inventory management of vinamilk

tài liệu được nhóm tác giả hướng dẫn xây dựng tiểu luận về thực trạng, điểm mạnh điểm yếu và phương pháp quản trị hàng tồn kho của vinailk dựa trên cơ sở thực tiễn bằng cách sử dụng các phương pháp như fishbone, lean 6 sigma, 5 why để tìm ra nguyên nhân gốc rễ của các yếu tố ảnh hưởng đến vấn đề tồn đọng của Vinamilk từ đó đưa ra hướng giải quyết

HCMC UNIVERSITY OF TECHNOLOGY AND EDUCATION FACULTY FOR HIGH-QUALITY TRAINING  COURSE: INVENTORY MANAGEMENT INVENTORY MANAGEMENT OF VINAMILK Ho Chi Minh City, November 2021 CONTENTS INSTRUCTOR’S COMMENTS CHAPTER 1: THEORETICAL BASIS OF INVENTORIES IN THE ENTERPRISE 1.1 Inventory - inventory management 1.1.1 Concept of inventory 1.1.2 Inventories in the enterprise 1.1.3 The role of inventory in the business 1.1.4 Classification of inventory 1.2 Enterprise inventory management .10 1.2.1 Business Overview .10 1.2.2 Inventory management in the Enterprise 10 1.2.3 Costs and planning in inventory management 13 1.2.4 Factors affecting inventory 14 1.2.5 Some models of inventory management 15 1.3 Risks in inventory management 17 1.3.1 Supply disruption .17 1.3.2 Variation in product quality 18 1.3.3 The company's ability to sell goods 18 CHAPTER SITUATION OF INVENTORY MANAGEMENT AT VIETNAM DAIRY JOINT STOCK COMPANY (VINAMILK) 19 2.1 Overview of Vietnam Dairy Products Joint Stock Company 19 2.1.1 About Vietnam Dairy Products Joint Stock Company 19 2.1.2 Functions, Objectives and Mission of the Company and each division of Vietnam Dairy Products Joint Stock Company (Vinamilk) .22 2.1.3 Current business situation 22 2.2 Actual situation of inventory management at Vietnam Dairy Products Joint Stock Company (Vinamilk) 24 2.2.1 Analysis of short-term and long-term assets of Vinamilk: .24 2.2.2 Classification of company’s inventory .26 2.2.3 Inventory management activities 26 2.2.4 Finished product warehouse production process 28 2.2.5 Vinamilk’s inventory management model .29 2.2.6 Arrangement of types of inventory 33 CHAPTER 3: GENERAL ASSESSMENT AND COMPLETE SOLUTIONS ON STOCK MANAGEMENT 35 3.1 Advantages of inventory management 35 3.3 Backlog problems and proposed solutions in the process of inventory management 36 CHAPTER INTERNET OF THINGS (IOT) .47 CHAPTER 5: INVENTORY AUDIT CHECKLIST 51 REFERENCE 55 LIST OF FIGURE Figure 1.1 Classification of inventory according to the ABC technique Figure 1.2 EOQ Model 16 Figure 2.1 Vinamilk's headquarters 20 Figure 2.2 Current situation as of December 31,2020 26 Figure 3.1 Feedback from customers about the condition of yogurt and milk because of mold when it is still within its expiry date 38 Figure 3.2 Fishbone Diagram 39 Figure 3.3 Group A 44 Figure 3.4 Group B 44 Figure 3.5 Group C 45 Figure 4.1 RFID Simulation 48 INSTRUCTOR’S COMMENTS Businesses play a significant part in the development of a country's total economy in today's economy Vietnam’s economy is presently opening up, generating a lot of net profit for domestic businesses to access new items and race their products overseas Vietnam's wide admission to the World Trade Organization (WTO) has created a very dynamic competitive environment for local companies, with numerous potential and significant threats To survive Domestic companies are being compelled to modify their management practices to enhance product quality, decrease product costs, and minimize manufacturing expenses to ensure their goods' competitiveness your company Currently, inventory management is regarded as a critical step in corporate governance, but it is not always recognized and given the attention it deserves in domestic companies in general and those in domestic enterprises in particular business, particularly in the dairy industry As a result, we chose to pick the topic “Inventory management at Vinamilk’s to gain a basic understanding of inventory management in a firm can make suggestions to increase the management's efficiency” CHAPTER 1: THEORETICAL BASIS OF INVENTORIES IN THE ENTERPRISE 1.1 Inventory - inventory management 1.1.1 Concept of inventory Inventories are items of product that a firm keeps for final sale, stocks that a company makes for sale, and the materials that go into the product In other terms, inventory is the total of all idle resources that are ready to be used in the future Raw materials, spare components, unfinished items, semi-finished products, and final products are examples of warehouse goods As a result, inventory is the connection between the production and sale of items, and it is a component of current assets, accounting for a significant amount of total assets, and it plays an essential role in the production and business of businesses Inventory is a list of goods and items that a company has on hand, or the materials and products themselves Inventory management may cut expenses and boost revenues for a firm if done correctly 1.1.2 Inventories in the enterprise a Definition Inventories are short-term assets that exist in physical form and can be weighed, measured, measured, and counted on a regular basis, such as: purchased tools but not yet put into use, finished products that have not yet been sold, etc goods purchased but put into use, raw materials in stock, goods in the process of production in progress, etc b Characteristics Inventories are part of the enterprise's short-term assets and play a significant role in the current assets of most businesses that engage in manufacturing and commercial operations Because the enterprise's inventory is derived from a variety of sources with varying liquidation costs, the original cost of inventory varies According to the VAS 02 accounting standard, inventories are calculated at cost; however, if the net realizable value is less than cost, it must be computed at the net value to be realizable The cost of gum inventory includes the acquisition, overhead, and other directly related expenditures incurred to bring the inventory to its current location and condition Inventories are actively involved in the Enterprise's production operations, in which there are regular and frequent transactions, through which inventories are always altered in terms of physical form and transformed into commodities Currently held assets (cash, work in progress, finished goods, etc.) Inventories in the Enterprise come in a variety of shapes and sizes, with varying trade item attributes and storage circumstances As a result, inventories are frequently kept and stored in a variety of locations, depending on the nature and score of each sort of inventory 1.1.3 The role of inventory in the business a Improve service level In the course of manufacturing and business, the Enterprise may be required to return sold items owing to poor quality or technical faults Enterprises might take inventory to make up for exports or provide the best value to their customers Choosing items based on demand helps to enhance the Enterprise's quality of customer service, establish a long-term commercial connection, and provide income for the organization b Reduce total logistics costs The administration of the transportation and storage of raw materials, manufacturing processes, completed goods, and associated information from the point of origin to the point of ultimate consumption at the request of the consumer It also covers waste collection in a broader sense c Responding to unexpected orders If the quantity is modest or pre-ordered, goods made or received by the firm are sold directly to customers at the company’s stores or distribution agents However, businesses will occasionally receive a few unexpected orders, huge orders that the firm would be unable to execute promptly Inventory assists firms in dealing with the problem of these unanticipated items d Selling seasonal items throughout the year Seasonal items are goods and completed products with a short shelf life (less than three months) such as food, food, animal products (such as milk, animal fat, and so on) that are available at a certain period Businesses gather a significant number of seasonal items during particular periods of the year that have not found a consumption point, and the pressure from the product's shelf life forces the firm to deal with it promptly Storing seasonal commodities and finished products after basic processing allows things to survive longer, resulting in greater consumption and fulfilling client demands for a longer period e Speculation waiting for price Speculation is the subject's conduct, which involves taking advantage of the market's decline to "accumulate" things and goods and profit once the market has steadied and benefit from the difference in prices the products that the speculator can manufacture or purchase on the market This move decreases the supply of the product in that market while without reducing the quantity sought Alternatively, demand will double as much as supply, raising the price buyers are willing to pay to get the item f Solve deficiencies in the system Normally, the corporation removes a tiny quantity of the completed product during the manufacturing and commercial processes In most cases, only a tiny amount of completed product is utilized in interviews (for the production process, business management, sales) In the event of a shortage, businesses can pull products from warehouses and maintain the flow of manufacturing, sales, or company management systems 1.1.4 Classification of inventory a Inventory classification based on usage This criteria groups inventories with the same goal of usage, regardless of their source, specification, or quality As a result, the enterprise's products warehouses are classified as follows:  Inventories reserved for production: these are all inventories that are held to be used directly or indirectly in manufacturing operations, such as raw materials,  semi-finished products, tools, and unfinished goods Inventory reserved for consumption: represents all inventories held for commercial sales, such as items, finished products, and so on This classification assists in the proper use of corrugated iron while also creating favorable conditions for managers in the process of planning, predicting purchasing, preserving, and stocking inventory, ensuring timely supply of inventories for production and consumption with the lowest purchasing and preservation costs to improve the efficiency of enterprise production and business activities b Classification of inventories by origin According to this criterion, inventories of the same origin are classified into a group, regardless of what type, specification and quality are used Accordingly, inventory in the enterprise is divided into:  Inventory purchased, including:  Goods purchased from outside are all inventories purchased by the enterprise from suppliers outside the business organization system of the enterprise  Internally purchased goods: are all inventories purchased by the enterprise from suppliers in the business organization system of the enterprise such as purchasing goods between units affiliated to the same company  Self-processed inventory: is the entire inventory that is produced and processed by the enterprise  Inventory imported from other sources: such as inventory imported from a joint venture This classification helps to identify the constituent elements in the original cost of inventory, in order to correctly and fully calculate the original cost of inventory according to each source of formation Thereby, helping enterprises assess the stability of the source of goods in the process of planning and estimating inventory At the same time, the detailed classification of inventory purchased from outside and purchased internally helps to accurately determine the value of the enterprise’s inventory when preparing the Consolidated Financial Statements c Sorting inventory based on use needs According to this criterion, inventory is divided into:  Inventories used for production and business: reflect the value of inventories that  are reasonably stored to ensure normal production and business activities Unused inventory: Reflects the value of highly stocked inventory than reasonable  reserves Unused inventory: reflects poor or degraded inventory that is not used by the enterprise for production purposes This classification helps to assess the reasonableness of inventory, determine the object to make provision and the level of provision for devaluation of inventory to be made d Classification of inventory by storage location According to this criterion, inventory is divided into:  Inventory in the enterprise: represents the whole inventory kept at the firm, such as items in stock, counters, tools, materials in stock, and being utilized  MACHINES Problem  The machine system is broken Why? The machine’s maintenance period is over Why? Staff not regular maintenance Why? Unequal division of work Why? Lack of human resources Why? The prolonged Covid epidemic made employees unable to go to work In addition, Directive 16 makes traveling for employees to pay an additional fee for Covid testing every days Solution: Create free accommodation for workers, partially subsidize living expenses for employees with difficult circumstances, etc Besides, it is also advisable to increase wages for employees to create motivation to work  ENVIRONMENTS Problem  Inefficient working environment Why? Employees work slowly, bored Why? Employees are not motivated to work Why? Employees find their work uninteresting Why? Conflict between some employees in salary, bonus, overtime, Why? Lack of transparency and fairness from superiors in the working environment 41 Solution: Publicize and share accurate and timely information Allow open, frank communication between boss and employee Employees have the right to freely speak and share opinions Evaluate employees according to their capacity, publicize the evaluation results clearly in the reward and punishment mechanism, remuneration regime, etc  MEASUREMENTS Problem  Inaccurate measurement Why? Some products may be damaged Why? Employees steal and bring products outside Why? Security staff and warehouse workers cooperate with each other to cause product loss at the warehouse Why? The security control system through surveillance cameras also reveals many limitations Why? The camera’s viewing angles are not covered, there are still many dead angles Solution: There should be timely handling measures First of all, must discipline cases of fraud (Punish by deduction of salary, possibly dismissal if the stolen property is too large ) Then, administrators should install more cameras in the areas where the old camera has not been observed to be able to monitor Supervisors should regularly check the camera and the quantity of goods in the warehouse  METHODS  The method of classifying goods is not optimal Why? Because the company merely classifies goods according to the supply chain such as raw materials, semi-finished products and finished products, but has not classified for raw materials and ingredients which types account for the highest proportion, average proportion, or lowest percentage 42 Why? Managers have not properly allocated resources to inventory, which items have high value, which items are large but profits are not high Why? The ability of managers is limited, applying the wrong method Solution: Managers should research and learn some other methods In addition, applying the ABC classification method in combination with the supply chain will create superiority in Vinamilk’s inventory preparation ABC analysis method We can apply ABC logic to both past and forecasted volumes sold, either by Value or Quantity This is the curve we get with group A being the most important group in terms of value to the company, while group C items having the least value based on sales and situation for each period classified accordingly, namely: Source: Vinamilk Figure 3.3 Group A Group A usually accounts for only 10-20% by quantity but accounts for 50-80% of the value: these are liquid milk products because this is an affordable item that is suitable for most Vietnamese people to buy at a reasonable price delicious taste contains many nutrients, suitable for most ages but also cost-effective Especially during the Covid epidemic, the demand for this item increased to go to relief for people and patients 43 Source: Vinamilk Figure 3.4 Group B Group B has more items than group C but less than group A, with a higher value than group C but much less than group A: that is, rice yogurt and condensed milk, which are consumed in The level are high but lower than that of group A due to the difficulty of storing after opening the box if there is no refrigerator 44 Source: Vinamilk Figure 3.5 Group C Group C contains 60-70% of items but only 10-30% of the value is powdered milk products, because of the high cost, moreover, there are many other powdered milk brands in the market with nutritional value higher maintenance From there, managing Vinamilk’s inventory according to specific product priorities to reduce costs on items that not bring high value, managers can focus their time on products other valuable products adjust their inventory control policies accordingly The ABC model operates in such a manner that it directs top attention to the vital or few significant elements while ignoring the unimportant or numerous minor objects There is a distinct management control in place for each group This priority attention and concentration is important for keeping costs under control across the supply chain system It is critical that high-cost products receive adequate managerial attention for the greatest results  Improve 45 Maintain, build and strengthen the dealer's facilities to meet the needs of goods and preserve goods Improve expertise, train engineers and workers to have optimal methods to help eliminate backlogs from the above measures Improve and strengthen relationships with customers  Control  Vinamilk does not leave omissions and bad incidents that affect the brand  The production and packaging process takes place optimally, the machinery systems work at full capacity  100% standard output quality for export  Safely transport to people's hands in the most intact way  Customers' trust is fully placed in Vinamilk 46 CHAPTER INTERNET OF THINGS (IOT) Currently, Vinamilk is using WAMAS WMS software to monitor and manage inventory with benefits such as: Quick and precise delivery Control the material's internal flow and guide personnel through operational procedures Ensures that storage space is used optimally and that items are moved at a fast rate Incorporate all processes and warehouse data into a command and control center Reduce operating costs Increased inventory visibility However, in this day and age, when customer interest in online buying is increasing To enable e-commerce omnichannel retail, consumers must have real-time precise information on the status and availability of products for purchase This is crucial because it reduces out-of-stock situations, improves customer service, and supports regulatory compliance Traditional supply networks are not built to handle high numbers of small customer requests for quick delivery Manufacturers, merchants, warehouses, and logistics companies are all trying to meet these demands When customers are dissatisfied with their purchase or delivery experience, they are not hesitant to express their feelings about the business on social media News travels rapidly Companies are changing processes, human requirements, and technology to suit the demands and expectations of demanding consumers as a result of this and the fickleness of consumers 47 To address this, the authors suggest RFID-based IoT-oriented inventory management The use of IoT provides several benefits to the organization, including: In contrast to barcode scanners, which can only read one product at a time, RFID scanners can detect numerous goods within their range In addition, unlike barcodes, there is no requirement for personnel to scan the tags and record individual information RFID-enabled warehouse solutions simplify and automate the whole process Source: Goodwin Figure 4.1 RFID Simulation 48 RFID's Operating Principle  Goodwin RFID pallet tags are perfect for tracking the position of wooden and plastic pallets The authentication card is constructed of water-resistant plastic Anything may be categorized, monitored, and recognized since the tags are stuck to pallet objects with 3M glue At the same time, it provides a good view of the product being transported by the pallet as well as its location in the warehouse RFID (Radio Frequency Identification) pallet tags are connected to the pallets, and an RFID reader is put at the warehouse's entrance —- The tag data will be read when the pallet goes through the reader  When products enter and exit the warehouse, an RFID reader reads the tag  information and uploads it to the system Pallet sorting ensures that the information on the pallet and the label on the pallet  are the same When the products arrive at their destination, the RFID reader on the forklift can identify the pallet classification and arrange them in the proper location  automatically Handheld readers can be used by warehouse employees to find, stock, and sort items Benefits of using RFID     Reducing work hours, which results in a 5% to 40% reduction in labor expenses Human error is reduced, resulting in less data bias and more efficiency Returns caused by improper product delivery are significantly minimized Automatic product monitoring keeps consumers up to date on the status of their orders The more an inventory manager understands their warehouse, the more probable it is that the correct products will be in the right places at the right time In due course Manufacturers may minimize inventory while fulfilling consumer demand at the end of the supply chain by using real-time data on the amount and  position of inventory items Threats of theft and disappearance are decreased as a result of real-time tracking 49 Warehouse employees can rapidly establish where merchandise is stored and refill it proactively, all while keeping track of the amount of pallets at each stage - As a result, stock control becomes a real-time activity Traditional tags and barcodes can be tampered with and cause harm due to wear and tear RFID tags, on the other hand, are very sturdy and long-lasting 50 CHAPTER 5: INVENTORY AUDIT CHECKLIST The audit checklist is regarded as a valuable management tool that aids in the smooth and timely execution of the inventory control process An audit checklist also assists the person in charge in avoiding omitting or doublechecking an audit problem Furthermore, the Audit checklist assists the implementer in defining the specifics of what to look for, how to quantify the outcomes, and how to document the evidence during the audit Vinamilk may also determine if the planning, monitoring, and control system of daily activities have been completed successfully or not to analyze risks and regulate the inventory process more closely and optimally can bring about high levels of productivity Description Needs determination function Is the system capable of recording customer demand and replenishment lead time data for years, analyzing the data for abnormalities, and calculating demand and lead time projections on a regular, frequent basis? These should be evaluated on a frequent basis by inventory managers, however computergenerated projections should typically be altered only when the manager has knowledge that the automated system does not have Is the system capable of calculating and frequently updating the ordering costs, which may vary based on the method of procurement and other factors? The ordering expenses might comprise the costs of: assessing the stock position; drafting the buy request; selecting the supplier; receiving, inspecting, and storing the item; and paying the vendor through the automated system 51 Yes Explanation Is the system capable of estimating and updating the per unit inventory holding cost, which is an estimate of the cost to store each new unit of inventory? Storage space, obsolescence, interest on inventory investment, and inventory shrinkage (due to deterioration, theft, damage, and so on) are its major components provide your approval to the automatic mechanism Is the reorder point level recalculated on a regular and frequent basis, taking into account stock available for issue, backorders, quantities on hold, and quantities due in? Is the system capable of providing information on current inventory and past consumption for capacity planning? Inventory in storage function Is information about material returned by consumers recorded in the system? Is there a distinction between partial receipts and complete receipts against an undelivered order in the system? Is it possible for the system to track goods in transit and the amounts of each if title to inventory items moves at the place of origin? Is the system capable of recording identities, quantities, conditions, location, and other elements required to create physical control? Is the system providing the information required to allow reconciliation between the inventory system's records and the records of other systems? Is the system capable of providing at least the following sorts of management information:       Unfulfilled orders? Inconsistencies? A summary of acceptance and rejection? How many days supply? Inventory master? Dormant stock? 52  Item expiry date/shelf life?  Does the cycle count?  Inventory precision? Inventory undergoing repair or in production function Is it possible for the system to record the transfer of an inventory item from its present state to "in repair" status? Does it send data to the main financial system to reflect the change in financial category? Is the system capable of calculating the expenses of repair activities? Is the system capable of converting work-in-process to finished items for inventory classification and accounting purposes? Is the system capable of classifying inventory items by commodity class or type in order to satisfy the demands of the agency for management and control? Inventory disposition function Is the system capable of categorizing inventory items by commodity class or type in order to satisfy the demands of the agency for management and control? Is the fund citation given by the client recorded in the system so that it may be included on billings? Is the system capable of determining and recording the value of a client order? Is it possible for the system to record confirmation of receipt of the items by the disposal organization? Program planning and monitoring function Program planning and monitoring function Is there a mechanism to allow pricing by groups or commodities of products in the system? Is there quality control over the pricing model's input data to verify that all necessary expenses are included and are accurate? Is there a way in place for the system to preserve the net realizable value of inventory items? 53 54 REFERENCE https://www.vinamilk.com.vn/static/uploads/documents/bctc/1614600482_BCTC_rieng_ 31.12_.20_-_VN-FN_.pdf https://finance.vietstock.vn/VNM/tai-chinh.htm https://www.vinamilk.com.vn/dinh-duong-organic/vi/ https://kiemsat.vn/vuot-qua-lan-song-covid-19-doanh-thu-quy-ii-2021-cua-vinamilk-lapdinh-moi-62072.html https://www.vinamilk.com.vn/vi/bao-cao-thuong-nien https://www.vinamilk.com.vn/static/uploads/bc_thuong_nien/15852915967f525505f3621558355a60c10f6862cbb3b9c9863921a9b06587f7b42a0f9733.pdf https://thitruongtaichinhtiente.vn/doanh-thu-cua-vinamilk-tang-truong-on-dinh-ca-thitruong-trong-nuoc-va-xuat-khau-33309.html http://bestlife.net.vn/index.php/tieu-dung/vinamilk-gay-that-vong-khi-san-pham-lai-gapsu-co-moc-den-khi-van-con-hsd-2162.html https://www.gwrfid.com/smart-pallet-tracking/ 55 ... Advantages of inventory management  First, let’s look at Vinamilk? ??s inventory management operations Inventory management efforts at Vinamilk are closely coordinated and flexible across divisions Inventory. .. Stock Company (Vinamilk) 24 2.2.1 Analysis of short-term and long-term assets of Vinamilk: .24 2.2.2 Classification of company’s inventory .26 2.2.3 Inventory management activities... Vietnam and having its head office in Vietnam 1.2.2 Inventory management in the Enterprise Inventory management is the management of resources to maintain appropriate inventory levels to meet production