PROCESS IMPROVENT FOR RAW MATERIAL MANAGEMENT: CASE STUDY OF A HEAT EXCHANGER MANUFACTURING COMPANY IN PATHUM THANI PROVINCE

Abstract

The objectives of this study were: 1) to examine the current working system of a raw material warehouse operated by a heat exchanger manufacturing company in Pathum Thani province, 2) to study the development model to improve the efficiency of the manufacturer’s raw material inventory, and 3) to improve its raw material inventory management system through efficient and cost-effective storage of raw materials. The sample set used in this study were the operations of a heat exchanger manufacturing company in Pathum Thani province. The study methods comprised: a process flowchart to examine the current working system of the raw material warehouse; root cause analysis to determine problems; application of waste reduction theory to improve workflow; frequency analysis to segment raw materials; implementation of counting cycles to determine the status of raw materials; coefficient of variation to regulate the level of demand for raw materials; economic order quantity and appropriate reorder point to reduce costs of inventory and raw material shortages; Express software for recording the data; and re-design of raw material inventory layout through categorizing raw materials by color bar tagging, their classification and identification.

The study results revealed that the current raw material warehouse operation was characterized by limited storage space for raw materials, no inventory management system, incorrect purchasing of raw materials through repeat ordering of items already ordered, and lost time searching for raw materials thereby incurring delays in the production process. It was found that improving the raw material inventory management system and workflow by comparing the operating time and distance of raw material disbursement for 30 operations resulted in operating time and disbursement distance decreasing by an average of 11% and 35%, respectively. Also, the re-design of inventory layout made finding raw materials easier.

Keyword: Raw material warehouse, Raw material inventory management, Process improvement