The Reduction of Inventory and Warehouse Costs for Thai Traditional Wholesale Businesses of Consumer Products

Abstract

Abstract This paper deals with the problems of inventory and warehouse costs for Thai traditional wholesale businesses in consumer products. The wholesale businesses of consumer products consist of a few hundred of suppliers and almost fifty thousand Stock Keeping Units (SKUs), which inventory and warehousing are not only costly but also hard to manage. This study's main objectives are to know the source of the high inventory and warehousing costs, and to find ways on reducing them. The study involves shop owners as respondents and uses observational study and interview for data gathering. This research also applies the concept of basic mathematical model for integrating all segments by applying Excel program in single window of purchasing, inventory, sales and marketing segments, which is decision maker. The data were then interpreted with the help of statistical tools. This research reveals that most of Thai traditional wholesale businesses lack knowledge and methodology for executing business by separating management of procurement and purchasing, inventory and warehouse, and sales segments. The result also shows that Thai traditional purchasing is decided more by feeling rather than facts. The high inventory and warehousing costs have occurred by purchasing, so sales and marketing can help to reduce inventory and warehouse costs. Therefore, if the integration of all segments is a single window management, then it becomes the best way for executing business.