Research the application of lean management model in export manufacturing enterproses of vietnam

MINISTRY OF EDUCATION FOREIGN TRADE SUMMARY UNIVERSITY OF PHD THESIS RESEARCH THE APPLICATION MODEL AND TRAIN OF LEAN MANAGEM IN EXPORT MANUFACTURING ENTERPRISES OF VIETNAM Major: Business administration Major Code: 934.01.01 LE THI VAN DUNG Hà Nội, 2023 The thesis is completed at: ssociate Prof PhD Pham Thu Huong PhD Nguyen Thuy Anh Scientifi Reviewer 1: Reviewer 2: Reviewer 3: The research shall be presented in front of the council meeting at LIST OF PUBLISHED RESEARCHES RELATED TO THE THESIS " The impact of lean management practices on sustainable performance of handicraft enterprises in Vietnam, 8/2022 Thực trạng áp dụng quản tri tinh gon doanh ngiệp hàng xuất Việt Nam, Tạp chí Kế tốn Kiểm toán Việt Nam, 8/2022 Các yếu tố ảnh hưởng đến hiệu áp dụng quản trị tỉnh gọn doanh nghiệp sản xuất hàng xuất Việt Nam, Tạp chí Kế tốn Kiểm tốn Việt Nam, 7/2022 Đề tả cấp Bộ: Nghiên cứu áp dụng mơ hình quản trị tỉnh gọn cho Ngân hàng thương mại Việt Nam sau thực sáp nhập, Đề tài cấp Bộ, Đại học Ngoại thương, 6/2017 ~01/2019 Các nguyên tắc áp dụng quản trị tỉnh gọn ngân hàng, Kỷ gọn Hoạt động Ngân hàng, 05.2018 yếu Hội thảo Quản trị tỉnh PREFACE Necessary of the research Exports are an important part of any economy Over the years, import and export have made great contributions to the country's renovation For Vietnam, promoting the activities of export enterprises is an important goal in the process of economic development For each enterprise doing business in the export sector, having to compete in the global environment makes these enterprises face pressure from both the global business environment and the domestic business environment The increase of globalization activities, the rapid development and daily changes of technology in the context of the industrial revolution 4.0 make these pressures increase The "lean management" method, which is a business operation method, has been applied by many businesses around the world and has reaped positive results in business activities since the 90s of the twentieth century However, in Vietnam, there are not many enterprises in general and export enterprises in particular that apply the model of world management Therefore, the author finds that World Trade Organization can bring many benefits in exporting enterprises In addition, the main export markets of Vietnamese enterprises are the US and Europe, which have many strict requirements on product quality, quality of production and supply operations, and social responsibility of the enterprise It is necessary to study the current status of applying world management and build an appropriate application model for Vietnamese exporters in the current context Stemming from the above reasons, the author chooses the topic "Research the application of lean management model in export manufacturing enterprises of Vietnam" to deal with in doctoral thesis 2, Research objective and research questions 2.1 Research objective The research objective of the thesis is to study lean management models and their influencing factors in order to propose deployment models and solutions as well as conditions to improve the applicability of the world management model in Vietnam enterprises producing goods for export in Vietnam 2.2 Research questions ~ Question 1: Which popular lean management models are deloyed in enterprises today? ~ Question 2: What factors affect the successful application of lean management? - Question 3: How the characteristics of enterprises producing export goods affect the application of the lean management model? = Question 4: How to deploy and apply the lean management model in export manufacturing enterprises? ~ Question 5: Solutions and conditions for applying the lean management model in Vietnam's export manufacturing enterprises? Research methodology - The thesis uses synthetic methods, compares theories of lean management to choose an appropriate Jean management approach This method is also used together with the logical reasoning method to determine the evaluation criteria for the application of lean management as well as the factors affecting the application of lean management in enterprises - The thesis uses the method of sociological investigation: collecting opinions of managers to assess the current status of management practices that Vietnamese export enterprises are applying In addition, the method of interviewing senior managers and experts was also conducted to explain the approach as well as the process of applying lean management in Vietnamese export enterprises ~ The survey method uses a 5-level Likert scale to investigate whether the criteria for evaluating the application of lean management and the factors affecting the application of lean management identified above are correct with reality in export enterprises or not ~ Quantitative research methods are used to analyze survey results The data will be processed through SPSS software The research object and research scope 4.1 Research object The object of the study is the implementation and application of the Lean Management model in export manufacturing enterprises in Vietnam, 4.2 Research scope ‘The thesis focuses on researching and applying the lean management model in export manufacturing enterprises in the period from 2016 to 2022 New contributions of the thesis Theoritical contributions - Research and propose a number of new factors affecting the application of lean management in accordance with the characteristics of Vietnamese export manufacturing enterprises - Conduct a survey and run the model to test the impact of factors on the application of lean management in export manufacturing enterprises in Vietnam, Practical contributions - Investigate the current situation of applying Lean Management model in export processing enterprises to identify the factors affecting the application process and analyze the causes of success and failure from there as a basis for the proposal Prove how to deploy and apply the Lean Management model - Proposing the implementation of a lean management model in Vietnam's export manufacturing enterprises - Proposing a number of solutions and recommendations to apply the lean management model in Vietnam's export manufacturing enterprises Thesis structure ~ Chapter 1: Overview of research on applying lean management model - Chapter 2: Some theoretical issues about applying lean management model in export goods manufacturing enterprises ~ Chapter 3: Research process and methods ~ Chapter 4: The current situation of applying lean management model in Vietnam's exportmanufacturing enterprises ~ Chapter 5: Proposing a lean management model and some solutions and recommendations to apply the model to Vietnam's export-producing enterprises CHAPTER OVERVIEW OF RESEARCH ON APPLYING LEAN MANAGEMENT MODEL 1.1 Researches on Lean Management model 1.1.1 Some Lean Management Models in the World Toyota Production System (TPS House) is the first model of Toyota production system launched by Eiji Toyoda and Taiichi Ohno, 1988 This model consists of five elements including three foundation elements and two pillar element, The three foundational factors are Heijunka, Standardized Work, Continuous Improvement (Kaizen) and the two pillars of Right Time (JIT), Error Self Control (Jidoka) Goal: Highest Quality, Lowest Cost, Shortest Lead Time and notify ‘Stop Sf abnormatitios Ca human intinuous Flow oe okt Time bo Pull System Treaties work ‘Standardized Work Ko Hình 1.1: TPS House Model (Source: Ohno, 1988) Mơ hình Toyota Way 2001 Fuji Cho published the book "The Toyota Way 2001" to offer an alternative to the TPS House model The model consists of five principles outlined in two pillars With the pillar of continuous improvement, there are three principles: Challenge, Kaizen and Genchi Genbutsu With respect to others, there are two principles: Respect and Teamwork improvement Eee) Hinh 1.2: Mé hinh “Toyota way” (2001) (LK Liker, 2004) developed a 4P model to suggest the issues that businesses need to pay attention to in order to successfully implement World Management The four P's stand for (1) Philosophy, (2) Process, (3) People and Partners, (4) Problem Solving The model of J K Liker is shown as shown in the figure: Continual organization +See for yourself #Make decisions ` ey People and Partners “Grow leaders sRespect, develop and “Respect, develop and challenge 1e your people your suppliers ‘Create process “flow” «Standardize tasks Use pull systems “Use visual control ‘Level out workload “Use only tested technology *Stop the line one sBase management decisionson a long-term philosophy ceed Hình 1.3: Mơ hình 4P Liker (2004) (Source: Liker, J.K (2004) The Toyota way: 14 Management Principles from the World’s Greatest Manufacturer: Me Graw Hill.) Shook's Lean Transformation Model (2015) John Shook, 2015) and experts at the Lean Enterprise Institute (LEAN Enterprise Institute) have developed a "Lean Transformation" model that suggests to businesses the factors to pay attention to when they want to apply world management successfully The model of John Shook is shown as shown in the picture below: @ SITUATIONAL APPROACH - Value-Driven Purpose “WHAT PROBLEM ARE WE TRYING TO SOLVE?” Responsible Leadership PROCESS IMPROVEMENT| ql Oa Continuous, real, practical changes to improve the way the work is done | MANAGEMENT SYSTEM | CAPABILITY DEVELOPMENT Sustainable improvement ‘apability in all people atalllevels That drive this transformation Hình 1.4: Lean Transformation (Source: Shook, J (2015) Lean Transformation Framework From https://www.lean.org/exploreJean/what-is-lean/) Hobbs.'s model of applying world management to enterprises (2004) Hobbs (2004) proposed a step-by-step process of applying world management to all enterprises of any size This model outlines the seven implementation steps and the key lean principles in each of them (Table 1.1) Table 1.1: Steps of implementing Lean management Hobbs (2004) Step Content Principle Bước Ï — | SeLstrategic vision, Bước | Define and set up working groups Bước | Product analysis Value Buéc4 | Process analysis Value Chain Bước Š — |Factory site analysis Product flow Bước | Choose the right pull strategy Pull strateg: Buée7 | Continuous improvement Focus on perfection (Source: Hobbs, 2004) 1.1.2 Some models of Lean Management in Vietnam Lean management models “Made in Vietnam” Nguyén Diing Minh (2015) _ian an we so * Establishing lean management (standard | procedures, 5S, Kaizen Not ox | / J Testina specific asionsy factory —” Internal œ Training >| Appivin ll ssem the whole |!) ean ) —F Figure 1.6: “Made in Vietnam” (Source: Nguyen Dang Minh, & Nguyen Thi Van Ha (2016) “Made in Vietnam” Lean Management Model for Sustainable Development of Vietnamese Enterprises Procedia CIRP, 40, 603-608) Nguyễn Thị Đức Nguyên and Bùi Nguyên Hùng's Model (2010) Step Identify ‘oppotunity Step 2: Design solutions Step 3: Implementation ‘Step az Complete transformation ; continuous Hình 1.7: Mơ hình áp dụng Quản trị tỉnh gọn (Ngn: Nguyễn Thị Đức Ngun Bùi Ngun Hùng, 2010) Mơ hình Phạm Minh Tuấn (2015) £ Figure (Source: Pham Minh Tuần, 2015) 1.2 Overview of studies on factors affecting the application of lean management 1.2.1 Factors related to Leadership STT Factor Source No Factor Source Leaders have a long-term commitment to the Worley (2006), Jeffrey (2013), Wong (2009), application of lean management Achanga (2006), Drew (2004), Nitin (2010), Alaskari & cộng (2014): Alhuraish & công (2014) | Business leaders as well as stakeholders understand the benefits of applying world | Drew (2004), Achanga (2006), Anna (2014), management Womack (2003), Ohno (1988) | Effective internal communication from the | Achanga (2006), Tracey (2006), Worley board of directors to employees (2006), Bhasin (2006) | Leadership has a clear vision and strategy for | Bhasin (2006), Mefford (2009), Czabke the application of world management (2008), Emiliani (2005), Anna (2014) |The commitment and involvement of the middle management team Nguyễn Đạt Minh (2018) 1.2.2 Factors related to human policy There is a clear financial reward and punishment Tracey (2006), Emiliami (2005), Bhasin policy to encourage employees to actively (2006), Wong (2009), Ab Wahid & Corner participate in lean (2011) | Xây dựng hệ thơng tiêu chn, tiêu chí đánh | Achanga (2006), Liker (2003), Melton giá kết triển khai QTTG công | (2005), Bakâs & cộng (2011) Kundu & việc Manohar (2012), _ | Have a training plan to ensure that all members | Womack & cng (2003), Dennis (2007), of the enterprise understand the ideas and Wilson (2010), Todd (2011), Jeffrey (2013), techniques of World Management Sisson (2014) 1.2.3 Factors related to staff qualification No Factor Source Employees consciously change the way Tracey (2006), Czabke (2008) they work in a more positive direction | Staffare qualified and quick to learn Motwani (2003), Crute (2003), Kettinger (1995), | Staffare well trained Nguyễn Đăng Minh (2013) Achanga (2006), Anna (2014), Wong (2009), Jeffrey (2013), Bhasin (2006) 10 2.3 Content of lean management in export manufacturing enterprises 2.3.1 Lean management awareness Lean management awareness in export-producing enterprises is considered as the foundation for applying lean management in business activities of enterprises The foundational factor to apply lean management in manufacturing enterprises is the awareness of management and employees about lean management thinking, 2.3.2 Identifying waste in export-producing enterprises Womack and Jones (1996) proposed five fundamental principles of lean management including (i) creating value based on the customer's point of view, (ii) value chain identification, (iii) creating flow continuous in the process of production and business, (iv) pulling the flow in the direction from the customer, (Vv) continuous improvement towards perfection For the specifics of export business activities, the author gives the following types of waste: ~ Procurement (production) of surplus exports - Meantime ~ Waste of shipping - Waste in performing unnecessary and valueless activities - Waste of storage ~ Waste in manipulation - Waste of aviation standards 2.3.3 Lean management tools - Value Stream Mapping (VSM) - Standardization of processes - Preventing Mistakes - Poka-Yoke ~ 5S Method and Visual Management ~ Continuous improvement- Kaizen ~ Cell model = Just- in— Time (JIT) 1I 2.4 The characteristics of enterprises producing export goods affect the application of the lean management model ~ Large and complex operating market - High-risk activities ~ Strict requirements on products 2.5 Principles of applying lean management model in export-producing enterprises Figure 2.3: Principle of Lean management Nguén: Womack va Jones (1996) 2.6 Conditions for applying lean management model in export manufacturing enterprises - Foundation of consciousness, discipline and culture of society towards lean management perspective - Society's perception of lean management - Team of consultants 12 CHAPTER 3: RESEARCH PROCESS AND METHODS, 3.1 Research process Diagram 1.1: Research step-by-step process "Nghiên cứu sở lý luận vẻ QTTG DNSX ITXK Kiểm định nhân tổ ảnh hưởng m việc áp dụng cong QTTG: ĐỀ xuất mô hình áp dạng OTT 3.2 H1: H2: H3: H4: HS: 'Nghiên cứu mơ hình QTTG điền hình Phân tích số mơ hình Oĩ số DNSX HIXK Vigt N: isi phâpđn dụng hành công Source: Author Research hypothesis Leadership commitment has a positive impact on successful implementation of lean management Human resource policy has a positive impact on the successful application of lean management Employee qualifications have a positive impact on the successful application of lean management Corporate culture has a positive impact on the successful application of lean management External value chain management has a positive impact on successful implementation of lean management 3.3 Proposing a quantitative research model Leadership commitment Staff qualifications Human policy Corporate culture External value chain management (—— `] _ Sueeessfulapplieation _Z ent lean mamagem 13 3.4 Research scale and designing the survey Code | Observed variables LD | Leadership commitment Source LDI | Leaders have a long-term commitment to | Worley (2006), leffrey (2013), Wong (2009), the application of lean management Achanga (2006), Drew (2004), Nitin (2010), Alaskari & cộng (2014); Alhuraish & công (2014) LD2 | Business leaders as well as stakeholders understand the benefits of applying world | Drew (2004), Achanga (2006), Anna (2014), management Womack (2003), Ohno (1988) LD3 | Effective internal communication from the | Achanga (2006), Tracey (2006), Worley board of directors to employees (2006), Bhasin (2006) LD4 | Leadership has a clear vision and strategy | Bhasin (2006), Mefford (2009), Czabke (2008), for the application of lean management _| Emiliani (2005), Anna (2014) LDS | The commitment and involvement of the middle management team Nguyễn Đạt Minh (2018) NS | Human policy NSI | Having a clear financial reward and | Tracey (2006), Emiliami (2005), Bhasin (2006), punishment policy to encourage employees | Wong (2009), Ab Wahid & Comer (2011) to actively participate in lean management NS2_| Develop a system of standards and criteria | Achanga (2006), Liker (2003), Melton (2005), for evaluating the results of lean | Bakas & cộng (2011) Kundu & Manohar management implementation inall jobs | (2012), NS3_| Having a training plan to ensure that all [Womack & cong su (2003), Dennis (2007), members of the enterprise understand the | Wilson (2010), Todd (2011), Jeffrey (2013), ideas and techniques of Lean Management | Sisson (2014) NV _| Staff qualifications NVI | Employees consciously change the way | Tracey (2006), Czabke (2008) they work in a more positive direction NV2 | Staifare qualified and quick to learn Motwani (2003), Crute (2003), Kettinger (1995), Nguyễn Đăng Minh (2013) 14 NV3 ‘Achange (2006), Anna (2014), Wong (2009), Jeftrey (2013), Bhasin (2006) Staff are well trained, VH | Corporate culture VHI | Enterprises have an open culture, | Czabke, Hansen va Doolen (2008); Achanga encouraging innovation and creativity công (2006); Bhasin (2006), Alhuraish & cộng (2014); Shook (2015), Crute đồng nghiệp (2003) VH2 | Enterprises encourage employees to leam | Kettinger va Grover (1995) and share knowledge VHB | Enterprises encourage teamwork Tracey va Flinch (2006), Czabke, Hansen va Doolen (2008) VH4 | Enterprises set up a specialized group to | Nguyen Dat Minh (2018) promote the implementation of lean management QL | Managing external value chain QLT | Have a good suppliers’ capacity Alhuraish (2014); Coronado & Antony (2002); QZ | Suppliers are committed to providing goods at the right time and in the right quantity _— and partner (2014); Kumar (2009); Sabry QL3 | Have a close, Tong-term relationship with | (5914) the supplier Q4 | Customers are always committed to their | Al-Najem (2014) Coronado & Antony (2002), orders Hibadullah QLS | Information exchanged with customers is | nd partner (2014); Kumar (2009); Rose & shared fully and timely HQ | Successful application partner Sabry (2014); Sisson (2014) of Lean management HỘI | HQ2 | HQ3_| HQ4 | Increase labor productivity Improve product quality Reduce production costs Increase the ability to deliver on time Dennis (2007), Naor and partner (2014) (2014); 15 3.4 Method of collecting data Data collected through paper survey and online survey on google forms will be analyzed by quantitative research method After collecting data, the author conducts testing and analysis using SPSS 20.0 software by descriptive statistics tools, testing the scale by Cronbach's Alpha coefficient, exploratory factor analysis EFA, analysis multiple regression 3.6 Research & Data processing method After collecting data, the author conducts testing and analysis using SPSS 20.0 software by descriptive statistics tools, testing the scale by Cronbach's Alpha coefficient, exploratory factor analysis EFA, analysis multiple regression Evaluation of the reliability of the scale Crobach's Alpha EFA exploratory factor analysis Regression model analysis and hypothesis testing 3.7 Sampling Classification of enterprises in the sample Bang 3.1: Business scale Business scale Small No % 32 16.5% Medium | 103 53.0% Large 60 35.5% Total 195 100% Source: Author’s survey Education level of survey respondents Bang 3.2: Education level of survey respondents Education level Intermediate college Undergraduate Graduate Total No % 24 12% 93 48% 78 40% 195 100% Source: Author’s survey 16 Working position of surv y respondents Bang 3.3: Working position of survey respondents CEO Managers| Staff Total Position 13 103 79 195 No 6.7% 52.8% 40.5% 100% % Source: Author's survey 17 (CHAPTER 4: SITUATION OF APPLICATION OF LEAN MANAGEMENT MODEL IN VIETNAM'S EXPORT MANUFACTURING ENTERPRISE 4.1 Overview of Vietnamese export manufacturing enterprises Exports recorded a strong growth in size, from 176.6 billion USD in 2016 to 336.3 billion USD in 2021 (equivalent to an increase of 90.4% within years) 400 300 200 “° 1766 i 2016 aT 214 2017 2018 Series 264.2 282.7 2019 2020 3863 201 Hinh 4.1: Vietnam's exports in the period from 2016 - 2021 4.2 Analysis of the current state of applying lean management in Vietnam's export manufacturing enterprises 4.2.1 Current status of awareness and application of the Lean management The survey results show that 12% of enterprises in the survey group not know about world management This is a not too large number, reflecting the increased awareness of enterprises on world management compared to the past However, a percentage of 18% of enterprises have known about World Management but have not applied it due to reasons such as insufficient resources and not considered necessary This number also shows that enterprises’ reluctance and barriers to world ‘management are still relatively high 4.2.2 The current situation of waste identification 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% A880) 57.60% + “Trong thu Thời gian mua/sản chờđợiở xuất hàng công XKUa - đoạn 57.60% r r + a Trong vận Trong Lưukho Trong Hàng chuyển thựchiện thao tác Không đạt hoạt động tiêu chuẩn không mang lại giá trị Hình 4.4: The level of identification of wastes in enterprises (Source: Author's survey)