Improvement of space allocation by reducing the stock outside situation in the new warehouse of Toyo Ink Compounds Corporation, Carmelray Industrial Park I, Canlubang, Calamba City.

Date

4-2010

Degree

Bachelor of Science in Industrial Engineering

College

College of Engineering and Agro-Industrial Technology (CEAT)

Abstract

Toyo Ink Compounds Corporation (TICC) is a manufacturing company known for their products like colored plastic pellets, plastic colorants, and plastic compounds applied to different electronic and automotive parts, appliances, and others. The company has two large areas for storing items Old Warehouse and New Warehouse. Old Warehouse is a storage area for the finished goods, while New Warehouse is a storage area for the raw materials. PS resin, ABS resin, Xyron resin, Xyron additive, PP/PE resin, Additive, and Slow-moving items are the raw materials stored at New Warehouse. When a shipment of raw materials from the supplier comes, a forklift operator is responsible to bring them inside the New Warehouse. Raw materials are assigned to their designated columns with space limits. When they exceed the space limits, excess raw materials are placed on the aisle. As a result, stock outside occurs. Stock outside refer to those items that are placed outside the designated columns, because they go beyond the maximum quantity that their assigned columns can hold. In order to solve this problem, the main objective is to improve the space allocation by reducing the stock outside situation in the New Warehouse. The causes for the occurrence of stock outside were identified through the use of Streamline Diagnostic Chart. The factors detected were the following 1) Maximum space limit was assigned for each material and 2) Stacking was limited up to three pallets high. The cause needed to be evaluated was the maximum space limit assigned for each raw material. There was no action to be done for the other cause, which is the stacking limit. The stacking height cannot go beyond 3 pallets , because accidents may occur, and the management is concerned with the safety of the workers inside the warehouse. Four alternatives were presented in order to solve the problem. Alternative A was to set new limit for raw materials based on the average number of pallets. The average values of the raw materials became the proposed maximum space limits. Alternative B was to set new limit for raw materials based on the highest actual number of pallets. The highest actual quantities of raw materials were established as the proposed maximum space limits. Alternative C was to set new limit for raw materials based on both average and highest actual number of pallets. The average and highest actual values of the selected raw materials were the proposed maximum space limits. Alternative D was to locate the raw material on any column, given that the column is occupied entirely by one item only. It differed from the first three alternatives , because no designation of locations and no maximum space limits were implemented. Factor-rating method was used to come up with the best alternative. The alternatives were evaluated based on the frequency and the range of stock outside. Each critical success factor was given a weight of 50%. Monte Carlo Inventory Simulation was used to determine the quantity of stock outside for each raw material per day. The one with the lowest frequency and range was selected as the best alternative. After running the simulation in Alternative A, all raw materials encountered the stock outside situation using the proposed space limits. Alternative B was not feasible because the proposed maximum space limits cannot accommodate the total quantity of all raw materials inside the warehouse. In Alternative C, there were occurrences of stock outside in the raw materials excepts PS resin and PP/PE resin. In Alternative D, there was an occurrence of stock outside in PS resin. Based on the evaluation, Alternative D had the lowest stock outside among the four alternatives. Therefore, Alternative D was recommended, since it greatly reduced the stock outside situation in the New Warehouse.

Language

English

LC Subject

Industry analysis, Decision making--Case studies

Location

UPLB College of Engineering and Agro-Industrial Technology (CEAT)

Call Number

LG 993 2010 E66 E83

Document Type

Thesis

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