IMPROVING EFFICIENCY THROUGH WASTE REDUCTION IN INVENTORY MANAGEMENT PROCESSES THE CASE STUDY OF THE AUTOMOTIVE SPARE PARTS BUSINESS IN KHON KAEN PROVINCE

Abstract

             Inefficient inventory management processes result in waste, including errors in physical inventory, higher cost, and time delay. This research aims to measure efficiency in the inventory management processes, which mean errors in physical inventory, spare part storage cost, and spare part searching time. This research also proposes that there should be efficiency improvement through the waste reduction in inventory management processes. Data collection from 16 key informants was conducted through participatory observation, in-depth interviews, and group discussions. Data analysis is carried out using data error rates for physical inventory, sunk cost calculation, and time averages, including Why-Why Analysis. The results showed that when measuring the data error rate, the physical inventory waste reached 46.23 percent. Likewise, the cost waste in spare part storage reached 740,815 baht. In addition, the time waste in spare part searching reached 10.9 minutes per item. After improving efficiency through a waste reduction in inventory management processes, it was found that errors in physical inventory can be reduced up to 13.59 percent. Likewise, the spare part storage cost is reduced up to 94,372 baht, and spare part searching time is faster to 4.8 minutes per item. The researcher therefore recommends that the entrepreneur be aware of the importance of efficiency improvement through waste reduction in inventory management processes, including reducing errors in physical inventory, cost, and time.