an application of lean and agile concepts in a distribution center of an automobile industry in...

7/31/2019 An Application of Lean and Agile Concepts in a Distribution Center of an Automobile Industry in Thailand

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Proceedings of the 7th Asia Pacific Industrial Engineering and Management Systems Conference 2006

17-20 December 2006, Bangkok, Thailand

________________________________________

: Corresponding Author

An Application of Lean and Agile Concepts

in a Distribution Center of an Automobile Industry in Thailand

Supparerg Khongsup and Thananya Wasusri

Graduate school of Management and Innovation

King Mongkuts University of Technology Thonburi, Bangkok 10140 THAILAND

+662-470-9400 ext. 15,Email: [email protected]

Abstract. This study is to apply lean and agile concepts on warehouse activities at an automobile distribution

center as a case study. The main objectives are to reduce inventory level and transit time at the distribution

center that supplies automobiles for Bangkok and suburbs. Value Stream Mapping is a tool using to analyze

problems. Then, warehouse designing using fast moving closest to the door and Group Technology (GT) are

applied in order to meet lean and agile concepts respectively. Finally, Arena version 9 is utilized to forecast

the effects of lean and agile concepts. It was founded that transit time at the distribution center could reduceby 13 second per one automobile, after applying lean concept. The inventory level could reduce from 70.0564

automobiles per day to 34.2763 automobiles per day. In other words, the inventory level could decrease up to

51.07%. As a consequence, the waiting time in car park could decrease from 7.3365 hours per one automobile

to 3.6361 hours per on automobile. Thus, the waiting time could reduce up to 50.44%. The methods could

improve the effectiveness of the distribution center. At the end, the case studys competitive advantages could,

therefore, increase.

Keywords: Agile, Lean, Fast moving closest to the door, Group Technology, Value Stream Mapping

1. INTRODUCTION

Automobile industry has been defined as one of the

major industries that would help to improve Thailands

economy. The Thai policy priority has been focused on the

automobile industry since the second national economic

and social development plan (Kasikorn research center

2002). The policy was to support the automobile industry to

be one of the five major industries and to make Thailand

become Detroit of Asia. As the industry is very important

and has high potential in sustainable gaining growth for the

Thai economy, the Thai automobile industry master plan

has target to have 1.8 million automobiles produced and 0.8

million automobiles exported in 2010 (Kasikorn research

center 2004).Distribution process is a very important activity in a

logistics system because it acts as buffering, stock keeping

and distributing raw materials or goods. Moreover, it also

receives goods produced from one organization or many

organizations in order to consolidate and transport those

goods to customer at the same destination (Frazelle 2002).

To improve capacity of distribution center is essential as it

helps to satisfy customer. Competitiveness advantages

could then be increased.

From our first investigation at the case study -a

distribution center at an automobile factory-, the

distribution center has a receiving plan regarding to Takt

Time of its production. The automobiles would then be

transported to Laem Chabang Port for international market

and 110 dealers for domestic market. It was found that

transit time in the distribution center storage and

retrieving- was very long due to the warehouse layout. The

warehouse area was assigned regarding to customer regions

without considering of the amount of demand for each

region. Exporting market had the highest number of

automobiles and followed by Bangkok and suburb region

market. The location area assigned for those two markets

was pretty far from receiving and transporting area. As a

result, there was high wasteful time on receiving and

distributing process. Moreover, it was also found that theaverage transit time in the distribution center was seven

hours and forty minutes. This was because of variability of

dealer demands and instability of arrival time of automobile

to the distribution center. On the other hand, the transport

plan that was volumes to transport to dealers and time to

destination were fixed and stable. The transport plan did

not match with trailer capacity. As a result, a dealer

transporting time was moved to the next period because it

waited for automobiles to match with a trailer capacity.

Some dealers might demand automobiles more than a

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Khongsup and Wasusri

trailer capacity. Then, some automobiles would be left at

the distribution for transporting at the next period. High

inventory level occurred in the distribution center. This

study is to reduce daily inventory level and total transit

time in the distribution center by using lean and agile

concepts. The concepts would help to improveeffectiveness of the distribution process and responsiveness

to customers.

2. LITERATURE REVIEWLean Production System or Toyota Production System

(TPS) was originated from Toyota Company in Japan. The

main concept is to eliminate waste (Muda). Waste is an

activity that is costing or using time without adding any

value to goods or services. Waste or Muda is categorized

into 7 groups that are overproduction, waiting, excessivetransportation, inappropriate processing, unnecessary

inventory, unnecessary motion and defects (Bicheno 2004;

Hines and Rich 1997; Hines and Taylor 2000; Tapping et

al. 2002). Those wastes would occur in any organization

activities or operations and could divided into 3 activities

or operations (Hines and Rich 1997; Hines and Taylor

2000). Firstly, value adding activity (VA) is an activity

relating to transforming or assembling raw materials into

goods. Secondly, non-value adding activity (NVA) is an

activity that concerns with defects in customer perspective.

It does not add any value on products. Finally, necessary

non-value adding activity (NNVA) is also an activity that

does not add value on products, but it is necessary and it

cannot be eliminated in a short period of time such as

quality inspection.

Lean production system has been implemented in

manufacturing sectors for a long time ago and it is now

being implemented on service sectors. Lean has 5 main

concepts that management could use them to apply lean

into practice (HinesandTaylor 2000; Womackand Jones

1996).

1) Specify Value. It is to identify value of goods from

customer viewpoint. The organization must avoid

interfering viewpoint from others such as departments of itsown organization.

2) Identify the Value Stream. It is necessary to identify

the value stream of goods that are activities starting from

designing, purchasing and producing in order to identify

non-value added activities or wastes.

3) Flow. The organization must design the flow of

value added activities to be quick, consistency and

continuously without breaking, reversing and damaging.

4) Pull. There must be customer orders before

producing. If total time in the value stream could reduce, an

organization could design, scheduling and producing

products that satisfy customer requirements at the time they

want.

5) Perfection. Organizations must keep developing

themselves continuously by using the value stream

mapping in order to make the flow of goods andinformation to be quick response to customers. Then,

wasteful activities would be continuously eliminated until

value added activities would be existed only.

Agile concept has integrated many business capacity

building components that are organization structure,

information system, logistics process and behaviors of staff

in order to be flexible and responsive in changing of

customers requirements (Christopher2000; Robertson and

Jones 1999). Agile concept is consisted of 4 main strategies

as following these (Robertson and Jones 1999; Goldman

1994; Maskell 2001; McCarthy and Tsinopoulos 2003;Ricby et al. 2000).

1. To satisfy customers requirements with products

and solutions.

2. To collaborate both intra-firm and inter-firm to

build up an virtual organization that can be beneficial in

sharing resource of firms along the supply chain in order to

response customer needs and shorten time to market.

3. To integrate and utilize resources and seek for

market opportunity that can be established by planning and

adjusting management systems to be quick response with

the fast changing and uncertainty environment.

4. To build up an organization culture that support

people to be creative, skillful and collaborative in working

for both people and organizations mutual targets.

Although lean and agile concepts are different in

objectives, the concepts can be applied within the same

supply chain or the same workplace (Christopher and

Towill 2001). To integrate the two concepts can be

summarized in 3 approaches.

1. The Pareto curve approach

2. The de-coupling point approach

3. Separation of Base and Surge demands

Christopher andTowill (2001) pointed out the situations

that the 3 approaches could be applied in table 1.

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Table 1: A contingency approach to supply chain strategy

choice.

Hybrid strategiesAppropriate market conditions and

operating environment

Pareto/80:20

Using lean methods for the volume lines, High level of variety; demand is

agile method for the slow movers non-proportionate across the range

De-coupling point

The aim is to be lean up to the de-coupling Possibility of modular production or

point and agile beyond it intermediate inventory; delayed final

configuration or distribution

Surge/base demand separation

Managing the forecastable element of Where base level of demand can confidently

demand using lean principles; using agile be predicted from past experience and where

principles for the less predictable element local manufacturing, small batch capacoty is

available Source: Christopher andTowill (2001)

From our literature review, many studies on lean and

agile concepts were published, but they mostly applied lean

or agile concepts individually. We found that only

Banomyong and Supatn (2004) showed applications of the

two concepts under an aquarium manufacturer. Value

streaming mapping was firstly used to analyze its

production activities. A new plant layout was then designed

based on lean concept in order to fasten the raw material

flow. Agile concept was finally utilized on sharing job

responsibility of each team work that can work

independently and faster to deliver shorter total lead time to

customers. Tahar andHussain (2000) studied on how to

improve productivity and utilization at the container yard of

Kelang Port, Malaysia by using ARENA program.

Therefore, this study is to apply the two concepts on adistribution center and targets to reduce inventory level per

day and total transit time in the distribution center by using

AREANA.

3. METHODOLOGY

3.1The Distribution Center Detail

The distribution center is owned by a large automobile

manufacturer in Thailand. The manufacturer has 2

assembly factories located in Samutprakarn andChachengsao provinces. Once automobiles had been

assembled, they were sent to the distribution center. The

distribution center then received, categorized and kept the

automobiles. Finally, the automobiles were retrieved to

send to Laem Chabang port and 110 domestic dealers. The

distribution centers layout is shown in figure 1. It can be

seen that the distribution center is divided into many zones

relating to customer areas such as south zone, metro zone

and export zone. Firstly, the automobile would come to

buy-off section. The automobile would then be sorted

regarding to its customer. It would be kept at the zone and

waiting for transporting process. It would then be loaded to

a trailer at the trailer loading area and transported to its

customer.

Buy-Off

Sorting lane Metro ZoneSpare Zone

Central Zone South Zone

North Zone

Metro Zone Metro Zone

Shuttle Zone

OfficeTrailer Loading Area

Export ZoneExport Zone



V

B

R

Y

W

Z

N

O

S X

P

Q

M

L

Figure 1: The distribution center layout.

The scopes of this study are the distribution center at

Samutprakarn province and the automobiles sent to 33

dealers in metro zone.

3.2Distribution Process

At the present, 3-loaded trailers are assigned to

transport the automobiles to metro zone and 6-loaded

trailers to transport to the other zones. The transportation

plan is calculated based on volume sent to each dealer per

day. The volume per day required by a dealer is averagedfrom the dealer monthly sales forecast. The transport plan

can be calculated as shown in table 2. It can be seen that the

volume per day is averaged from the monthly sales

forecast. One trailer can handle 6 automobiles. If volume

per day is 15, 2 trailers are needed.

Table 2: Calculation of a transportation plan.

Dealer Vol./month Vol./day Truck-load Trip necessity/day Time tab le

1 357 15 6 2 9:30, 12:30

2 261 11 6 2 9:30, 21:30

3 277 11 6 2 21:30, 23:30

4 594 24 6 4 9:30, 13:30, 21:30, 1:30

5 295 12 6 2 10:30, 22:30

3.3 The Analysis of Activity in the DistributionCenter

This is to analyze each activity in the distribution

center in order to specify value adding activity (VA), non-

value adding activity (NVA) and necessary non-value

adding activity (NNVA) by using value stream mapping to

identify wasteful aspects in the system. The process activity

mapping was used to identify waiting time, excessive

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transportation and unnecessary motion. Supply chain

response matrix was also applied to specify unnecessary

inventory (Hines and Rich 1997). Table 3 shows a process

activity mapping of receiving process and figure 2 shows

the supply chain response matrix of the distribution center.

From results of the process activity mapping, weanalyzed the proportion of wasteful aspects and types of

activity in the distribution center as shown in figure 3.

From figure 3, waiting time or delay time was up to

81.3% of total transit time in the distribution center and it

was totally NVA. From the supply chain response matrix,

the waiting time at the pre-loading area was the highest

value of the total transit time in the distribution center that

was 7.67 hours from 9.47 hours. If we reduced the waiting

time, the effectiveness of the distribution center could

improve. Then, cause and effect analysis was applied to

discover the main causes of the waiting time as shown in

figure 4.

From figure 4, it was found that 2 factors caused the

waiting time. Firstly, inappropriate layout led to havinglong lead time in moving automobiles in the distribution.

Secondly, long stock keeping time caused by variability of

volume and ordering time and limitation of computer

system that can schedule the transportation plan when an

formal order was received only. Then, the upcoming orders

cannot be found and the scheduling process cannot run

aggregately.

Table3: Process activity mapping of receiving process.

Hr. Min. Sec .

O

p

e

r

a

t

i

o

n

T

r

a

n

s

p

o

r

t

I

n

s

p

e

c

t

S

t

o

r

e

D

e

l

a

y VA NVA NNVA

1 Pick up manual book Receiving area 3 1

2 Walk to the car Receiving area 12 15 1

3 Open the bonnet Receiving area 4 1

4 Check ID no. on ID card and compare with ID no. on the car Receiving area 4 1

5 Check car apperance Receiving area 28 1

6 Open the driver door and check interior Receiving area 7 1

7 Get on and close the door Receiving area 3 1

8 Put manual book on the car floor Receiving area 3 1

9 Drive car to buy-off area, stop engine, open the door, get off and close the door 20 8 1

10 Walk back to the origin 8 5 1

40 0 1 206 times 1 times 3 times 0 times 0 times 1 times 4 times 5 times

Metres Hr. Min. Sec. 33 sec. 8 sec. 39 sec. 0 sec. 0 sec. 3 sec. 31 sec. 46 sec.

Flow Diagram

Total 1

Flow

# Activity PlaceDistance

(M.)People

Time Type of activities

Manual book's

storage area

buy-off

1.2.3.

4. 5.

2 4 6 8 10

2

4

6

8

10

Hours

Hours

7.67

Hours

Stock

1.80 Hours Lead time

Loading to trailer (0.5 hr)

Waiting in pre-load area (7.67 hr)

Operation time (0.3 hr)

0.30.8

Transport to dealer (1 hr)

Figure2: Supply chain response matrix of the distribution

center.

Type of activities

7.78%

10.61%

81.61%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

NNVA

NVA

VA

Total Time of Each Activities Percentage

Flow of activities

0.00%

0.11%

10.88%

7.70%

81.31%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Delay

Store

Inspect

Transportation

Operation

Total Time of Each Activities Percentage

Figure 3: Proportion of wasteful aspects and types of

activity.

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Long wating time in

car park

Dealer can receive

cars only in daytime

Delivery cannot run

24 hrs.Dealer can receive cars

only in night-time

Traffic problem

in daytimeCriminal problem

Road restriction time

(law)

Long driving time to/from car

park

Dealer don't have

enough area for trailer

Car volume not yet

reach truck-load on

delivery plan

Car volume is over

than delivery plan

No accurate data of planned daily

arrival time and volume of each dealer's

car

System will match order and car

only once car already entered to

distribution center

Delivery plan doesn't agree

with car's arrival time

Dont have enough time

to adjust delivery plan

Trailer cannot keep time

diagram or absent

Inappropriate

human control

Trailer stuck in

maintenance shop

Inappropriate trailer's

maintenance schedule

Long time in distribution

center

Inappropriate car park's

layout

Long distance in driving

to/from car park

Operator's tirenessSpeed limit in

distribution center

Dealer use roadside

as receiving area

Car have to wait

for next delivery

Car volume reach

truck-load before

delivery time

Traffic problem

Variation of volume and order

sequence in each dealer

Figure 4: Cause & effect diagram

3.4Design of Experiments

3.4.1Combination of Lean and Agile ConceptsLean and agile can be combined in the same supply

chain by using a de-coupling point that is appropriate to use

as a buffer of products before sending to customers

(Christopher and Towill 2001). The de-coupling point can

be identified as a strategic inventory that is to hold

inventory in some generic form and only to complete the

final assembly when the precise customer requirement is

know(Naylor et al. 1999). Lean would be implemented for

the process before the de-coupling point by leveling

production schedule. Agile would then be utilized after the

de-coupling point to handle with uncertainty of customer

demand and a variety of products(Christopher and Towill

2001; Naylor et al. 1999). The hybrid strategies have been

applied in the distribution center. We chose the car park

area as a de-coupling point. Automobiles came to the car

park area with lean concept. The transportation process

would be conducted based on agile concept as shown in

figure 5.

Receiving

+Buy-off

Car park area

De-coupling Point

Agile Processes

Sorting Lane

Dealer

Lean Process

Figure 5: De-coupling point of the distribution center

3.4.2Use of Lean Concept

Lean concept is appropriate for the process before the

de-coupling point (Christopher and Towill 2001; Naylor et

al. 1999). We would solve the problem of excessive moving

time in pre-loading area or sorting lane. The automobile

volumes regarding to customer zones and parking area

required are shown in table 4. It can be seen that Bangkok

or metro zone has smaller parking area when compare to

other zones and volumes. We then redesigned a new layout

for the 14 parking areas in the distribution center based on

fast turning closest to the door approach

(Athikomrattanakul 2004).

Thefast turning closest to the door approach can be

divided into 5 steps. Firstly, to compute average distance

between stock keeping area and receiving area and between

stocking keeping area and shipping area as the following

equation.

Table 4: Volumes of each customer and parking area

required.

Type of cars (sort by

destination area)Export Bangkok Central North South Shuttle

No. of parking area

required (area*)4 2.4** 1 1 1 1 10.4 -

Receiving volume

(units/month)15852 6118 2506 2356 2845 3489 33166 0.5

Delivery volume

(units/month)15852 6118 2506 2356 2845 3489 33166 0.5

* Parking area are B, V, R, W, X, S, Y, Z, L, O, M, P, N and Q zone

**Because of parking area for Bangkok has smaller size than others, so ratio concept will be applied in this case by

1 parking area will have 144 parking slots regularly so parking area for Bangkok = (72+72+72+72+60)/144 = 2.4

RegionTotal

volumeRatio

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Ej =PkTkjk=1

K

(1)

when Ej = average distance between the center of stock

keeping area (j) to the center of

receiving area and the center ofstock keeping area (j) to the center of

shipping area

Pk= probability of products passing receiving

point and shipping point

Tj = distance from stock keeping area (j) to

receiving point (k) or distance from stock

keeping area (j) to shipping point (k)

Here, the center of each car parking area and receiving

area is sorting lane area and shipping area is trailer loading

as shown in figure 6. For parking area B, it can be seen that

the distance between receiving point or sorting lane and thecenter of parking area B is 136 meters. 176 meters is the

distance between the center of parking area B and shipping

point or trailer loading area.

Parking

area

Distance between sorting lane

and center point of each

parking area (m.)

Distance between trailer

loading area and center point

of each parking area (m.)

B 136 176

V 330 189

R 116 189

W 183 189

S 107 117

X 174 117

Z 179 126

Y 246 126

L 259 381

O 326 289

M 267 453

P 334 428

N 348 453

Q 408 428

Buy-Off

Sorting lane


V

B

R

Y

W

Z

N

O

S X

P

Q

M

L

Figure 6: Distances between receiving point and shipping

point to the center of parking area

When we obtained the distances (Ej), we then rank the

distances with minimum distance first approach. The

second step is to calculate the frequency of access of each

product as equation (2).

Fa =raqa

(2)

When Fa = frequency of accessing of product a

ra = volume of product a

qa = stock keeping area required for product a

Once, we have F values for each product. We would

rank the product according to maximum F value first

approach. The third step, stock keeping area for each

product would then be specified. Products with high F

value would be matched with stock keeping area with low

E value. On the other hand, product with low F value

would be match with high E value product.

The fourth step is to calculate the total distance

regarding to equation (3).

j ZaTa = 4ra Ej

qa

(3)

When Ta = total distance of product a

Ej = average distance between the center of stock

keeping area (j) and the center of shipping

area

ra = volume of product a

qa = stock keeping area required for product a

The fifth step is to compare the total distance between

the old and new layouts.

3.4.3Use of Agile Concept

The use of agile concept is appropriate to implement

for the process after the de-coupling point that is to manage

uncertainty and variability of product and customer

(Christopher and Towill 2001; Naylor et al. 1999). From our

problem, we would apply Group Technology (GT)

(Gallagher and Knight 1973; Snead 1988)that has been

applied in flexible manufacturing to classify groups of

transportation plan to achieve a flexible transporting

system. To apply GT in this circumstance, 4 steps have

been concluded.

OldrailwayRd.

Poochao-samingpriRd.

SukhumvitRd.

Bangnaexpressway

Bangna-TradRd.

Sri-nakarinRd.

Ram-Intraexpressway

Daokanongexpressway

Cheangwattanaexpressway

PraditmanudamR

d.

Kaset-NavaminRd.

SukhaphibarnIRd.

Ram-IntraRd.

Vipavadee-RangsitRd.

PaholyothinRd.

RamaIIRd.

TeparakRd.

RamaIVRd.

OuterRingRd.

Rangsit-NakornnayokRd.

KarnchanaphisekRd.

SukhaphibarnIIIRd.

SerithaiRd.

Pathumthani-RangsitRd.

NgarmwongwanRd.

PattanakarnRd.

RamaIXRd.

SuwinthawongRd.

SuksawasRd.

LanlaungRd.

NimitmaiRd.

SukhaphibarnVRd.

PetchburitadmaiRd.

PrachautitRd.

PrachautitRd.(Bangmod)

RattanathibesRd.

LumlukkaRd.

BuddhabuchaRd.

KanlapapruekRd.

B1 X X X X X X

B2 X X X X X X X X

B3 X X X X X

B4 X X X X X X X

B5 X X X X X

B6 X X X X X X X

B7 X X X X X X X X

B8 X X X X X X

B9 X X X X X X X X

B10 X X X X

B11 X X X X X X

B12 X X X X X X X

B13 X X X X X X X

B14 X X

B15 X X X X

B16 X X X X

B17 X X X X X X

B18 X X X X X X

B19 X X X X X X X

B20 X X X X X X

B21 X X X X X X X X

B22 X X X X X X X X

B23 X X X X X X X

B24 X X X X X X X X

B25 X X X X X X

B26 X X X X X

B27 X X X X X X X X

B28 X X X X X X

B29 X X X X X

B31 X X X X X X X X X

B32 X X X X X X X

B33 X X X X X X X

B34 X X X X X X X

DealersinBangkokandsuburbs

Road in delivery route

Figure 7: Production Flow Analysis (PFA) of routes

The first step is to identify rules that use to classify

groups of transportation route to dealers. The second step,

using Production Flow Analysis (PFA) (Snead 1988) to

analyze transportation routes as shown in figure 7 and

followed by Production Flow Analysis Matrix. Finally,

each group of dealers would be coding.

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4. RESULTS

4.1Results from Lean Concept

After we applied thefast turning closest to the door

approach to re-design the distribution center or car parkinglayout. We calculated Ej and Fa values for the new design

and detail is shown in table 5.

Table 5: Results of the new layout

Parking

area

E value or average distance between

center point of each parking area and

center point of receiving area with

loading area (m.)

Type of cars which store (sort

by destination area)F value

S 112 Bangkok 2549

X 145.5 Bangkok 2549

R 152.5 Export 3963

Z 152.5 Export 3963

B 156 Bangkok 2549

W 186 Export 3963

Y 186 Export 3963

V 259.5 Shuttle (North-East & East) 3489O 310.5 Bangkok 2549

L 320 Bangkok 2549

M 360 South 2845

P 381 Central 2506

N 400.5 North 2356

Q 418 Spare

Before After

Buy-Off

Sorting lane Metro ZoneSpare Zone

Central Zone South Zone

North Zone


Shuttle Zone





V

B

R

Y

W

Z

N

O

S X

P

Q

M

L

Buy-Off

Sorting lane Metro ZoneShuttle Zone

Export Zone Export Zone

Export Zone


Export Zone


Central ZoneSouth Zone

Spare ZoneNorth Zone


V

B

R

Y

W

Z

N

O

S X

P

Q

M

L

Figure 8: The parking area before and after improvement

From table 5, it can be seen that E values of S and X

parking areas are pretty low comparing to the others that

are 112 and 145.5 meters consecutively. The limitation of

the 5 parking areas allocated to metro zone is 3 automobileper one parking area. This study does not change the

parking area size. Then, S, X, L, O and B parking area

allocated to metro zone cannot be changed. The new layout

has been established as shown in figure 8. From the new

design, total distance in the distribution center would be

36,688,962 meters per month. While that of the old design

is 43,044,830 meters per month. It can be said that total

distance in the distribution center can be reduced up to

6,355,868 meters per month or 14.77% after using the fast

turning closest to the door approach.

4.2Results from Agile ConceptGT has been applied to group transportation routes to

metro zone. Production flow analysis (PFA) has been used

to classify groups of dealer as shown in figure 9.

OldrailwayRd.

Poochao-samingpriRd.

SukhumvitRd.

Bangnaexpressway

Kaset-NavaminRd.

SukhaphibarnIRd.

Ram-Intraexpressway

PraditmanudamR

d.

SukhaphibarnV

Rd.

LumlukkaRd.

Vipavadee-RangsitRd.

PaholyothinRd.

Rangsit-NakornnayokRd.

Daokanongexpressway

RamaIIRd.

KarnchanaphisekRd.

Cheangwattanaexpressway

NgarmwongwanRd.

Bangna-TradRd.

Sri-nakarinRd.

TeparakRd.

Ram-IntraRd.

RamaIVRd.

OuterRingRd.

SukhaphibarnIIIRd.

SerithaiRd.

Pathumthani-RangsitRd.

PattanakarnRd.

RamaIXRd.

SuwinthawongRd.

SuksawasRd.

LanlaungRd.

NimitmaiRd.

PetchburitadmaiRd.

PrachautitRd.

PrachautitRd.

(Bangmod)

RattanathibesRd.

BuddhabuchaRd.

KanlapapruekRd.

B2 X X X X X X X X

B7 X X X X X X X X

B31 X X X X X X X X X

B33 X X X X X X X

B22 X X X X X X X X

B23 X X X X X X X

B12 X X X X X X X

B19 X X X X X X X

B32 X X X X X X X

B17 X X X X X X

B21 X X X X X X X X

B34 X X X X X X X

B24 X X X X X X X X

B9 X X X X X X X X

B25 X X X X X X

B11 X X X X X X

B20 X X X X X X

B28 X X X X X X

B1 X X X X X X

B3 X X X X X

B5 X X X X X

B10 X X X X

B18 X X X X X X

B13 X X X X X X XB15 X X X X

B16 X X X X

B29 X X X X X

B4 X X X X X X X

B6 X X X X X X X

B8 X X X X X X

B27 X X X X X X X X

B14 X X

B26 X X X X X

Road in delivery route

DealersinBangkokandsuburbs

Figure 9: Production flow analysis of transportation routes

Table 6: Results of applying GT to group transportation

routes.

Car

volume per

month

(units)

Car

volume per

day (units)

No. of trip

per day

Car

volume per

month

(units)

Car

volume per

day (units)

No. of trip

per day

B2 366 15 5 260%

B7 814 33 11 64%

B31 114 5 2 800%

B33 67 3 1 1700%

B13 85 3 1 200%B18 108 4 1 200%

B12 151 6 2 150%

B19 100 4 1 400%

B32 104 4 1 400%

B17 101 4 1 100%

B28 84 3 1 100%

B21 92 4 1 100%

B34 76 3 1 100%

B11 314 13 4 50%

B20 118 5 2 200%

B3 217 9 3 200%

B5 284 11 4 125%

B10 180 7 2 350%

B22 97 4 1 100%

B23 72 3 1 100%

B4 105 4 1 1000%

B6 152 6 2 450%

B8 580 23 8 38%

B15 90 4 1 200%

B16 82 3 1 200%

B29 76 3 1 200%

B9 653 26 9 22%

B24 83 3 1 1000%

B25 76 3 1 1000%

B14 152 6 2 50%

B26 77 3 1 200%B1 364 15 5 364 15 5 0%

B27 84 3 1 84 3 1 0%

6118 245 82 6118 245 82

3

11

3

6

9

2

11

3

5

2

2

229 9

248 10

812 32

169 7

837 33

432 17

681 27

185 7

168 7

193 8

355 14

Before apply GT After apply GT

No. of trip per

day increasing

(%)

1361 54 18

Cannot

grouped

Cluster Dealer

M9

M10

M11

M12

M5

M6

M7

M8

M1

M2

M3

M4

From figure 9, we grouped routes that dealers are

located close together or using the same route. Then, we

could classify 12 groups of route as shown in table 6. It can

be seen that transportation routes have been decreased from

33 routes to 14 routes after using GT. It increases the

average of automobileper day per route from 7.4 to 17.5. It

increases transportation frequency from 2.5 rounds per day

per route to 5.8 rounds per day per route.

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4.3Results from SimulationDiscrete event simulation (ARENA) was used to test

results of the proposed car parking area layout. It was

found that the average total transit time in the distribution

center for all destinations could be reduced from 0.1261hours to 0.1226 hours or having a reduction of 13 seconds

per one automobile. More details are shown in table 7.

Table 7: Simulation results of before and after lean

application.

Time

(hours)Half-Width

Time

(hours)Half-Width

All destination 0.1261 0.01 0.1226 0.01

Bangkok & suburbs 0.1155 0.01 0.1158 0.00

Central 0.1220 0.01 0.1341 0.01

North 0.1046 0.01 0.1473 0.01

South 0.1257 0.01 0.1323 0.01

Shuttle (North-east & East) 0.1061 0.01 0.1423 0.01

Export 0.1384 0.01 0.1137 0.00

Before After Type of cars (sort by

destination area)

*Half width is a half of 95% confidence interval of mean

value (Kelton et al. 2003)

Simulation was also run to show effects of using GT to

group transportation routes and the results are in table 7 and

8. It can be seen that an average inventory level could bereduced from 70.0567 automobiles per day to 34.2763

automobiles per day or a 51.07% reduction rate. Moreover,

an average waiting time in the car park could also be

reduced from 7.3365 hours to 3.6361 hours or 50.44%

reduced.

Table 8: Average inventory level before and after using

agile concept.

Average

Inventory

(units)

Half-Width

Average

Inventory

(units)

Half-Width

Inventory level 70.0564 7.07 34.2763 11.75

KPI

Before After

Table 9: Waiting time in the cap park before and after using

agile concept

Time (hours) Half-Width Time (hours) Half-Width

Waiting time in car park 7.3365 0.75 3.6361 0.56

AfterKPI

Before

5. CONCLUSION AND SUGGESTION5.1Conclusion

This study is to combine lean and agile concepts by

using de-coupling point. Firstly, we started with identifyingwasteful activities in the distribution center by using

Process Activity Mapping and Supply Chain Response

Matrix that are tools in Value Stream Mapping. We found

that problems or non-conformances are long transit time

and distance in the pre-loading area and high inventory

level at the car parking area.

We then applied fast turning closest to the door

approach to propose a new layout in order to reduce total

time and distance in the pre-loading area. Group

Technology (GT) was applied to group dealers regarding to

their location and transportation route.

From our simulation runs, the combination of lean andagile approach could reduce the average total time used in

the distribution center by 13 seconds per one automobile.

The average inventory level has been reduced up to 51.07%

and 50.44% of the average waiting time the car park has

also been reduced.

5.2 SuggestionThree strategies that the automobile manufacturer can

be used to improve efficiency of the distribution process are

short term, medium term and long term strategies.

Short term strategy

Although lean and agile concepts could improve

efficiency of the distribution center, but controlling is also

important. An example is to control trailer time to match

with the transportation plan. If a trailer delays to pick up

the automobiles or it breaks down, total waiting time and

inventory level at the car park would be affected.

Therefore, human resource management and total

preventive maintenance must be in place to control the new

transportation plan designed.

Medium term strategy

For the mean time, the computer system at the

distribution center computes the volumes per day of eachdealer by using their average of monthly sales in order to

make a daily transportation plan. The system does not take

the actual sales into account. The volumes sent may or may

not meet with dealers need or trailer may be under

utilization. If information flow could be improve by

identifying dealer since the production process,

transportation plan would be more accurate with high

trailer utilization.

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Long term strategy

After an improvement of the information flow, the next

step is to integrate production and marketing. Orders of the

dealers who are in the same transportation route must be

synchronized since the production schedule to

transportation schedule. The automobile produced per daywould be sent directly to dealers and there will be

unnecessary to have the car parking area.

5.3Further StudyIn this study, we applied lean and agile concepts on the

pre-loading area and transportation route. However, those

concepts could be implemented in other circumstances that

can lead to different outcomes. Moreover, GT has been

utilized only for metro zone dealers. It is possible to apply

GT on the other zones.

Furthermore, it is very likely that transportation costwould be increasing as the effect of petrol cost. To trade-off

between transportation cost and inventory cost that can

achieve service level would be an issue.

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AUTHOR BIOGRAPHIES

Supparerg Khongsup is a graduated student of MasterDegree in Logistics Management, Graduate School ofManagement and Innovation, King Mongkuts Universityof Technology Thonburi, Thailand. He has worked forToyota Motor Thailand Co., Ltd. as vehicle logistics

planner since 2003. His email address is

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Thananya Wasusri is a lecturer at Graduate School ofManagement and Innovation, King Mongkuts Universityof Technology Thonburi, Thailand. She received a Ph. D.from the School of Mechanical, Material andManufacturing Engineering at the University of

Nottingham in 2002. Her teaching and research interestsare simulation, inventory management, supply chainmanagement and decision support systems. Her emailaddress is .

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