Proceedings of the 7th Asia Pacific Industrial Engineering and Management Systems Conference 2006 17-20 December 2006,

Bangkok, Thailand

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: thananya.was@kmutt.ac.th 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 reduce by 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 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 the average 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

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

________________________________________ : Corresponding Author

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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 improve effectiveness of the distribution process and responsiveness to customers.

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 and information 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 (Christopher 2000; 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 and Towill (2001) pointed out the situations that the 3 approaches could be applied in table 1.

2. LITERATURE REVIEW
Lean 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, excessive transportation, 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 (Hines and Taylor 2000; Womack and 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 its own 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

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Table 1: A contingency approach to supply chain strategy choice.

Hybrid strategies Pareto/80:20 Using lean methods for the volume lines, agile method for the slow movers De-coupling point The aim is to be lean up to the de-coupling point and agile beyond it Surge/base demand separation Managing the forecastable element of demand using lean principles; using agile principles for the less predictable element Appropriate market conditions and operating environment High level of variety; demand is non-proportionate across the range

waiting for transporting process. It would then be loaded to a trailer at the trailer loading area and transported to its customer.
Buy-Off V Sorting lane B Metro Zone R Central Zone South Zone Spare Zone

Possibility of modular production or intermediate inventory; delayed final configuration or distribution Where base level of demand can confidently be predicted from past experience and where local manufacturing, small batch capacoty is available

Metro Zone

Metro Zone

Z North Zone Shuttle Zone

Trailer Loading Area L M Export Zone Export Zone

Office

Metro Zone

Metro Zone

O P

Source: Christopher and Towill (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 and Hussain (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 a distribution center and targets to reduce inventory level per day and total transit time in the distribution center by using AREANA.

N Export Zone Export Zone

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.

3.2 Distribution 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 averaged from 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.

3. METHODOLOGY 3.1 The Distribution Center Detail

The distribution center is owned by a large automobile manufacturer in Thailand. The manufacturer has 2 assembly factories located in Samutprakarn and Chachengsao 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
Dealer Vol./month Vol./day Truck-load Trip necessity/day 1 357 15 6 2 2 261 11 6 2 3 277 11 6 2 4 594 24 6 4 5 295 12 6 2 Time table 9:30, 12:30 9:30, 21:30 21:30, 23:30 9:30, 13:30, 21:30, 1:30 10:30, 22:30

3.3 The Analysis of Activity in the Distribution Center

This is to analyze each activity in the distribution center in order to specify value adding activity (VA), nonvalue 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, we analyzed 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 having long 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.

Table 3: Process activity mapping of receiving process.

Time O p e r a t i o n T r a n s p o r t Flow I n s p e c t Type of activities S t o r e D e l a y

Activity

Place

Distance (M.)

Hr. Min. Sec.

People

VA

NVA

NNVA

1 2 3 4 5 6 7 8 9 10

Pick up manual book Walk to the car Open the bonnet Check ID no. on ID card and compare with ID no. on the car Check car apperance Open the driver door and check interior Get on and close the door Put manual book on the car floor Drive car to buy-off area, stop engine, open the door, get off and close the door Walk back to the origin Total

Receiving area Receiving area Receiving area Receiving area Receiving area Receiving area Receiving area Receiving area

12

20 8 40 Metres 0 1

3 15 4 4 28 7 3 3 8 5 20 Hr. Min. Sec.

1 1 1 1 1 1 1 1 1 1 1 6 times 1 times 3 times 0 times 0 times 33 sec. 8 sec. 39 sec. 0 sec. 0 sec. 1 times 4 times 5 times 3 sec. 31 sec. 46 sec.

Flow Diagram 3.

2.

1.

Manual book's storage area

buy-off
4. 5.

Hours 10 Loading to trailer (0.5 hr) 8 7.67 Hours 6 Stock Waiting in pre-load area (7.67 hr) 4 2 Operation time (0.3 hr) 0.3 0.8 2 4 6 8 1.80 Hours Lead time 10
VA NVA 10.61%
Operation Transportation Inspect Store Delay 0% 10% 20% 0.11% 0.00% 7.70% 10.88%

Flow of activities

Transport to dealer (1 hr)

81.31% 30% 40% 50% 60% 70% 80% 90% 100%

Total Time of Each Activities Percentage

Type of activities

81.61% 7.78% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Total Time of Each Activities Percentage

Hours

NNVA

Figure 2: Supply chain response matrix of the distribution center.

Figure 3: Proportion of wasteful aspects and types of activity.

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Dealer don't have enough area for trailer Criminal problem Traffic problem in daytime

Dealer use roadside as receiving area Dealer can receive cars only in night-time

Road restriction time (law) Traffic problem

Inappropriate human control

Inappropriate trailer's maintenance schedule

Dealer can receive cars only in daytime

Delivery cannot run 24 hrs. Trailer cannot keep time diagram or absent

Trailer stuck in maintenance shop

Operator's tireness

Speed limit in distribution center

Car volume reach truck-load before delivery time

Long wating time in car park Car volume not yet reach truck-load on delivery plan Car have to wait for next delivery Dont have enough time to adjust delivery plan No accurate data of planned daily arrival time and volume of each dealer's car Variation of volume and order sequence in each dealer

Long time in distribution center

Long driving time to/from car park

Car volume is over than delivery plan

Long distance in driving to/from car park

Delivery plan doesn't agree with car's arrival time

System will match order and car only once car already entered to distribution center

Inappropriate car park's layout

Figure 4: Cause & effect diagram

3.4 Design of Experiments 3.4.1 Combination of Lean and Agile Concepts

Lean 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.
De-coupling Point Lean Process Sorting Lane
Receiving +Buy-off

3.4.2 Use 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). The fast 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.
Region Total Ratio Type of cars (sort by volume Export Bangkok Central North South Shuttle destination area) No. of parking area 4 2.4** 1 1 1 1 10.4 required (area*) Receiving volume 15852 6118 2506 2356 2845 3489 33166 0.5 (units/month) Delivery volume 15852 6118 2506 2356 2845 3489 33166 0.5 (units/month) * 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

Agile Processes Car park area Dealer

Figure 5: De-coupling point of the distribution center

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Ej = PkTkj
k=1

(1)

when

Ej = average distance between the center of stock keeping area (j) to the center of receiving area and the center of stock 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)

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).

Ta = 4ra j
When

Ej
qa
Za

(3)

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 the center 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.
Buy-Off V Sorting lane B B R W V R S X Y W S X Z Trailer Loading Area L M Office Y O P M P N Q N Q 348 408 453 428 267 334 453 L O 136 330 116 183 107 174 179 246 259 326 176 189 189 189 117 117 126 126 381 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.)

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.

3.4.3 Use 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.
Road in delivery route Cheangwattana expressway Prachautit Rd. (Bangmod) Rangsit-Nakornnayok Rd. Pathumthani-Rangsit Rd. Daokanong expressway Poochao-samingpri Rd. Vipavadee-Rangsit Rd. Ram-Intra expressway Karnchanaphisek Rd. Sukhaphibarn III Rd. Ngarmwongwan Rd. Petchburitadmai Rd. Sukhaphibarn V Rd. Praditmanudam Rd. Bangna expressway Kaset-Navamin Rd. Sukhaphibarn I Rd. Suwinthawong Rd.

289

Suksawas Rd.

Figure 6: Distances between receiving point and shipping point to the center of parking area
Dealers in Bangkok and suburbs

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).

ra Fa = q a

(2)

B1 B2 B3 B4 B5 B6 B7 B8 B9 B10 B11 B12 B13 B14 B15 B16 B17 B18 B19 B20 B21 B22 B23 B24 B25 B26 B27 B28 B29 B31 B32 B33 B34

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X

Nimitmai Rd.

Lanlaung Rd.

Rama IV Rd.

Rama IX Rd.

Teparak Rd.

Rama II Rd.

Serithai Rd.

428

X X

X X X X X

X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X

X X X

X X

X X

X X X X X X

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

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.

1003

Kanlapapruek Rd.

Buddhabucha Rd.

Rattanathibes Rd.

Bangna-Trad Rd.

Paholyothin Rd.

Old railway Rd.

Pattanakarn Rd.

Sri-nakarin Rd.

Outer Ring Rd.

Sukhumvit Rd.

Ram-Intra Rd.

Lumlukka Rd.

Prachautit Rd.

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4. RESULTS 4.1 Results from Lean Concept

After we applied the fast turning closest to the door approach to re-design the distribution center or car parking layout. 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 S X R Z B W Y V O L M P N Q E value or average distance between center point of each parking area and center point of receiving area with loading area (m.) 112 145.5 152.5 152.5 156 186 186 259.5 310.5 320 360 381 400.5 418 Type of cars which store (sort by destination area) Bangkok Bangkok Export Export Bangkok Export Export Shuttle (North-East & East) Bangkok Bangkok South Central North Spare F value 2549 2549 3963 3963 2549 3963 3963 3489 2549 2549 2845 2506 2356

4.2 Results from Agile Concept

GT 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.
Road in delivery route Cheangwattana expressway Prachautit Rd. (Bangmod) Rangsit-Nakornnayok Rd. Pathumthani-Rangsit Rd. Daokanong expressway Poochao-samingpri Rd. Vipavadee-Rangsit Rd. Ram-Intra expressway

Karnchanaphisek Rd.

Sukhaphibarn III Rd.

Ngarmwongwan Rd.

Petchburitadmai Rd.

Sukhaphibarn V Rd.

Praditmanudam Rd.

Bangna expressway

Kaset-Navamin Rd.

Sukhaphibarn I Rd.

Suwinthawong Rd.

B2 B7 B31 B33 B22 B23 B12 B19 B32 B17 B21 B34 B24 B9 B25 B11 B20 B28 B1 B3 B5 B10 B18 B13 B15 B16 B29 B4 B6 B8 B27 B14 B26

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

Dealers in Bangkok and suburbs

X X X X X X X X X X X X X X X X X X X

X X X X

X X X

X X X X X X

X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X

X X X X X X X X X X X

X X X X X X X X X

Figure 9: Production flow analysis of transportation routes Table 6: Results of applying GT to group transportation routes.
Cluster
X

Before
Buy-Off V Sorting lane B Metro Zone R Central Zone South Zone Spare Zone Sorting lane W Export Zone B Metro Zone R Buy-Off

After

V Shuttle Zone

W Export Zone

Dealer

Metro Zone

Metro Zone

Metro Zone

Metro Zone

Z North Zone Shuttle Zone

Y Export Zone

Z Export Zone

M1

M2
Trailer Loading Area L M Export Zone Export Zone Office Trailer Loading Area O L M South Zone Central Zone Office

M3
Metro Zone Metro Zone Metro Zone Metro Zone O

M4 M5

N Export Zone Export Zone

Q North Zone

N Spare Zone

M6 M7 M8 M9

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 automobile per 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.

M10

M11 M12 Cannot grouped

B2 B7 B31 B33 B13 B18 B12 B19 B32 B17 B28 B21 B34 B11 B20 B3 B5 B10 B22 B23 B4 B6 B8 B15 B16 B29 B9 B24 B25 B14 B26 B1 B27

Before apply GT After apply GT Car Car Car Car No. of trip volume per No. of trip volume per volume per volume per month per day per day month day (units) day (units) (units) (units) 366 15 5 814 33 11 1361 54 18 114 5 2 67 3 1 85 3 1 3 193 8 108 4 1 151 6 2 5 355 14 100 4 1 104 4 1 101 4 1 2 185 7 84 3 1 92 4 1 2 168 7 76 3 1 314 13 4 6 432 17 118 5 2 217 9 3 9 681 27 284 11 4 180 7 2 97 4 1 2 169 7 72 3 1 105 4 1 11 837 33 152 6 2 580 23 8 90 4 1 248 10 3 82 3 1 76 3 1 653 26 9 812 32 11 83 3 1 76 3 1 152 6 2 229 9 3 77 3 1 364 15 5 364 15 5 84 3 1 84 3 1 6118 245 82 6118 245 82

No. of trip per day increasing (%) 260% 64% 800% 1700% 200% 200% 150% 400% 400% 100% 100% 100% 100% 50% 200% 200% 125% 350% 100% 100% 1000% 450% 38% 200% 200% 200% 22% 1000% 1000% 50% 200% 0% 0%

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 automobile per 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.

1004

Kanlapapruek Rd.

Buddhabucha Rd.

Rattanathibes Rd.

Bangna-Trad Rd.

Paholyothin Rd.

Old railway Rd.

Pattanakarn Rd.

Sri-nakarin Rd.

Outer Ring Rd.

Sukhumvit Rd.

Lumlukka Rd.

Ram-Intra Rd.

Prachautit Rd.

Suksawas Rd.

Nimitmai Rd.

Lanlaung Rd.

Rama IV Rd.

Rama IX Rd.

Teparak Rd.

Rama II Rd.

Serithai Rd.

Khongsup and Wasusri

4.3 Results from Simulation

Discrete 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 0.1261 hours 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.
Type of cars (sort by destination area) All destination Bangkok & suburbs Central North South Shuttle (North-east & East) Export Before Time (hours) 0.1261 0.1155 0.1220 0.1046 0.1257 0.1061 0.1384 Half-Width 0.01 0.01 0.01 0.01 0.01 0.01 0.01 Time (hours) 0.1226 0.1158 0.1341 0.1473 0.1323 0.1423 0.1137 After Half-Width 0.01 0.00 0.01 0.01 0.01 0.01 0.00

5. CONCLUSION AND SUGGESTION 5.1 Conclusion

This study is to combine lean and agile concepts by using de-coupling point. Firstly, we started with identifying wasteful 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 and agile 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.

*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 be reduced 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.
KPI Inventory level Before Average Half-Width Inventory (units) 70.0564 7.07 After Average Inventory (units) 34.2763 Half-Width 11.75

5.2 Suggestion
Three 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 each dealer 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.

Table 9: Waiting time in the cap park before and after using agile concept
KPI Waiting time in car park Before Time (hours) 7.3365 Half-Width 0.75 3.6361 After Time (hours) Half-Width 0.56

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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 day would be sent directly to dealers and there will be unnecessary to have the car parking area.

5.3 Further Study

In 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 cost would 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.

REFERENCES
Athikomrattanakul, P., 2004, Warehouse storage, class materials in warehouse management module semester 2 of 2004. Logistics Management Program, Graduate school of management and innovation, King Mongkuts University of Technology, 1-7. Banomyong, R., Supatn, N. (2004) Comparing lean and agile logistics strategies: a case study, 2nd World Conference on Production & Operation Management Society (POMS) Proceedings, Cancun, Mexico, April 30May 3, 2004, 1-21. Bicheno, J. (2004) The New Lean Toolbox Towards Fast, Flexible Flow, Production and Inventory Systems and Industrial Engineering Books, University of Buckingham, UK., 14-18. Christopher, M. (2000) The agile supply chain competing in volatile markets, Industrial Marketing Management, 29, 37-44. Christopher, M., Towill, D. (2001) An integrated model for the design of agile supply chains, International Journal of Physical Distribution & Logistics Management, 31/4, 235-246. Frazelle, E. (2002) World-class Warehousing and Material Handling, McGraw-Hill, New York, p. 3. Gallagher, C.C., Knight, W.A. (1973) Group Technology, Butterworth and Co. London. Goldman, S.L. (1994) Agile Competitors and Virtual Organizations: Strategies for Enriching the Customer, Van Nostrand Reinhold, New York.

Hines, P., Rich, N. (1997) The seven value stream mapping tools, International Journal of Operations & Production Management, 17/1, 46-53. Hines, P., Taylor, D. (2000) Going Lean, Lean Enterprise Research Center, Cardiff Business School, UK., 9-10. Kasikorn research center, 2002, Thailand automobile and part industry to world market, Krasaetat, No. 8, Issue 1267. Kasikorn research center, 2004, Thailand automobile industry in oil crisis: FTA could support Detroit of Asia , Krasaetat, No. 10, Issue 1606. Kelton, W.D., Sadowski, R.P.,Sturrock, D.T. (2003) Simulation with Arena 3rd ed., McGraw-Hill, Singapore. Maskell, B., 2001 The age of agile manufacturing, Supply Chain Management: An International Journal, 6/1, 5-11. McCarthy, I., Tsinopoulos, C. (2003) Strategies for agility: an evolutionary and configurational approach, Integrated Manufacturing Systems, 14/2, 103-113. Naylor, J.B.,Naim M.M. and Berry,D. (1999) Leagility: integrating the lean and agile manufacturing paradigms in the total supply chain, International Journal of Production Economics, 62, 107-118. Ricby, C.,Day, M., Forrester, P. and Burnett, J. (2000) Agile supply: rethinking systems thinking, systems practice, International Journal of Agile Manufacturing Systems, 2/3, 178-186. Robertson, M. and Jones, C. (1999) Application of lean production and agile manufacturing concepts in a telecommunications environment, International Journal of Agile Management Systems, 1/1, 14-16. Snead, C.S. (1988) Group Technology: Foundation for Competitive Manufacturing, Van Nostrand Reinhold, New York. Tahar, R.M.,Hussain, K. (2000) Simulation and analysis for Kelang container terminal, Logistics Information Management, 13/1, 14-20. Tapping, D., Luyster, T., Shuker, T. (2002) Value Stream Management, Productivity Press, New York, 41-42. Womack, J.P. and Jones, D.T. (1996) Lean Thinking, Simon & Schuster.

AUTHOR BIOGRAPHIES
Supparerg Khongsup is a graduated student of Master Degree in Logistics Management, Graduate School of Management and Innovation, King Mongkuts University of Technology Thonburi, Thailand. He has worked for Toyota Motor Thailand Co., Ltd. as vehicle logistics planner since 2003. His email address is <note_osk116@hotmail.com>

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

Nottingham in 2002. Her teaching and research interests are simulation, inventory management, supply chain management and decision support systems. Her email address is <thananya.was@kmutt.ac.th>.

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