Enhancing the Efficiency of the Beverage Product Distribution Network: A Case Study of ABC Company

Abstract

The objectives of this research are to: 1) investigate the feasibility of optimizing the beverage product distribution network, and 2) explore strategies for reducing beverage product distribution costs for ABC Company Limited. Data collection and retrieval were conducted over a four-month period (May - August 2024) through the compilation of internal organizational business data and relevant external business databases. Data acquisition involved structured interviews with operational personnel and participatory observation of transportation activities. The methodology further incorporated transportation theory, comparative cost analysis between the current and proposed scenarios utilizing Microsoft Excel, and distance calculation using Google Maps for transportation route comparison. Key informants comprised 24 employees from the General Manager to staff levels, 8 warehouse personnel, 4 accounting staff, 4 logistics business officers, and 8 transport staff. The study revealed that ABC Company Limited's core functions encompass the provision of services related to planning, warehouse management, inventory control, and multimodal transportation. The company operates regional distribution centers (DCs) in major provinces, including Lampang, Khon Kaen, Nakhon Ratchasima, Surat Thani, Chonburi, and a modern trade DC to satisfy nationwide customer demand. Analysis of the current distribution network identified redundant operational processes, resulting in unnecessarily high total costs across various dimensions. Conversely, the study indicated that consolidating three provincial warehouses—Phra Nakhon Si Ayutthaya, Saraburi, and Lopburi—into a single main distribution center would enhance operational efficiency and yield substantial reductions in various operating costs, specifically: (1) Transportation costs reduced by 11,230,571 THB/year (2) Warehouse rental costs reduced by 9,845,435 THB/year (3) Equipment and material handling costs reduced by 600,000 THB/year (4) Labor reduced by 45 workers.