Improving Raw Materials Warehouse Utilization and Efficiency in a Haircare Manufacturer

Abstract

This study aims to improve the capacity, efficiency, and utilization of raw materials warehouse in a case study of haircare manufacturer in Thailand. At the same time, it is our goal to save the storage cost of finished products at the external public warehouse by locating some of the finished products at this internal raw materials warehouse. The key methodologies used to improve the current raw materials warehouse are removing obsolete materials from the warehouse, regrouping materials according to types, sizes, and turnover rates, reallocating space for each group of materials, considering beam height adjustment, and reassigning the location for each group of materials. The results show that after these methodologies were applied, the capacity of the raw materials warehouse can be increased by 12.65%, picking distance can be reduced by 52% compared to the current situation and the utilization is more balanced throughout the warehouse. Furthermore, 324 locations are available for storing some finished products at the raw materials warehouse which can help to save cost at the external warehouse by 264,000 THB per year. In addition, implementation plans and analysis tools are created in order to navigate the case study company on how to turn improving plans as recommended in this research to actual implementation so that efficiency of warehouse can be increased.