Improving internal material supply chain of nghi son cement corporation

Draft | Student: Phùng Nhật Huy NATIONAL ECONOMICS UNIVERSITY Advanced Educational Program BACHELOR THESIS Topic: Improving internal material supply chain of Nghi Son Cement Corporation Student Student code Class Lecturer : Phùng Nhật Huy : 11121665 : International business K54 : Nguyễn Anh Minh Ha Noi - 2016 Draft | Student: Phùng Nhật Huy STATUTORY DECLARATION I herewith formally declare that I myself have written the submitted Bachelor’s Thesis independently I did not use any outside support except for the quoted literature and other sources mentioned at the end of this paper Hanoi, / / 2016 Signature Draft | Student: Phùng Nhật Huy Tablet of Content STATUTORY DECLARATION TABLET OF CONTENT LIST OF FIGURES INTRODUCTION CHAPTER 1: THE THEORETICAL FRAMEWORK OF SUPPLY CHAIN AND INTERNAL MATERIAL SUPPLY CHAIN 1.1 Overview of supply chain 1.1.1 Definition of supply chain 1.1.2 Definition of internal material supply chain .6 1.1.3 Role of internal material supply chain 1.1.4 Element of internal material supply chain 1.1.4.1 Exploit material 1.1.4.2 Transport material .9 1.1.4.3 Store material 1.1.4.4 Locate material 10 1.2 Operation of the internal material supply chain of a firm 10 1.2.1 Choosing internal source of supplies 10 1.2.2 Material classification .11 1.2.3 Warehouse management 12 1.2.4 Transport material .14 1.2.5 Build up plan for supply 14 1.2.6 Quality management .15 1.3 Factors affect internal supply chain of business 16 1.3.1 Internal factors 16 1.3.2 External factors .16 CHAPTER 2: THE ANALYSIS OF INTERNAL MATERIAL SUPPLY CHAIN AT NGHI SON CEMENT CORPORATION 18 2.1 Company introduction 18 2.1.1 General information of NSCC .18 2.1.2 History of establishment and development 18 2.1.3 Organization structure 19 Draft | Student: Phùng Nhật Huy 2.1.4 Function of Divisions 19 2.2 Situation of internal material supply chain .22 2.2.1 Overview of Nghi Son Cement Corporation internal material supply chain 22 2.2.2 Operation of the internal material supply chain at Nghi Son Cement Corporation during 2011 – 2015 22 2.2.2.1 Choosing source of material .22 2.2.2.2 Material classification 23 2.2.2.3 Warehouse system 24 2.2.2.4 Transportation of material: 25 2.2.2.5 Build up supply goal 26 2.2.2.6 Quality management 29 2.3 Evaluation .30 2.3.1 Actual situation of Nghi Son Cement Corporation material supply chain 30 2.3.2 Strength of Nghi Son Cement Corporation’s internal material supply chain 32 2.3.3 Limitation of Nghi Son Cement Corporation’s internal material supply chain 33 2.3.4 Reasons for improving Nghi Son Cement Corporation internal material supply chain 34 CHAPTER – SOLUTION FOR IMPROVING THE INTERNAL MATERIAL SUPPLY CHAIN AT NGHI SON CEMENT CORPORATION 36 3.1 Development orientation of Nghi Son Cement Corporation 36 3.2 Solution for improving the internal material supply chain of Nghi Son Cement Corporation 37 3.2.1 Ensure material flow 37 3.2.2 Improve the process of product management 37 3.2.3 Upgrading warehouses and transport system 38 3.3 Recommendation for the authority 39 Draft | Student: Phùng Nhật Huy CONCLUSION 40 REFFERENCE Draft | Student: Phùng Nhật Huy List of figures Figure 1.1: Supply chain of Lee & Billington Figure 1.2: Supply chain divided into two main channels Figure 2.1: Organization structure of Nghi Son Cement Corporation 19 Figure 2.2: Warehouse system of Nghi Son Cement Corporation 25 Draft | Student: Phùng Nhật Huy INTRODUCTION Background and statement of problem In the beginning of the 21st century, along with the tendency of globalization, many companies have gained chances to approach the international markets; on the other hand, they have to face the threat of losing their pre-owned market share in Vietnam One of the main factors that decide the fate of these companies is the cost of the products, low cost may help firm to draw the attention of consumer to their products and to maintain those attention, the quality of products must worth the amount that consumer paid out In order to make the product with best cost compare to price, managers have to improve the internal material supply chain of the firm, which is the first step in determining the price of the good they intended to deliver to their consumers The supply chain of material is the process begins from the stage when raw materials leave the warehouse of the supplier and end up in the storage of the manufacturer ready for the main production procedure which converts them in to finished good Since this is an important phase, many researches have been conducted to increase the performance of internal material supply chain but this still have many drawbacks that have bad effects on this process The quality of input material has been improved but not even, this is cause by the mistake in quality control Another problem that is worth consideration is the timeliness in deliver the good to consumer which require a stable inflow of material In reality, a company has to face many problems beside two typical example mentioned above Nghi Son Cement Corporation is a joint venture between Vietnam Cement Industry Corporation (VICEM) and two Japanese multinational corporations: Taiheiyo Cement (TCC) and Mitsubishi Materials Corporation, the company provides building material to the market With 20 years of operating, the company is familiar with Vietnam market and they have built up nearly complete supply chain Still, I realize there are still drawbacks in internal material supply chain such as inflexibility in supply or non-automatic operating system Therefore, in order to Draft | Student: Phùng Nhật Huy compete with current and potential rival in the market and for a long-term plan to extend the market to other country, Nghi Son Cement Corporation should improve its supply chain system It the reason for me to choose the topic: “Improving the internal material supply chain of Nghi Son Cement Corporation” Purpose and requirements for the thesis The purpose for this thesis is to state out the limitations that remain in the internal material supply chain of Nghi Son Cement Corporation and furthermore, analyze the company current condition to find out hidden potential that can be used to improve the performance of internal material supply chain in the foreseeable future There are requirements for the thesis:  Develop theoretic framework about internal material supply chain and its role in the business process of the company  Analyze the efficiency of internal material supply chain in Nghi Son Cement Corporation  Propose solutions to improve the performance of internal material supply chain in Nghi Son Cement Corporation in the future Object and scope of the thesis 3.1 Object of the thesis The thesis focuses on the internal material supply chain of Nghi Son Cement Corporation and solutions to improve it in the future 3.2 Scope of the thesis The thesis uses the data from the accounting and logistic department of Nghi Son Cement Corporation from 2011 to 2015 The solutions are intended to take effects in the 5-year period that ends in 2020 Draft | Student: Phùng Nhật Huy Research structure Apart from the introduction, conclusion, references and appendixes, this thesis consists of three chapters: - Chapter provides the key definition and base framework that is used to evaluate the efficiency of internal material supply chain - Chapter analyzes the state of internal material supply chain of Nghi Son Cement Corporation base on the framework during 2011-2015 - Chapter propose solution to improve Nghi Son Cement Corporation internal material supply chain Draft | Student: Phùng Nhật Huy CHAPTER 1: THE THEORETICAL FRAMEWORK OF SUPPLY CHAIN AND INTERNAL MATERIAL SUPPLY CHAIN 1.1 Overview of supply chain 1.1.1 Definition of supply chain Supply chain refers to all networks of relevant organizations, through the forward and backward relationship, in different processes and activities create value in form of products and services that are delivered final consumers There are many different definition of the supply chain According to Lee & Billington (1995), the supply chain is a network of facilities for purchasing raw materials, transform them into intermediate products, then to the final product and that product will be delivered to customer by the distribution system By this concept, the supply chain is shown in the following diagram: Figure 1.1: Supply chain of Lee & Billington ... material supply chain 30 2.3.2 Strength of Nghi Son Cement Corporation? ??s internal material supply chain 32 2.3.3 Limitation of Nghi Son Cement Corporation? ??s internal material supply chain. .. 2.3.4 Reasons for improving Nghi Son Cement Corporation internal material supply chain 34 CHAPTER – SOLUTION FOR IMPROVING THE INTERNAL MATERIAL SUPPLY CHAIN AT NGHI SON CEMENT CORPORATION. .. FRAMEWORK OF SUPPLY CHAIN AND INTERNAL MATERIAL SUPPLY CHAIN 1.1 Overview of supply chain 1.1.1 Definition of supply chain 1.1.2 Definition of internal material supply chain