Siam CementsProceedings of the Eastern Asia Society for Transportation Studies, Vol. 5, pp. 1673 - 1686, 2005
EVALUATION OF THE DECENTRALIZED PLANT DISTRIBUTION SYSTEM IN THE LOGISTICS OF THAI CEMENT
Pairoj RAOTHANACHONKUN Graduate Student Department of Civil and Environmental Engineering Nagaoka University of Technology 1603-1 Kamitomioka-machi, Nagaoka, Niigata, 940-2188, Japan Fax: +81-258-47-9650 E-mail: firstname.lastname@example.org Shinya HANAOKA Assistant Professor Transportation Engineering School of Civil Engineering Asian Institute of Technology P.O. Box 4, Klong Luang, Pathumthani, 12120, Thailand Fax: +66-2-524-5509 E-mail: email@example.com
Abstract: Siam Cement Public Company Limited (SCC) faced stiff competition after the economic crisis in 1997, decided to close most of their warehouses for the change of logistics system. SCC presently operates five cement plants located whole regions in Thailand with except of the northeast region where three warehouses are still operated. This plant distribution system can be called the decentralized plant distribution system. Which plant distribution system is more efficient for SCC as the logistics strategy between centralized and decentralized? Based on this background, total logistics costs of both systems are formulated and calculated. In addition, the locations of a single warehouse without plant operation are evaluated using linear programming to minimize total logistics costs, which calculated with and without environmental cost. The results of calculation showed that transportation cost was the most significant cost of the plant distribution system and a decentralized plant distribution system is more efficient. Key Words: Total logistics costs, Decentralization, Plant distribution system, Warehouse location, Environmental cost 1. INTRODUCTION Siam Cement Public Company Limited (SCC) was the first cement manufacturer in Thailand established in 1913 and produced cement for more than 40 years (TDRI, 2003). Cement...