Failures in logistics management of vinalink s logistics department and recommendations

I NATIONAL ECONOMICS UNIVESITY ENGLISH FOR BUSINESS DEPARTMENT FACULTY OF FOREIGN LANGUAGES  ¬ LE THI THUY LINH INTERNSHIP report Topic: FAILURES IN LOGISTICS MANAGEMENT OF VINALINK’S LOGISTICS DEPARTMENT AND RECOMMENDATIONS II Hanoi- 5/2010 I NATIONAL ECONOMICS UNIVESITY ENGLISH FOR BUSINESS DEPARTMENT FACULTY OF FOREIGN LANGUAGES  ¬ LE THI THUY LINH INTERNSHIP report Topic: FAILURES IN LOGISTICS MANAGEMENT OF VINALINK’S LOGISTICS DEPARTMENT AND RECOMMENDATIONS Field: English for Business Studies Code: 701 Supervisor: MS NGUYEN PHUONG HOAI, M.A Hanoi- 5/2010 II ACKNOWLEDGEMENTS This study is completed not as the result of my personal effort but the outcome of enthusiastic support and contribution from many people involved in my internship process Therefore, I would like to thank Ms Trần Thị Thu Giang, Dean of Faculty of Foreign Languages for giving me the opportunity to conduct this study I am also delighted to give my sincere recognition and appreciation to Ms Nguyễn Phương Hoài for her constant help with academic knowledge and her support during the time I complete my report I would also like to express my gratitude to Vinalink International Freight Forwarders particularly Logistics DepartmentHa Noi Branch for allowing me to internship in the company I especially owe my thanks to people who directly instructed me who are Mr Nguyễn Quốc Vương, Manager of Logistics Department and other officials of the department Once again, I deeply appreciate all the great support that I received during my internship III EXECUTIVE SUMMARY This report provides an analysis on the failure of Logistics Department-Ha Noi Branch of Vinalink International Freight Forwarders in terms of logistics management Data collected through methods of observation, horizontal and vertical analysis of revenue, growth and proportion shows that revenue of Logistics Department has moderate increase over the time However, the rate of revenue which Logistics Department contributes to the total number of the whole branch is rather low despite the fact that logistics is one of the most popular services recognized by Vinalink’s customers and partners Its revenue contribution is outnumbered by those of Air and Sea Departments This situation is the result of inefficient logistics management Its management failures are shown the most clearly in two of its revenue generating sources: warehouse and freight transport Therefore, a management reform is the key solution to help Logistics Department overcome its drawbacks and attain greater competitive strength among other departments of Ha Noi Branch Recommendations discussed in this report include:  Improve warehouse management  Improve freight transport management IV INTRODUCTION Rationale Together with the growth of Vietnam’s economy in general and business sector in particular, the need for exchanging and transporting goods is getting greater and greater Logistics has appeared to fill this market gap In transport context, logistics is referred to as the planning, organization, management, execution and control of freight transport operations which determines the efficiency of freight transport Up to now, logistics has become a business with the emergence of new companies as well as specialized departments within existing transport organizations Vinalink International Freight Forwarders (Vinalink) is a longtime player in this business Since its establishment in 1999, Vinalink has provided logistics services in combination with its International transport services and from 2002 these services have been managed by specialized departments in Ha Noi, Hai Phong and Ho Chi Minh City Among those three departments, Logistics Department of Hanoi Branch has become a popular provider of these services However, as a specialized department with its own management Logistics Department has failed to prove its role in revenue contribution into the total number of the whole office in comparison with other departments Departments This results from its such as Sea and Air inefficient management Therefore, in this study, I analyzed some drawbacks of Logistics Department in terms of logistics management from which I could draw some recommendations to solve the situation Methodology In this report I based on three main research methods to present my ideas and arguments, which are observational method, quantitative method and descriptive method Research questions: V My report gives answers to the following questions: - What are issues of logistics management? - What are Logistics Department’s failures in logistics management? - How can Logistics Department improve its management? Sources and method of data collection Analysis in my report primarily based on secondary data such as statistics organizational of revenue, records rates The data of revenue, was growth collected and through observation, Vinalink’s performance reports and minutes of meetings VI TABLE OF CONTENT CHAPTE R TITLE PAGE Title page I Acknowledgement II Executive summary III Introduction IV Table of content VI Main chapters Introduction of Vinalink International Freight Forwarders and Logistics Department .1 1.1.Vinalink International Freight Forwarders’ background 1.2 Logistics Department’s background 1.3 Logistics Department’s performance Literature review 2.1 Logistics .7 2.2 Logistics management .8 2.2.1 Warehouse management .8 2.2.1.1 Use of building space 2.2.1.2 Minimum movement .10 2.2.1.3 Control and information system 10 2.2.1.4 Product integrity 11 2.2.1.5 Working condition and safety 11 2.2.2 Freight transport management 11 2.2.2.1 Choice of transport modes 11 2.2.2.2 Scheduling and routing control .13 2.2.2.3 Fleet management 13 Analysis and findings 15 3.1 Warehouse management 15 3.1.1 Warehouse design and layout 15 3.1.2 Information and communication system 17 3.1.3 Working condition and safety .18 3.2 Freight transport management 18 Recommendations .21 VII 4.1 Warehouse management reform .21 4.1.1 Warehouse design and layout .21 4.1.2 Information and communication system .23 4.1.3 Working condition and safety 23 4.2 Freight transport management reform .24 Conclusion 26 Appendix .28 References 29 CHAPTER I INTRODUCTION OF VINALINK INTERNATIONAL FREIGHT FORWARDERS AND LOGISTICS DEPARTMENT Chapter provides an overview of Vinalink International Freight Forwarders’ business and after that zooms in the operation of Logistics Department of Vinalink Ha Noi Branch to introduce its main areas of services In addition, Logistics Department’s performance is evaluated in order to find out its current situation 1.1 Vinalink International Freight Forwarders’ background Vinalink International Freight Forwarders or Vinalink for abbreviation founded under the decision of Minister for Ministry of Trade to equitize state-owned company, officially started its operations on September 01, 1999 as a Joint Stock company with 10% state-owned, and 90% individual-owned, with starting capital of VND8 billion Vinalink is headquartered at 145 – 147 Nguyen Tat Thanh, District 4, Ho Chi Minh City and has branches and representative offices in Ha Noi, Hai Phong, Binh Duong, Da Nang, Quy Nhon, Dong Nai… Vinalink has more than 270 employees and owns over 2.500 sq m of office building, 16.000 sq m of warehouse and open yards, over 40 prime movers, trucks and pick-up vans, loading and unloading equipments and devices Vinalink’s scope of business includes: - Freight forwarding (Seafreight and Airfreight) - Transport services - Logistics services - Bonded warehouse and cargo storage services