is crucial for the company to understand the causes that lead to the efficiency discripancies and fix all those causes as much as possible so it will stay competitive in the industry. This reseach focuses on a very large beverage manufacturing company with tens of distribution centers in Thailand. In particular, a distribution center in Buriram province is chosen as the case study. The objective of the study is to identify the most cost effective mix of company’s resource usages and the level of outsourcing services that at least maintains the customer service level. The solution methods developed for Buriram distribution center can eventually be applied to all other company’s distribution centers. The collected data in 3 months period showed that the customer consumption has high volatility (mean 210, SD.122.51) and the utilization of fork lift is 3.8 hours per day in average. Simulation models were developed for the experiments testing the distribution center’s resource usages, level of outsourcing services, total cost, and its performance in terms of delivery throughput. It was found that with the optimal mix of distribution center’s resource usages and level of outsourcing services, the total cost of the two components can be reduced by about 600,000 Baht over the 3-month study period, while the delivery throughput remained the same.