Increasing Efficiency of Transportation Cost Management and Selection of Outsourcing Transport Service Providers Using Lean Principle

Abstract

This article aimed to present a case study to determine the guidelines to reduce transport cost and to shorten the operational process to achieve an efficient manner. This study also investigated related factors and presented the guidelines for evaluating and selecting outsourcing logistics service providers using the cause and effect diagram as well as the analysis of the waste-inducing process. The results showed that import-export agents had insufficient number of vehicles to meet the demand. Therefore, the operator outsourced transport service provider, causing higher transport cost. Besides, the operator faced complex transportation price negotiation due to fluctuating oil price. The working methods of outsourcing logistics service provider’s drivers caused delayed and wrong delivery, accident incidence during transportation, and the customer’s claim for wasting time in waiting. Therefore, it is important for increasing the efficiency of transport cost management and the selection of efficient outsourcing logistics service provider. The researcher focused on backhaul transportation concept, lean concept by applying the ECRS principle and preparing an QCDS principle-based assessment to increase the number of vehicles to serve customers, reduce transportation cost, time, work procedures, and problems caused by outsourcing logistics service provider’s driver in order to increase organizational efficiency.

The results of this study indicated that after adopting the backhaul concept to solve the problem, the transportation cost decreased by 705,000 baht/ 9 months, the car utilization increased by 20.83%, and the outsourcing demand decreased by 273 trips / 9 months. The fluctuating oil price problem caused complex work process. The problem could be solved with the ECRS principle. After implementing this principle, work steps could be reduced from 8 to only 3. The working time was reduced by 960 minutes. And there is a systematic Outsourcing Assessment which will affect the workload and the proportion of employment of the company. In order to improve the efficiency of the Outsourcing company. The result after evaluation makes it possible to reduce the waiting costs that customers charge by 992,500 baht / 9 months.