Distribution center exercises a concept of a centralized organization that stores
and distributes goods to the customers or to other distribution centers. The distribution
center is scoped larger than a warehouse where it does not only store the products but it
adequately supplies to the demands using logistics and supply chain management
systems. The function raises the potential of the industries by not only saving the
logistics cost of the factories but managing the resources more effectively.
2.2 Tak’s Industrial Estate and Its Feasibility
Tak’s industrial estate feasibility study by CMU is soon reaching its conclusion
(late 2006). The period of 9 months with extensive analysis lead to an interesting
however rather disappointed result. Whilst the estate holds a great expectation locally
and nationally, the estate does not possess very well to that level of expectations.
Conclusively, the estate is barely feasible.
o Marketing-wise, both primary marketing survey and secondary data analysis
leads to one conclusion that Tak’s industrial estate exceedingly lacks of the
marketing potential. The study is indicative that the prospective investors are
not interested in industrial estates that locate outside Bangkok and its peripherals
and the existing industrial metropolitan area. Realizing that Tak lies on the
economic East-West corridor, the location advantage is not yet distinctive. It is
therefore restrain local investors (comparatively less capital) to invest likewise.
Here, of the industrial estate itself, locating 512 kms to Bangkok, the logistics
cost alone is tremendous.
o The financial feasibility study is barely feasible likewise whereas the main
income of the estate from the land rental alone is not break-even. (Initially, land
sale is out of consideration.)
o However, on the engineering and management points of view, the estate is
feasible. The engineering and management parts can be practically organized to
2.3 Processes
The main function of the distribution center for Tak’s industrial estate focuses
on the outbound Logistics distribution, nationally and internationally. The scope of the function
might be enlarged whilst the estate is occupied more and more services needed.
However, initially, the distribution center must not play role of only an in-plant
warehouse (general merchandise and refrigerated goods) but also the function of the
distribution which must link to the national logistics system (both aviation and truck system).The activities typically required on the distribution center are receiving, storing,
picking and shipping under the well-structured information and material flows (the
process of repackaging is optional). It is also suggestive from locals that the
services of distribution center should include one-stop service, warehousing, container
rental, cold room rental and repackaging services.
There are interesting advices suggestive to any establishment of the distribution
center as it should implement the high-technologies, for example RFID, realtime/online
warehousing and logistics system. Therefore, these should be taken into
consideration should any distribution organization provide these high technology and
well-organized and supportive operations. address the needs (as long as the project is funded sufficiently). These two issues are not in concerned.
2.4 Distribution Center Conceptual Design
The conceptual design here is highly dependent to the functions, the available services and the storing/distributing capacity of the center. However, for information known at present, of the current trading, without the industrial estate, the figure of 250 trucks per day, transporting in Mae Sot, Tak, alone, reflected the massive logistics system already. It is to be noted that the number may add up twice or triple if the industrial estate is run full-scale. Here, an area of as large as 200 rais may be needed. An estimation of the 2,000-rai industrial estate may require an area sized 2,000 sq.m. for establishing a distribution center building (warehousing, truck loading/uploading) and the rest is for truck parking area. The investment of the distribution center alone might cost more than 400 million baths. The figure known here could lead to a decision point for the distribution organization on the size of the distribution center to accommodate such operations.