Optimization of Rice Supply Chain in Thailand: A Case Study of Two Rice Mills

Abstract

Two rice supply chains in Thailand were analyzed: (1) a rice mill located in the harvesting area(Northeast),and (2) arice mill in the marketing area (CentralThailand). Parameters such asostminimizationwhile the paddy was on the farm and in-transport were taken into account. The high production cost and logistic cost were the weak points of the rice supply chain in Thailand. The rice mill in the marketing area was high in cost of transportation and inventory.Higher income from by-productswas found in themarketing area. Therefore, the net revenue of rice mills in the marketing area was higher than in the harvesting area. Quality indicators such as moisture content were used to relate to the transportation cost. The transportation cost increased with the high moisture content of paddies which depends on volume, type of vehicle and distance of transportation. The best operating condition was drying at 60◦C for 2 hours that gave a head rice yield of about 38.5% for Thaiaromatic rice (KDML105). The optimum model showed highest net revenue fromfarms that use direct seeding cultivation, a combine harvester and sun drying. Theoptimization model for rice purchasing for a rice mill showed that high moisture and a dry paddy was beneficial for the rice mill in the harvesting and marketing areas, respectively. The optimized model proposed a traceability system using a radio frequency identification (RFID) system to track information such as source of production, cultivation practice, logistic system, quality of paddy and milled rice in compliance with the Good Agricultural Practice (GAP) regulations in Thailand.