Applying Lean and Six Sigma Concept to Reduce Inventory Cost of SME in Thailand After Covid-19 Crisis : A Case Study of Takara Planning Company Limited
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Abstract
Takara Planning Co., Ltd. is an SME running the business of re-packaging and shipping the balloons product for the customers in Japan. During COVID-19 lock down crisis, the company faced the problem of high inventory holding costs due to products returned, disorganised warehouse, improper inventory control, and increasing of inventory holding costs, especially the cost of warehouse space rental that tend to keep increasing. The objective of this research is to 1. examine the cause of problems in the work process of the warehouse which impact the inventory cost, and 2. reduce the inventory cost of the company. The tools used in the study were the concept of Lean Six Sigma (DMAIC), Cause and Effect Diagram, 5S and ECRS principles. The result showed that applying Lean Six Sigma concept and the tools (DMAIC, 5S, ECRS) to lean waste in the warehouse reduced the warehouse space occupancy from 92% to 62%. It means we gained available space back 26% by the improvement. In terms of cost, after improvement, we reduce the warehouse space rental cost from 8,140,000 Baht to 5,816,400 Baht. It showed that the improvement by applying Lean Six Sigma and tools (DMAIC, 5S, ECRS) reduced the inventory cost of by 2,323,600 Baht for Takara Planning Co., Ltd.
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