INTRODUCTION
anufacturers are facing several competitions and
challenges on various fronts. These include price war,
emerge of new technology leap, fluctuating demand, and
emerge of new competitors. Change in technology is
becoming faster and affecting the product life cycle. To
sustain and survive in this rapidly changed environment, the
manufacturers have to increase their competitiveness by
either improving their performances or reducing their costs.
Logistics management is viewed as one of the ways to
achieve this. It directly affects process effectiveness which
consists of quality, cost and delivery. Using the logistics
management properly will permanently improve the
organization performance. Warehouse management is one
of the most important techniques in logistic management
due to the fact that inventory directly influences production
cost and customer service [1]. Improving inventory
management could decrease the production cost, leading to increase in market share, profit and customer service for the
company.
In this research, a chicken slaughterhouse company was
studied. Their main product is fresh chicken that are
distributed domestically and for export. Due to the
expansion of market, the demand is increasing every year.
However, the uncertainty of raw materials (live chicken)
that come in can be found daily. To prevent the loss in
opportunity in business, the company has to process all live
chicken coming in day-by-day. The over production is to be
stored as the inventory waiting for future purchasing. Due to
the company’s make-to-order and make-to-stock policy, this
forces the company to have more than a hundred types of
finished products stored in its warehouses. High number of
product varieties is the main problem that happens in
storage areas. The employees trend to have difficulty
finding the right products in warehouses quickly. New
warehouse layout design may alleviate this problem.
ABC class-based storage and optimization technique are
well established that they have been successfully
implemented in a number of industries. However, they are
rarely adopted in the Thai food industry. In this work,
attempt was made to combine both techniques to improve
warehouse operations of the chicken slaughterhouse. The
current operation was evaluated and analyzed. Previous
twelve-month order of four main customers was collected,
and classified by ABC class-based system. Optimization
using linear programming technique was then employed to
determine new product locations that were considered to
have the lowest overall traveling