Inventory Management to Reduce Product Administration Costs and Design Improvement of Packaging to Reduce Shipping Cost: A Case Study of AAA Company Limited

DOI: 10.14416/j.ind.tech.2024.04.001

Abstract

AAA Company Limited operates a tutoring school business with branches across the country. The past COVID-19 pandemic situation has led to changes in consumer buying behavior, with fewer in-store purchases and increased online shopping. The company, therefore, decided to transform its book order and delivery system into a 100% online operation, a shift from the previous method of selling and receiving books mainly in stores. With this change, the researchers identified problems with inappropriate packaging for delivery and found issues of a large amount of unsold inventory, affecting the cost of storage, and issues with outdated products. The purpose of this research is to reduce the cost of inventory, and the cost of outdated products, as well as to reduce the shipping costs and improve the packaging used for shipping parcels. The results from using SWOT Analysis and TOWS Matrix for strategic planning, with an example of the top 5 selling products, showed that operational and inventory costs could be reduced by more than 11,056,738.81 baht. This budget can be allocated to the development and improvement of other processes. Furthermore, using the ABC Analysis theory to manage product categories could reduce storage costs by 433,616.04 baht/year and also reduce the cost of ordering additional books by 733,595.71 baht in the year 2023. In addition, the holding cost can be saved 55,621.29 baht/year. Using weight dimensions as a principle in packaging design can also reduce transportation costs by 379,762 baht per year, and adjusting packaging quality can reduce costs by a total of 459,718.60 baht/year.