Logistics operations of vinamilk

The second limitation...12 Trang 4 Chapter 1INTRODUCTIONVietnam Dairy Products Joint Stock Company1.1.Information about companyVietnam Dairy Products Joint Stock Company Vinamilk Addres

VIETNAM GENERAL CONFEDERATION OF LABOUR

TON DUC THANG UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

LOGISTICS OPERATIONS OF VINAMILK

Mentor: Hà Kiều My

Class: 16070611

Group 03:

Ngô Minh Vũ - 71608200 Nguyễn Ngọc Bảo Thi – 71608119 Nguyễn Ngọc Tuyền– 71608141 Nguyễn Đức Thạch – 71608113 Nguyễn Kim Thùy Vân – 71608145 Nguyễn Thị Thúy Huyền –71608045 Nguyễn Thị Yến Nhi– 71608090 Nguyễn Chí Toàn – 71608128 Phạm Doãn Hòa– 71608036

Ho Chi Minh City, 9 December 2017th

LIST OF ABBREVIATIONS, TABLE AND FIGURES

 PICTURE:

Picture 1: Products of Vinamilk

Picture 2: The distribution channels

Picture 3: Scanning Barcode

 DIAGRAMS:

Diagram 2.1: Supply chain model of Vinamilk

Diagram 2.2: Inbound model of Vinamilk

Diagram 2.3: Outbound model of Vinamilk

Diagram 3.1: Information Flow

Diagram 3.2: Physical flow and the transfer of ownership

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Chapter 1 INTRODUCTION 3

1.1 Information about company 3

1.2 Development and Formation History 3

Chapter 2 3

SUPPLY CHAIN MODEL OF COMPANY VINAMILK'S MILK PRODUCTS 3

2.1 INBOUNDS 4

2.2 OUTBOUNDS 5

Chapter 3 6

VINAMILK’S CURRENT DISTRIBUTION CHANNELS 6

3.1 The distribution channels 6

3.1.1 General Trade – GT 6

3.1.2 Modern Trade – MT 7

3.1.3 Key account – KA 7

3.1.4 Other channels E - commerce and Export: 7

3.2 The flows in the distribution channels 8

3.2.1 Information flow 8

3.2.2 Physical flow and the transfer of ownership: 8

Chapter 4 10

ADVANTAGES AND LIMITATIONS IN LOGISTICS OF VINAMILK 10

4.1 Advantages in Logistics of Vinamilk 10

4.2 Limitations in Logistics of Vinamilk 10

4.2.1 The first limitation 10

 Recommendation 11

4.2.2 The second limitation 12

 Recommendation 12

Chapter 1 INTRODUCTION

Vietnam Dairy Products Joint Stock Company

1.1 Information about company

Vietnam Dairy Products Joint Stock Company (Vinamilk)

Address: No 10, Tan Trao Street, Tan Phu Ward, District 7, HCMC

Phone: (028) 54 155 555

(028) 54 161 226

Wedsite: vinamilk@vinamilk.com.vn

1.2 Development and Formation History

- 1976: Vinamilk was established on August 20, 1976 on the basis of three dairyfactories from the old regime:

 Thong Nhat Dairy Factory (formerly known as Foremost factory)

 Truong Tho Dairy Factory (formerly known as Cosuvina factory)

 Dielac Powdered Milk Factory (formerly known as NestlD factory (Swiss)

- 1985: Received the Third-Class Labor Medal

- 1991: Received the Second-Class Labor Medal

- 1996: Received the First-Class Labor Medal

- 1995: Inaugurated the first dairy factory in Hanoi

- 2000: Awarded the title “Labour Hero of the Renovation Process”

- 2001: Inaugurated Can Tho Dairy Factory

- 2003: Inaugurated Binh Dinh and Saigon Dairy Factory

- 2005: Inaugurated Nghe An Dairy Factory Received the Independence Medal III-2006: Inaugurated the first dairy farms in Tuyen Quang

- 2008: Inaugurated Tien Son Dairy Factory, Inauguration of the second dairy farm inBinh Dinh

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- 2010: International investment in New Zealand and over 20 other countries Receivedthe Independence Medal II ,Construction of Thanh Hoa dairy farm

- 2012: Construction of the fifth dairy farm in Lam Dong Inauguration of modernfactories

- 2013: Inaugurated the super dairy factory in Binh Duong, Commencement of newdairy farm construction in Tay Ninh and Ha Tinh

- 2014: Vinamilk - 38 years of innovation and development

- 2015: Raised stake in Miraka Limited Company of New Zealand, Commencement ofThong Nhat - Thanh Hoa dairy farm construction

- 2016: Vinamilk official launched its brand in Myanmar, Thailand, Inauguration ofAngkormilk dairy factory which was invested by Vinamilk, Vinamilk acquired 100%stake in Driftwood Dairy Holding, Introduction of USDA certified premium VinamilkOrganic Fresh Milk

 Field of production:

- Milk

- Vinamilk Yogurt

- Powdered Milk

- Infant Cereals – Ridielac

- Special Nutrition Products For

Picture 1: Products of Vinamilk (source: Vinamilk)

Distribu-Wholesalers/RetailersMilk collection

Farmers,

cattle farms

DCFactories

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Diagram 2.1: Supply chain model of Vinamilk

(Source: Supply Chain Management Forum)

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United StatesNew ZealandEurope

Australia

United States

Germany

Italy

Switzerland

aland, Combodia

Ho ChiMinh

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Customer service Tank truck automatically

go through 2 transit station

Production

Shipping Distribution Product

storage

Domestic market Foreign market

Tetra Pak Technology

MT GT

Chapter 3

VINAMILK’S CURRENT DISTRIBUTION CHANNELS

3.1 The distribution channels

Picture 2: The distribution channels (Source: Vinamilk)

3.1.1 General Trade – GT

220 independent distributors and more than 140,000 retail outlets:

Manufacturers distributors wholesalers retailers consumers   Products from factories are dealt out to distributors Then, they provide products forwholesalers (lever 1, 2,3 , ) and the wholesalers bring them to retailers (markets,groceries,…) This is the main distribution channel of Vinamilk which distribute 80%

of revenue Therefore, Vinamilk require that the distributors must have manycriterions, such as: coverage, revenue, inventory, salesmen, infrastructure, finance,competitive capacity, location,… Distributors have responsibility for providingproducts for the lower distributors in their area To be the Vinamilk distribution,distributors must commit to some terms and conditions such as: do not display ordistribute other dairy products

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Producers SupermarketsProducts are directly distributed to modern retailers, including supermarkets,convenience stores,… and the customers will buy products from them Vinamilk’sproducts are being sold at 650 supermarkets around Vietnam, especially supermarkets

in the big provinces and cities

3.1.3 Key account – KA

Key Accounts are restaurants, hotels, schools, companies,… They order a large ofnumber of the products from Vinamilk

The distribution and selling network of the company is an essential element that leads

to the success of the company in ensuring that their new products are brought tocustomers

3.1.4 Other channels:E - commerce and Export

Vinamilk has a team to delivery to the distribution centers, and they hire other partieswhen the goods is overloaded to provide their products for customers right time

At the present, Vinamilk has 16 factories: 13 factories in Vietnam and 3 factories inUSA, New Zealand and Cambodia More than 7 billion diary products are to servecustomers around country every year Vinamilk’s products are present at 43 countriesaround the world

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Diagram 3.1: Information Flow

For supermarkets and Key accounts, information is transferred directly from Vinamilk

to these members through the telephone/fax system or through the sales staff, andfinally to the consumers and vice versa

The information system in Vinamilk is based on the integrated ERP managementsolution, which integrates various information technology solutions such as OrealCRM customer management solution and Viettel sale software

3.2.1 Physical flow and the transfer of ownership:

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Supermarkets

& Keyaccounts

Vinamilk

Diagram 3.2: P d the transfer of ownership

In order to delivery the goods to the customers in an efficient and convenient way,Vinamilk has established a logistics enterprise which is responsible for the goodsdelivery

In MT channels, through Vinamilk’s logistics enterprise, the goods is delivered directlyfrom warehouses to supermarkets or key accounts and, finally, to customers

In GT channels, through the logistics enterprise, the goods are delivered to thedistributors to the small agent outlets and then to the end customer

When the goods are delivered to the chanel’s members, the ownership of goods is alsotransfer to them

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DC

Customer

Chapter 4 ADVANTAGES AND LIMITATIONS IN LOGISTICS OF

VINAMILK4.1 Advantages in Logistics of Vinamilk

- Demand forecast of Vinamilk is 90%

Vinamilk can forecast exactly the demand of the market so they know howmany products they should make and they don’t have inventories Demandforecast help Vinamilk to have right plans in the future

- Vinamilk can bring their products to customers on time in full thanks to thedistribution network which stretch out from the North to South of the country

- Vinamilk’s automatic warehouse is the most modern in Vietnam Thiswarehouse helps Vinamilk to utilize the space optimally, decrease cost of thelabor and improve productivity

4.2 Limitations in Logistics of Vinamilk

4.2.1 The first limitation

- Limitation: Damages to goods (especially yogurt) is easily occured during theloading and unloading process from manufacturers to distributors

- Reason: Careless while loading and unloading the goods could make the box shockedwhich leads to the affection to quality and/or quantity of yogust/milk Here are someexamples for the careless :

o Careless while moving the goods

o Overlapping too many boxes

the goods properly.

- Traning about the meaning

of guidance label on the

cactons

They cancontrol thehandling ofgoods morecarefully andprofessionally

- Depend on the awareness ofindividual-ly

- High cost

- Time consuming

Design

Carton

Production

department

- Marking or labeling the

cartons which have special

- The number of layers, the

type of paper, and especially

the paper material will

determine the hardness of the

carton

- Therefore, the choice of

paper structure is suitable and

can meet the bearing

capacity, saving cost and

increasing the beauty of the

product

- Now, Vinamilk is using E

to meet the needs of customers.Besides,Strengthenthe carton toprevent thegoods fromdamaging bycollisions

High cost

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recommend to use B flute

single wall instead

4.2.2 The second limitation

- Limitation: Can not control the exact time when the goods are delivered to thecustomer (K.A)

- Reason: Due to the weather condition or personal problems of the driver, thedeliveries might be delayed Meanwhile, whether the deliveries are completed or not

is recored, reported and certificated by the drivers (for Vinamilk’s vehicles) orcoordinators (for cars hiring from outside services) This leads to a fact that Vinamilkcould not identify whether the drivers deliver to key accounts at the right time or not.Futhermore, the company only consolidate and verify all delivery receipt once amonth

- Consequences:

o Affecting the prestige of the brand

o Causing the loss of the revenue and profit of the company

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o Creating the opportunities for competitors: For example, when customersneed Vinamilk’s products which are out of stock, they would choice thereplacement from products which are the same type but are belonged to theother brand (the competitor’s brands).

 Here are solutions that could improve the limitation above

Solutions Performer How to perform Advantages Limited

Re-train the

driver LogisticsManager

- Training new drivers from the beginning to create good habits

Training carefully for those who have worked for a long time

- Encouraging the driver with both material and spirit so that they can wholeheartedly take responsibility while working

Make them be more responsible

in the work and always put the interests of customers in the first place which will creates the trust for Vinamilk’s brand

- Depend on the awareness of individual-ly

- High cost

- Time consuming

to report to the company

Can control the delivery time and customer care

- Need to hiremore staff which leads

to more cost

- Market surveillance team may be

in collusion with the driver.Make a

membership

card for the

customer

Company - The company will

give a card to each customer with a separate card code for each person

- After the car arrives

- Easily control the information

of the customer

- Control the quantity and quality of

Additional costs for purchasing the device

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at the customer's

location, the car will

be unpacked and the

driver will use the

barcode reader (wedge

scanner) to check the

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