The Improvement of Automotive Spare Parts Distribution from Manufacturer Countries to Distributors in South East Asia

Abstract

This research aims to improve and develop an appropriate products delivery and distribution and to reduce delivery lead time from 4 manufacturer countries of automotive spare parts, with insufficient order to fulfill the container, to distributors in South East Asia. Nowadays, Full-Container-Load (FCL) delivery was operated from manufacturer countries to distributor countries. The distributors have been waiting for 6-9 months starting from placing order to receiving goods at destination port. It caused loss in selling opportunity because the customers cancelled the order due to too long waiting time. The result showed that to set up distribution center at Thailand Free Trade zone, to consolidate products from many manufacturers and the deliver to distributors in various countries, can reduce waiting period for about 30%. Although the total delivery and distribution cost is higher about 115% but the customer comments revealed that the delivery and distribution efficiency development can raise total sale up to 30% and net profit increased 0.41%. More advantages are less inventory for distributors, longer product life, higher service level in overview, higher customer satisfaction, higher competition ability, and better company image and reputation leading to customer confidence.