OPERATION MANAGEMENT MIDTERM REPORT introduction about yakult

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS AND FINANCE OPERATION MANAGEMENT MIDTERM REPORT Lecturer: Mr Do Sy Hoang Course: MGT1127E Members: Pham Thi Thanh My Tran Tam Nhu Vo Nhu Quynh Nguyen Thao Phuong Nhi Hoang Thi Yen Nhi Ho Chi Minh City, 2022 MEMBERS’ EVALUATION % contribution of the No Full name Student ID Tasks task to the overall task Result evaluation Pham Thi Thanh My 195080461 Chapter 20 G Tran Tam Nhu 195081746 Chapter 20 G Vo Nhu Quynh 185080767 Chapter 20 G Nguyen Thao Phuong Nhi 195082530 Chapter 20 G Hoang Thi Yen Nhi 20 G 180090120 Chapter TABLE OF FIGURES Introduction about Yakult 1.1 History Yakult fermented milk first appeared on the market in 1935, as a result of research by Professor Minoru Shirota and colleagues on the transfer of Lactobacillus casei Shirota (L.Casei) strain into a drink direct Combined with micronutrient isoflavones in soy, this product brings many benefits to the human immune system, and digestive system, preventing breast cancer Figure 1.1: Dr Minoru Shirota - the founder of Yakult in Japan Source: https://www.yakult.co.in/yakult-LCS.php Up to now, Yakult fermented milk has officially been available in a total of 38 countries, including Vietnam In 2007, Yakult Company started doing business in Vietnam and in 2008, the plant of Yakult Group in Binh Duong has officially come into operation Figure 1.2: Yakult’s overseas network Source: https://www.yakult.co.in/worldwide.php 1.2 Products Yakult Yogurt is a fermented milk drink made from skimmed milk powder, sugar, water, and a strain of Lactobacillus casei Shirota Each bottle of Yakult contains more than 6.5 billion L.casei Shirota bacteria Unlike other strains of bacteria; L.casei Shirota bacteria are resistant to gastric juice and bile entering the intestine; supporting restoring the balance of intestinal microflora and increasing resistance 1.3 Business philosophy According to the Shirota theory of Professor Minoru Shirota - the father of Yakult, he emphasized "prevention is better than cure" and "a healthy gut leads to a long life" With those two guidelines, Yakult is manufactured containing billions of L.casei Shirota bacteria - becoming a product beneficial to everyone's health at a reasonable price This is also the business philosophy and this still continues with the aim of the Yakult Group to this day (Yakult Cooperate, 2020) 1.4 Distribution system Currently, the company is distributing products through two main channels The first channel is through supermarkets and retail stores The second one is through the Yakult Lady system - a home delivery system that is currently available in Ho Chi Minh City, Binh Duong, Bien Hoa, Hanoi, Hai Phong, and Da Nang Departments in Yakult’s factory and functions of those departments Yakult’s factory has departments which are the seed room, culture mixing room, quality control room, bottle-making room, filling room, and packing room 2.1 Seed room The seed room is used to multiply and breed the bacteria Lactobacillus casei Shirota, which is an exclusive strain of Yakult imported directly from Japan every to years In order to ensure quality during transportation from Japan to Vietnam, the bacterial strains will be in freeze-dried form Therefore, before the breeding process, engineers need to recombine them in the quality control room and bring them back to the seed room This step helps to increase the number of bacteria many times, helping to serve the production process within to years The ingredients used in the process of breeding are skimmed milk powder and Glucose First, milk and sugar will be dissolved and pasteurized at a temperature of 120 degrees Celsius After being pasteurized, they will be put into a tank to ferment at 37 degrees Celsius - equal to the temperature in the human body The engineer then inoculates the bacteria from the outside into the fermentation zones However, before transplanting, engineers will light an alcohol lamp flame on the mouth of the tank to prevent other bacteria Bacterial fermentation will take place within 24 hours, if the bacteria are in sufficient quantity as desired, the engineers will lower the temperature (about degrees Celsius)in the set to inhibit these bacteria from fermenting 2.2 Culture mixing room This department has an important role in the production of Yakult milk The ingredients used in this room are also skimmed milk powder and glucose Milk and sugar first will be dissolved with water, then this mixture will be transferred to a UHT sterilizer for high-temperature sterilization and then transferred into milk-fermentation tanks After the milk is transferred, the temperature in these tanks is lowered to about 37 degrees Celsius, the Lactobacillus casei Shirota bacteria from the first room will be led into these tanks through a pipeline system In this stage, the fermentation takes place Milk fermentation lasts for several days; and after fully fermenting, the milky liquid will have a layering phenomenon, which is lumpy and very sour to drink To overcome this issue, engineers will lead the liquid through a homogenizer to finely grind the milk, then it is transferred to a tank containing white sugar to create a natural sweetness for the fermented milk Finally, the milk will be passed through the filling area At the end of this stage, the engineers will conduct tests to check whether the number of microorganisms, acidity, sweetness, and solubility of the milk have met the standards If the milk has met the standards, it will then be cooled in the cooling system to be ready for the next step 2.3 Quality control room The Yakult factory in Vietnam always maintains production with the highest quality standards, applying strict standards, ensuring to bring the best quality products to consumers The quality control department is the place to check the quality of Yakult milk from the input of raw materials to the finished milk in the most strict manner, applying the HACCP quality management system standard, ISO 22000 A large number of tests will be conducted in this room to check the Lactobacillus numbers, acidity, potential contaminants, and taste to make sure the products have met the standards In some cases of force majeure, if there is a problem with the production line and it is forced to stop halfway, the last bottles and the first bottles that are being produced will all be sampled by the quality control department to see if there are any problems If the criteria are met, the engineers then proceed to pour it into the bottle In this stage, each ingredient is weighed and measured in a certain ratio, ensuring the similarity in taste between the products 2.4 Bottle-making room The main material of Yakult milk bottles is polystyrene plastic imported from Japan Each bottle-making machine will suck polystyrene plastic beads from storage into the machine and melt at high temperature and form into squares and clamp into Yakult bottle molds After that, it will automatically be transferred by conveyor belt through a large sterile tank and then continue to move directly to the filling area 2.5 Filling room The filling room has two operating lines with a guaranteed temperature from 20 to 25 degrees Celsius, after the bottle is transferred to this room, it will be printed on the expiry date, the production date as well as the information of the product and then filled with milk Normally, in one hour, about 45000 bottles of milk are filled, and each bottle contains 65ml of milk These milk bottles are then capped and then moved to the packing room In the filling system, there is a sensor to check if the lids are carefully closed or not If an error happens, it will be pushed out of the production line There will always be engineers in this room to check whether Yakult bottles are printed and capped properly; the products that are not qualified will be removed from the line 2.6 Packing room In the packaging area, the products will be packed twice The first time the machine will pack bottles in a batch, covered with a plastic film imported directly from the Japanese company The batch is then moved through a dryer with a temperature of 160 degrees For the second time, it will be transferred through a scraper of 10 batches into a PE plastic carton of milk, then moved to cold storage from to 10 degrees Celsius Finally, the products will be kept for about a day or two to check their quality before being distributed to consumers Overall, we have the Yakult production process as below: Figure 2.1: Yakult production process Source: https://www.yakult.co.in/yakult-LCS.php Step 1: Prepare ingredients including glucose, skimmed milk powder, and white granulated sugar Step 2: Dissolve skim milk powder with glucose and white sugar in hot water Step 3: Use a high-temperature sterilizer to get pasteurized milk or pasteurized sugar water Step 4: Inoculate Yakult yeast into a pasteurized milk bath and ferment it for a few days After the fermentation time, the fermentation tank contains billions of live bacteria and at this time, the milk in the tank is thick This milk mixture is then homogenized Step 5: Yakult yeast culture tank: L.casei Shirota bacteria that were activated and cultured in the experiment were inoculated into the tank and then incubated to form Yakult yeast Next, Yakult yeast is used to inoculate the fermentation tank Step 6: Homogenizer: The milk after being raised is passed through the homogenizer to become homogenized fermented milk and then transferred to a large tank containing sterilized sugar solution Step 7: The storage tank contains the pasteurized sugar solution: Next, the homogenized fermented milk is transferred to the storage tank and stirred with sugar water to form semi-dairy products Step 8: Water treatment system Step 9: Sterilized water tank Step 10: Mixing device: The task of this device is to neutralize the sour taste of the product when fermenting, besides, sugar will be a source of nutrients to provide L.cases Shirota bacteria and this bacteria will live for a long time use Step 11: Polystyrene plastic bottles are produced at the factory by a bottle-making machine, then the polystyrene resin particles imported directly from Nhat Ban are heated and molded into Yakult bottles And then transferred to the bottle storage tank to prepare for the next process Step 12: Bottle making Step 13: Bottle storage Step 14: Bottle stacking Step 15: Expiry date and product information printing Step 16: Milk filling machine, aluminum capping Step 17: 5-bottle packing machine: The product is packed bottles into block of polypropylene 10 Step 18: Complete packing machine: Pack 10 packs into carton of polypropylene Step 19: Cold storage is the place to store the final product within to days with a temperature below 10 degrees Celsius Before the product is distributed to consumers, the product quality will be re-checked Step 20: The refrigerated truck will deliver the products to the distribution units Quality standards that Yakult aims to achieve Quality standards are agreements that include requirements, characteristics, or other specific criteria that can be applied consistently to ensure that materials, products, and processes are fit for their intended purpose In general, they improve the reliability and effectiveness of goods and services used around the world Figure 1.1: Principle of Quality Standards Source: Safetyculture.com For a company competing in the food and beverage industry, the standards and quality of a product are important factors as any defective product can severely damage the reputation of the company Certification is effective to provide a guideline for a manufacturing firm to build their standards Not only are they widely proven, but it also helps create trust with customers 11 Yakult Vietnam manufactures its products under the quality control standards which are a harmonized integration of both BSI HACCP & GMP certification and a set of the ISO quality management systems, including ISO 14001:2015, ISO 22000:2018, ISO 45001: 2018 Those certificates are reported to be re-evaluated and updated periodically by a third-party organization 3.1 ISO 45001:2018 ISO 45001 is an international standard for workplace health and safety that was developed to protect employees from diseases and workplace accidents This certification was created to reduce any factors that could cause irreparable harm to employees and organizations Its standards are the result of a significant amount of work by a technical committee of health and safety management experts who carefully considered a variety of other approaches to system management, including ISO 9001, ISO 22000, and ISO 14001 Furthermore, ISO 45001 was designed to take into account other existing occupational health and safety standards, such as OHSAS 18001, as well as the International Labor Organization's labor standards, conventions, and safety guidelines (NQA, 2022) These are some criteria that ISO 45001 aims at: - Improve Performance: ISO 45001 certification will improve the overall performance of the organization When a company decides to become ISO certified, it must be audited by a third party and subject to ongoing internal audits Audits are not just for finding non-conformances, but also for actively seeking to improve inefficiencies in order to make their organization more productive and perform better - Improve Employee Health and Safety: ISO 45001 enables businesses and executives to improve their OH&S management system in order to provide a safe and dependable environment for their employees and contractors Meeting the requirements ensures that businesses will monitor trends and assess potential risks As an ISO 45001 certified organization, they will become proactive in order to reduce the possibility of serious risks - Reduce Insurance Premiums: If the organization is ISO 45001 certified, insurance premiums can be reduced Insurance costs will be reduced if a proactive system for reducing hazardous environments in the workplace is maintained 12 - Employee Satisfaction: ISO 45001 improves the workplace, which increases employee satisfaction When companies prioritize employee health and safety, it demonstrates that the organization cares about their employees, which leads to a cultural shift and increased employee job satisfaction, knowledge, and participation Figure 1.2: The ISO 45001:2018 Certification of Yakult Vietnam ISO 45001 has seen a 97.3 percent increase in worldwide certificates in 2020, demonstrating the recent growth and importance of UKAS accredited certification (Statistics taken directly from the most recent ISO Survey) If a company has already implemented a quality or environmental management system that adheres to the Annex SL structure, ISO 45001 can be easily integrated 13 ISO 45001, which is aimed primarily at senior management, has the ultimate goal of assisting businesses in providing a healthy and safe working environment for their employees and anyone else who visits the workplace This goal can be attained by limiting factors that could result in injury, illness, or, in extreme cases, death As a result, ISO 45001 is concerned with mitigating any factors that are harmful or pose a risk to the physical and/or mental well-being of employees 3.2 ISO 14001:2015 The Yakult Vietnam factory has been ISO 14001:2015 certified, which is an international standard for environmental management systems (EMS) By utilizing high-quality materials and advanced Japanese technology, the final product is nearly 99 percent similar to the original raw materials, resulting in less waste for the environment (Yakult, 2011) The core value of ISO 14001 is that organizations must develop a detailed and clear set of environmental policies, use a set of best practices to proactively observe whether those policies are being adhered to, and continuously improve the system based on ongoing feedback and results 14 Figure 1.3: The ISO 14001:2015 Certification of Yakult Vietnam ISO 14001:2015 defines the requirements for an environmental management system that can be used by an organization to improve its environmental performance ISO 14001:2015 is designed for organizations that aim to manage their environmental responsibilities in a systematic way that contributes to the environmental pillar of sustainability ISO 14001:2015 assists an organization in achieving the intended outcomes of its environmental management system, which benefit the environment, the organization, and interested parties ISO 14001 objectives may be listed as - Compliance with the law: This is required by ISO 14001 Failure to comply with legislation would have far more serious consequences for the environment and stakeholders for the power station than for a fast food restaurant With prevention being preferable to cure, it is easy to see how becoming 100 percent compliant by reacting to legislation after its release would be critical to protecting the environment and surroundings - Reducing waste: While waste reduction is desirable for any food business, it is easy to imagine the numerous environmental benefits that waste reduction can bring to a larger business It also means saving money and the possibility of redirecting excess food to benefit others - Responsible purchasing (also known as sustainable purchasing) refers to the concepts of ethics, transparency, and solidarity within the context of CSR (Corporate Social and Economic Responsibility) strategies and regulation 3.3 ISO 22000:2018 ISO 22000 is an international standard for food safety management systems based on the hygiene management methods of HACCP ISO 22000 defines and certifies the requirements for a food safety management system It outlines what an organization must to demonstrate its ability to control food safety hazards and ensure food safety It is applicable to any organization, regardless of size or position in the food chain Therefore, ISO 22000 aims at the criteria as below: - Improved health and safety — Reducing food risks improves the health and safety of customers, employees, and others who may be exposed to food 15 - Improved customer satisfaction — Having an FSMS allows you to deliver products that consistently meet customer expectations - Assistance with meeting regulatory requirements — Compliance with regulatory requirements is required for ISO 22000 certification An FSMS can assist businesses in meeting these requirements and understanding how they affect the organization and its customers - Assist with meeting other standards and guidelines — ISO 22000 is linked to a number of other international standards and guidelines, and it can assist organizations in meeting the requirements of these systems as well - Improved transparency — ISO 22000 assists organizations in improving product traceability and achieving greater transparency Figure 1.4: The ISO 22000:2018 Certification of Yakult Vietnam 16 ISO 22000 adds a layer of assurance to the global food supply chain, allowing products to cross borders and bringing people the food they can trust ISO 22000 applies to all food and feed organizations, regardless of size or sector It is designed to be integrated into an organization's existing management processes, but it can also be used independently 3.4 CODEX HACCP HACCP is an acronym for Hazard Analysis and Critical Control Point System HACCP is a quality management system based on hazard analysis and critical control points It is an analytical tool to ensure food safety and quality HACCP includes systematic reviews of all relevant steps in the food processing process and identifies those steps that are critical to food safety and quality This tool allows focusing technical resources and expertise on processing steps that have a decisive impact on food safety and quality By January 2010, Yakult Vietnam had acquired the BSI HACCP & GMP Standards Figure 1.5: The CODEX HACCP Certification of Yakult Vietnam 17 This certification is concerned with food safety and legality HACCP is a systematic approach to identifying, evaluating, and controlling food safety hazards that aim - To avoid food safety hazards: A HACCP-compliant food company can guarantee that its products are free of biological, chemical, and physical contaminants It seeks to eliminate cross-contamination and is wary of allergens HACCP management systems strictly enforce personal hygiene, raw and cooked food separation, surface sanitization, and maintaining a safe minimum internal temperature A HACCP-focused company can improve its public image by demonstrating a commitment to public health - To manage Food Safety Risks Throughout the Supply Chain: The HACCP management system aims to control Food Safety issues at all stages of the food chain, from raw material production, procurement, and handling to finished food product manufacturing, storage, distribution, sale, and consumption - To make certain that food laws are followed: Food safety laws in Vietnam are fairly strict, and a strong commitment to HACCP and other food safety management systems not only protects consumer health but also ensures that a food service business does not break the law and end up paying large fines - To standardize the Food Manufacturing Process: The HACCP system assists in identifying critical control points where interventions are required to ensure that the food prepared is safe This results in critical and measurable standards and consistency in the food manufacturing process It also allows for monitoring and corrective measures in the event that the standards are not met This is a standard procedure for keeping the Best Inventory up to date If a deviation occurs indicating that control has been lost, the deviation is detected and appropriate steps are taken to reestablish control as soon as possible to ensure that potentially hazardous products not reach the consumer Management must be committed to a HACCP approach for a successful HACCP program to be properly implemented A commitment from management will demonstrate an understanding of the benefits and costs of HACCP, as well as 18 employee education and training Benefits include improved food safety assurance, better resource utilization, and faster problem resolution How Yakult monitors food safety and controls the quality of their products Yakult Group always strives to ensure quality assurance throughout the manufacturing process based on the Yakult Group Basic Quality Policy which highlights the fundamental policies and system regarding quality and safety Yakult's food safety plan entails strictly controlled procedures in their manufacturing areas to ensure the product is not exposed to any hazards that could compromise its safety Yakult's manufacturing process ensures that the quality of the product is carefully monitored and that it meets the highest standards During production, more than 100 tests are conducted to make sure that each batch of Yakult is of consistently high quality Lactobacillus numbers, acidity, potential contaminants, and taste are all tested in final bottle samples Their dedication to quality even extends to cold storage and transportation, making sure that the cold chain is not disrupted and that delivery vehicles are kept at a temperature of 0-4°C The fact that Yakult factory has been certified to ISO 14001:2015, and ISO 22000, proves that the company has succeeded in monitoring and controlling food safety for their products 4.1 Food safety To ensure food safety at the Yakult factory, the company conducts activities as below 4.1.1 Establish hygiene standards for employees Hygiene is one of the most important factors when it comes to producing food At Yakult factory, the hygiene of the staff is as important as the hygiene of the food facility to prevent cross-contamination The company ensures that all staff is trained in proper personal hygiene procedures and that everyone understands and complies with hygiene requirements at the workplace Before entering the manufacturing area, the staff at the Yakult factory are required to wash their hands and spray alcoholbased hand sanitizer The employees then need to go through a degassing machine to blow off all the dust on their bodies Throughout the production process, the employees are also required to wear protective gear which includes a hair net, ear plugs, and gloves They must wash their hands carefully before putting on the 19 gloves, and the hair net, and also wash their hands thoroughly again after wearing them They not reuse gloves and discard them after every use The shoes must be cleaned regularly and stored appropriately as they carry bacteria And finally, the jewelry should not be worn during the shift to avoid bacteria contaminating the products 4.1.2 Equipment cleaning and inspection In order to ensure the equipment is working well, the company usually conducts regular factory safety and health inspection tours and actively responds to any findings for improvement They are also improving working conditions by replacing older machinery with energy-saving and low-noise models The tanks and pipes system in the production will be sanitized by steam Moreover, the company also arranges a sanitizing spray for the area around bottling equipment and for staff hand hygiene The engineers also take responsibility for cleaning the entire line and machines before each shift begins, using biodegradable detergent solutions in conjunction with heat and scrubbing, or foaming At the end of the day, they will repeat the process to ensure that the machine is operating in the best condition 4.2 Quality control To ensure that the product is of the highest quality, Yakult maintains a comprehensive quality assurance program As a result, throughout the manufacturing process, samples are collected for laboratory analysis to make sure that the quality assurance measures in place are effective Quality assurance procedures are in place to verify that standards for personnel and factory hygiene, equipment cleaning, processing methods, and parameters, and product handling are maintained Yakult follows the principles of “Hazard Analysis and Critical Control Points” (HACCP) The entire manufacturing process is monitored to identify potential hazards and implement risk-aversion measures 4.2.1 Conduct quality management system - Raw material management In the stage of choosing raw materials, Yakult always investigates and conducts analysis tests on the materials, additives, and processing aids that are used in their production process The company only utilizes them when they comply with the Food Sanitation Act and related laws After that, the results of the investigation are compiled in their database - Production 20 Yakult has established regulations for the special manufacturing technology, cleaning, disinfection, and other conditions required for the cultivation of lactic acid bacteria, according to internal manufacturing management standards They reviewed their internal quality control system, which integrated conventional ISO 9001-certified quality management systems with HACCP systems and food defense programs, and now maintain a high standard of quality management through a proprietary system that integrates ISO 22000 with the Food Sanitation Act amendment and food hygiene control legislation based on HACCP principles They reviewed their internal quality control system, which integrated conventional ISO 9001-certified quality management systems with HACCP systems and food defense programs, and now maintain a high standard of quality management through a proprietary system that integrates ISO 22000 with the amendment of the Food Sanitation Act and the legislation of food hygiene control based on HACCP principles (Yakult Cooperate, 2021, 64) In production, their quality control activities include sampling, testing, and inspecting the product Individual bottles are inspected at random along the production line for incorrect printing, unwanted markings, and lid sealing For each batch of Yakult produced, approximately 100-200 product samples are collected and tested Yakult's high quality is ensured by a series of assessments that include microbiological quality, composition, and taste Once approved, the product is ready for retail distribution Furthermore, they also develop systems that allow them to handle the incident based on their risk management rules whenever product-related incidents occur and therefore carry out defective product recall promptly 4.2.2 Applying LEAN in the manufacturing process Yakult factory can produce 45,000 bottles of milk per hour with only 60 employees, thanks to a fully automated and self-contained production process based on Japanese technology Yakult benefits from the entire lean manufacturing process in terms of efficiency, productivity, and cost savings Six departments carry out the production process: seed, culture mixing, quality control, bottle molding, filling, and packaging In order to protect the environment, Yakult is always working to promote the reuse of packing materials Yakult bottles, for example, are made of primary plastic; therefore, after use, the staff will sort and transfer them to centers that recycle them into ballpoint pens and keychains Furthermore, the wastewater generated during production is not only treated with microbiological technology but is 21 also treated by the Vietnam - Singapore Industrial Park wastewater treatment system before being discharged into the environment (JOHN & PARTNERS, 2019) 22 References ISO Organization (n.d.) Management system standards ISO Retrieved August 8, 2022, from https://www.iso.org/management-system-standards.html JOHN & PARTNERS (2019, 08 27) Things you may not know about Yakult Vietnam John&Partners Retrieved August 7, 2022, from https://www.johnpartners.com/things-you-may-not-know-about-yakult-vietnam NQA (2022, 3) What are Quality Standards? List of ISO Quality Management Standards ASQ Retrieved August 8, 2022, from https://asq.org/quality-resources/learn-about-standards Yakult (2011, December 16) Nhà máy Yakult đạt tiêu chuẩn ISO 14001 Yakult Retrieved August 8, 2022, from https://corporate.yakult.vn/tin-tuc/nha-may-yakult-dattieu-chuan-iso14001_26.html Yakult Cooperate (2020, 9) Lcs (Lactobacillus Casei Shirota), Yakult Probiotics Shirota Yakult India Retrieved August 7, 2022, from https://www.yakult.co.in/yakultLCS.php Yakult Cooperate (2021, 11) Yakult CSR Report 2021 Yakult CSR Report 2021, 64 23 ... Shirota), Yakult Probiotics Shirota Yakult India Retrieved August 7, 2022, from https://www .yakult. co.in/yakultLCS.php Yakult Cooperate (2021, 11) Yakult CSR Report 2021 Yakult CSR Report 2021,... https://asq.org/quality-resources/learn -about- standards Yakult (2011, December 16) Nhà máy Yakult đạt tiêu chuẩn ISO 14001 Yakult Retrieved August 8, 2022, from https://corporate .yakult. vn/tin-tuc/nha-may -yakult- dattieu-chuan-iso14001_26.html Yakult. .. founder of Yakult in Japan Source: https://www .yakult. co.in /yakult- LCS.php Up to now, Yakult fermented milk has officially been available in a total of 38 countries, including Vietnam In 2007, Yakult