actual situation of inventory management and proposed solutions application of technology 4 0 at matai vietnam co ltd

STRUCTURE OF THIS STUDY Chapter 1: OVERALL MATAI CO., LTD COMPANY Chapter 2: LITERATURE REVIEW Chapter 3: CURRENT STATUS OF WAREHOUSE MANAGEMENT AND DATABASE BUILDING AND DATABASE MANAGE

Reason for choosing this topic

Import-export activities are considered a measure of the process of integration into the global economy during the period of economic liberalization Business enterprises are important to a country's economy Only when companies expand can the economy grow Each business can be considered a cell of the economy However, competition is fierce in the context of a market economy Vietnam has been a member of the World Trade Organization for some time now and although recent results have been positive, there are still challenges ahead The openness of Vietnam's economy brings many benefits to businesses, including the ability to export goods to other markets more easily, access to more modern technology and diversified suppliers However, the challenges that businesses face are not small In particular, Vietnam's economy is mainly based on agriculture, the economy is still fragile and small The problem is whether domestic enterprises are strong enough to compete with foreign corporations and businesses Businesses must know how to maintain their position in the face of such fierce competition Best solve customer requirements by providing high quality Items at reasonable prices

To accomplish so, organizations must monitor all phases of manufacturing and business process in addition to developing a suitable company plan From locating reliable suppliers to acquiring raw materials to finding an assured market for the product, boosting the pace of capital turnover and achieving high production efficiency Profit earnings generates conditions for capital accumulation and the expansion of industry

Inventory is a component of a company's working capital, and it accounts for a significant chunk of it As a result, inventory management is critical in the manufacturing and commercial operations of businesses Especially for enterprises who import items and raw materials from other countries Inventory management is in charge of keeping an appropriate quantity of inventory on hand to provide a smooth, continuous manufacturing process Furthermore, guaranteeing that there are enough

2 items to fulfill market demands As a result of better addressing client requirements, organizations' market competitiveness improves

Matai Co., Ltd is a prominent container bag producer and one of the major exporters of packaging and textile goods for distribution in local and international markets As a result, inventory management is one of the most pressing challenges One of the company's primary responsibilities is to improve inventory management in order to preserve commodities and raw resources, as well as to store these things

I've learned the value of inventory management thanks to the above concepts and my internship experience Consequently, I decided to make "Improving inventory management and proposed to apply 4.0 technology at Matai Vietnam Co., Ltd" the subject of my thesis.

Research Objectives

The author is applying SMART to get more details about the goal of the thesis:

- Specific: I will look for remaining causes in inventory management and from there will come up with solutions to overcome them

- Measurable: Make comments about shortcomings through the documents provided and provide comments for businesses to consider, apply new technology and build to manage inventory effectively

- Attainable: Technology including AGV, RFID, GPS, SWM to help optimize shipping processes, authenticate product information as well as real-time identification of inventory to improve processes Export and import processes as well as increase revenue for businesses in the long run

- Relevant: I will discuss with leadership departments how to apply and usefulness of new systems in warehouse management in general and the role of employees in general

- Over time: In the short time that modern technology has been applied to the factory,

I believe there will definitely be clear results.

Research object and research scope

- Research object: Inventory and inventory management at MATAI

+ Scope of content: Actual situation and solutions for inventory management

+ Scope of space: Warehouse management office at MATAI (VIETNAM) CO., LTD, Tan Thuan Export Processing Zone, Tan Thuan Dong Ward, District 7, City Ho Chi Minh

Research Methodology

Collect secondary information from company documents

Collect primary information: consult with the head of storage and maintenance at Matai

The topic is carried out by collecting information, synthesizing, analyzing, and processing data to provide solutions to improve warehouse management.

STRUCTURE OF THIS STUDY

Chapter 1: OVERALL MATAI CO., LTD COMPANY

Chapter 3: CURRENT STATUS OF WAREHOUSE MANAGEMENT AND

DATABASE BUILDING AND DATABASE MANAGEMENT SYSTEM FOR MATAI COMPANY LIMITED (VIETNAM)

Chapter 4: ASSESSMENTS AND SUGGESTIONS TO IMPROVE THE

EFFICIENCY OF INVENTORY MANAGEMENT AT MATAI COMPANY

OVERVIEW ABOUT MATAI CO., LTD COMPANY

Introduction to Matai

With the assistance of Mitsui, Nihon Matai traveled to Vietnam in the early part of 1995 in search of investment prospects They were drawn there by the low cost of labor and the government's efforts to entice international investment As a result, Matai (Vietnam), a business with 100% foreign ownership, was founded

Company name: MATAI (VIETNAM) CO., LTD

+ Address: Manufacturing area Tân Thuận, Tân Thuận Đông, District 7, HCMC + Website: www.matai.co.jp

+ Number of employees: 5 Japanese and 970 Vietnamese employees

In the Tan Thuan export processing zone, Matai Vietnam is recognized as one of the bigger foreign-invested companies operating in Vietnam and is classified as a middle-class company On May 22, 1995, Matai received an investment license after almost a year of building buildings, assembling machinery, and testing production After reaching its intended capacity in October 1997, the company began operating completely

History and Development

With a 100% investment from Japan, Matai Ltd Vietnam was established in March 1996 and has been in business ever since has a 10,000 m2 footprint and a 20,000 items per month capability In October 1998, the original facility was expanded by 20,000 m2 With a larger working capacity of 50,000 items per month, the company achieved the first ISO-9001 standard in December 2000 The company continued to operate with the aim of improving both processes and products The new "Neopallex bag's" manufacture is always being improved by the company A target of 60,000 items per month was set in January 2003 Given the outcomes and accomplishments, the business has continued to try to increase productivity, and as a result, in the ten years after its founding (March 1996–March 2006), the company's productivity has risen fourfold, from 20,000 to 80,000 goods per month The company received ISO 14001 accreditation in May of the same year, 2006 By 2008, the company's overall product production had increased to 10,000 units per month thanks to the steadfast efforts of every employee The company built a second facility to meet the needs of product manufacturing; it was operational in May 2009 and capable of producing 120,000 goods per month after just nine months of development After operating for more than a year, the company surpassed its capacity of 150,000 items in October 2010 The production rose to 180,000 items per month by August 2013

The business, which just marked its 20th anniversary, aims to increase product productivity while still pursuing quality certifications As a result of this dedication, the company mobilized FSSC-22000 at home in December 2016 In February 2017, factory No 1 and machine No 2 both acquired the FSSC-22000 certification In

March 2018, the company added ISO-9001:2015 and ISO-140001:2015 certifications to its list of achievements The company has been working hard to expand and have more success in the future.

Mission, vision and core values

Visions: By offering top-notch heavy duty packaging solutions with cutting-edge technology and services, Matai strives to be a firm with pride and a desire to contribute

7 to the growth of industry and lifestyle genuine distribution services, raise the worth of clients' goods

Misions: Offering items that are genuine and of the greatest quality to satisfy clients' highest expectations

CoreValues: Customer happiness: Through commercial endeavors, Matai gains the satisfaction and confidence of consumers and fulfills their aspirations for wealth

Compliance: Matai has high moral standards, meticulously abides by the law and the norms, and acts honestly at all times

Disclosure: Attempt to reach out to society broadly by publishing timely and reliable information

Employee Satisfaction: Each employee is valued by Matai, which works hard to provide a friendly, relaxing work atmosphere

Environmental protection: Matai has always taken the initiative to protect the environment worldwide

Contributing to society: Being a corporate citizen and giving back to society is excellent

Global: Matai works hard to respect cultural traditions, abide with rules and regulations, adapt to globalization, and advance the economy and society

Fields

100% of the capital of Matai Co., Ltd., a company that manufactures products and sells them to parent company Nylon Matai, comes from Japan The company's main line of business is heavy-duty packaging The primary products are jumbo bags, neopallex bags, nylon bags, fabric, PP textile, and export to serve overseas customers

The company's customers are: For domestic consumers, Japan, which accounts for 65% of the market, also accounts for a significant portion of the remaining 2%, which is mostly made up of Southeast Asian countries

Table 1.1 Main products of Matai

+ Made from polypropylene (PP), and is a large size packaging to hold and transport many different products such as cement, sand, fertilizer,

+ The load in the bag is usually in the range of 500kg -

+ This is a rather large bag, designed to serve many functions as well as many uses depending on the needs of the customer, for example: Breathable bag, (drainage), Flexible bag with pallet function, Flexible bag for package, etc

+ Made of PP/PE material, so it is highly reusable

+ This bag is a smart solution for clean, safe and efficient packaging

+ The bag is made of PE material and its color is transpare

Company organization

Currently serving as both the business's president and legal representative is Kazuo AITA The chairman has the most power since he is the corporation's owner

Kazuhiro HADARA serves as vice president of the business as the person in control of and accountable for the business's production processes In addition, a new president will be appointed to oversee and control the authorized work

The Vice President is the executive with the highest authority in the organization and is also in charge of developing and executing the company's production plans in addition to the work that has been allowed Additionally, provide objectives and guidelines for managing departments

Oversee the whole production process By managing production, the manufacturing division may make better use of its staff, equipment, and resources while generating less waste

In order to optimize sales, control manufacturing costs to ensure that goods are produced at the lowest feasible cost

Make sure the tools and machinery used in production are regularly kept in good condition Product quality has to be monitored and assessed

They supervise production equipment, perform tasks specified by their bosses, and help with yearly maintenance Participate in the recruitment, development, and training of subordinates

Organize the administrative chores for the company They could be in charge of recruitment, management, and training They could also aid in organizing the pay and benefit administration They could also participate in the evaluation of income, costs, and employee performance

The accounting department is responsible for carrying out financial and accounting responsibilities related to the firm in accordance with State regulations Plan the company's revenue, costs, and efficiency of operation in compliance with the legislation Create financial plans for the year, the quarter, and the month all at once Additionally, it offers the council financial direction on accounting and managing the organization's financial performance

One of the crucial divisions for the company's management of the overall operations and various facets of the company The corporation's administrative division is in responsible of supporting the board of directors with all staff

12 organization and management-related tasks The administrative department oversees the organization's human resources and plans annual company-wide celebrations like awards ceremonies and emulation games, among other things Additionally, manage all compensation, bonuses, social and health insurance, as well as other perks for all business employees.

LITERATURE REVIEW

Overview of inventory management

A company's inventory is its store of items, according to Nickerson (2001) A system for managing inventories keeps track of data about the items that the company stocks One example of the data that the business keeps track of is the quantity of each item on hand Nickerson continues by saying that the inventory management system provides information for the company's routine operations For instance, a salesperson may use the system to verify whether an item in a certain style is in stock

Additionally, the system provides data to support corporate management For instance, the system regularly reports on the quantity of each kind of goods on hand This information helps business managers decide whether to increase inventory by placing additional orders for items or commodities (if stock is low) or reduce inventory, maybe via a sale (if stock is high) As a result, the inventory management system supports management and business operations

Inventory management systems, according to O'Brien (2003), process information indicating changes to inventory items A computer-based inventory management system tracks changes to inventory levels after receiving information about a customer's orders for an order processing system, and it creates the necessary delivery papers After then, it may alert managers to things that need reordering and provide them a range of inventory status data Thus, inventory management systems enable a corporation to provide clients a high-quality service while lowering the cost of investing in inventory and the expense of holding inventory

The two authors who have written above have made it abundantly evident how crucial it is for a company to maintain track of its inventory in order to satisfy customer demand and restock supplies when necessary As a result, inventory management systems assist and provide information processing demands in enterprises These programs regulate the information flow in commercial activities

They make data easily accessible to support decision-making, empower managers to take well-informed judgments Yet inventory management systems, which are employed in all areas of all shapes and sizes of enterprises and organizations, increase the effectiveness and efficiency of information processing processes Therefore, in order to serve the expanding expectations of consumers and provide a level playing field for competition, businesses need to invest in dependent inventory management systems in order to thrive in this cutthroat business climate This requires the automation of crucial business processes like product registration and stock management

A business venture's capacity to serve clients or users and maintain its financial viability determines its success The main objective of a company that supplies items to its clients is to have the right products accessible in a timely manner at a fair price

Setting up this scenario involves several business components These are initially the marketing and design divisions Then comes buying and, perhaps, manufacturing The first task for a product that is already on the market is ensuring the clients have a constant supply

The practice of organizing the availability of goods to clients is known as inventory control To satisfy the demands of marketing, it coordinates the operations of production, distribution, and buying The provision of new products, consumables, replacement parts, obsolete goods, and other supplies is part of this responsibility

When the purchase or production of the goods is unable to meet demand, an organization might assist customer service, logistics, or manufacturing operations by keeping inventory Lack of pleasure may result from production taking too long or moving too quickly, slow buying, or the inability to provide volumes without stockpiles

The idea of "optimal" is constantly at odds with the concept of inventory management within departments within a corporation, but the meaning of "optimal" depends on which activity is deciding inventory Each of them has a distinct understanding of the function of inventory management Inventory control is thus unquestionably required to resolve such conflicts in the company's best interests

Sales believes that effective stock management allows the organization to have any item on hand that can satisfy immediate sales in as great a number as required: this requires substantial stock In contrast, bulking up shipments in distribution would result in excessive stock levels, thus a balance must be found

When making purchases, keep in mind that stock control gives you the chance to buy products at the best pricing Bulk purchases often result in lower buy costs and increased purchasing department productivity The shop is a way to keep the products you purchased in quantity at a discount

Stock is a concern for finance departments since it uses up a significant amount of working capital and disrupts cash flow

Therefore, inventory management is often given the task of maintaining the proper balance The volume and nature of inventory management can fluctuate as a result of changes in market and financial dynamics that influence product demand Successful inventory managers must make sure that the balance is maintained at an appropriate level since inventory management is a dynamic activity Professional communication and inventory strategies are necessary for this Operating procedures must be updated often to reflect changes, and the system must be modified to take into account new operating conditions and rules

 Minimize inventory costs and investments

 Make enough inventory available: The major goal is to make sure merchandise is always accessible on demand Because both inventory shortages and surpluses cost operational companies money The manufacturing line will be suspended if there is a lack of inventory As a consequence, output is limited or impossible

As a consequence, company suffers, resulting in lower revenue, lower profits, and, in the worst-case scenario, losses Excess inventory, on the other side, signifies that the flow of commodities takes longer to produce and distribute This indicates that if the money spent on inventory was spent elsewhere in the firm, it would earn a certain return Furthermore, it will lower implementation costs while increasing profitability

Benefits and costs of holding inventory

Businesses will profit from inventory holding in the following ways:

 Avoid business losses: Keeping inventory allows a firm to avoid losing money when goods are not accessible at a certain moment to satisfy client demand

 Take advantage of trade discounts while also lowering ordering costs: By accepting inventory reserves, organizations may acquire items in big quantities (more than current demands) to take advantage of commercial discounts from the supplier This lowers the cost of items sold, improving corporate profits At the same time, if the corporation puts big orders rather than a few small ones, it may be considerably decreased

 Improve manufacturing efficiency: Keeping enough inventory on hand also guarantees efficient production In other words, a proper inventory supply will avoid material shortages at certain moments, which might disrupt the manufacturing process Inventory storage, on the other hand, is not always required Good It is possible to say that excessive buying includes numerous dangers, and that facing unknown hazards would generate problems for organizations Keeping too much inventory without strategy can result in losses certain expenditures As a result, it is essential for a business to have a specialized strategy for inventory storage

At the same time, while a company benefits from inventory storage, corresponding expenditures develop, such as:

- Transaction charges, shipping expenses, and delivery costs are all included in order prices Order charges are determined per order in currency

- Ordering expenses include the costs of creating purchase requests, the costs of placing orders, such as negotiating costs (long-distance phone calls, business letters), the costs of receiving and checking items, and shipping costs - If the order comes from inside the company, the order cost simply covers production expenses, depreciation costs, and the costs of sustaining production operations

- In truth, the cost of an order often contains both fixed and variable expenses, since a part of order costs, such as shipping and inspection charges, sometimes vary with quantity ordered items

An essential component of a company's financial management and accounting is the cost of purchases made for inventory This is the sum of money spent by a company to buy items or products that are still in stock and have not yet been sold out The following components are often included in this cost:

 Cost of Goods Purchased: This is the exact amount you paid to the provider when you purchased the items or commodities This covers the initial price of the goods as well as any shipping fees, taxes, or other charges involved with the transaction

 Shipping and Handling Costs: If you have to pay extra to transport products from the supplier to your warehouse, or if you have additional expenses involved with processing the goods, these charges are also included in the cost of inventory acquisitions

 Storage Costs: The price of purchases for inventory should also account for any charges linked to maintaining and storing goods, such as warehouse leasing fees, insurance for warehouses, and other related costs

 Special Handling Costs: If you have any additional expenditures related to managing the items or commodities in the warehouse (e.g., special packaging, constant temperature storage), they are also included purchasing prices

The cost of acquiring inventory is significant since it influences a company's earnings and the cost of the end product To effectively manage this cost, organizations must carefully monitor all expenses associated with acquiring, shipping, and keeping inventory and implement strategies to optimize them, hence maximizing profit

- When a company can't provide items because there's a higher demand than what can be held in the warehouse, damage costs resulting from out of inventory happen

- The price of damage resulting from a shortage of raw materials includes the price of urgent ordering and the price of damage from a halt in production when raw materials are no longer available

- The company will experience losses as a result of production plans needing to be altered when the supply of unfinished goods runs out Production delays may also result in losses

- Running out of completed goods inventory may lead to lost revenues in the near term if consumers choose to purchase items from rival companies, as well as possible long-term losses if customers choose to purchase products from rival companies plan to place future orders with other companies

- All expenses associated with keeping products on hand for a certain amount of time are included in storage costs expenses associated with preservation and storage, spoilage and damage resulting from outdated inventory, insurance, taxes, and cost expenses are among the storage costs' component costs Purchase inventory the following:

 Warehouse costs: When a company leases a warehouse, this expense is equivalent to the monthly rent The potential cost of utilizing the warehouse, if held by the company, is equivalent to this expense Depreciation expenses for warehouse support equipment like conveyors and specialized forklifts, as well as the cost of paying security guards and other operational staff salaries, are also included in the storage and preservation costs

 Costs for using equipments and facilities: is a significant expense associated with managing storage and warehouses This comprises the charges and costs related to the usage and upkeep of the tools and infrastructure required for managing, moving, and storing inventory

Inventory management control systems

A perpetual inventory system continuously updates records to the inventory account for additions and subtractions when inventory goods are acquired, sold from the warehouse, or transferred from one place to another Some businesses use perpetual inventory systems because they give up-to-date inventory information and

25 manage minimal physical inventory volumes more effectively When maintained correctly, perpetual inventory systems are also preferable for inventory monitoring since they deliver reliable data on a continuous basis This sort of control system works best when combined with a database of inventory amounts and stock locations that is constantly updated by warehouse personnel utilizing barcode scanners

 Disadvantages : High cost for monitoring

Periodic inventory systems do not monitor inventory on a daily basis; instead, they enable companies to know the beginning and ending inventory levels for a certain time period Physical inventory counts are used to track inventory in these sorts of inventory management systems Normal company activities are essentially halted until physical inventory counts are done As a consequence, because to time constraints, personnel may hurry through their physical duties Because there is no continuing management over inventory, errors may arise when you install a periodic inventory system

 Advantage : recording and controlling need less effort

 Disadvantages : Due to a lack of stringent control, the order amount varies abnormally in the presence of supply and demand changes in this system

In inventory management, ABC analysis is the categorization of a collection of things in decreasing order based on their value to the company In terms of value provided to the firm, Group A products are the most valuable, while Group C things are the least valued More specifically:

 In most cases, Group A represents just 15-20% by quantity but 70-80% by value

 Group B represents 30% of the products but 15-25% of the value

 When compared to Groups A and B, Group C contains the most goods, but it is also the least valuable

The Pareto principle, commonly referred to as the 80/20 rule, asserts that just 20% of causes lead to 80% of the effects, demonstrating the uneven correlation between input and output 80% of outcomes often originate from 20% of causes, according to the conventional rule of thumb According to ABC research, 20% of an organization's yearly sales value are made up of 20% of things like type A items The remaining 20% is made up of types B and C together Depending on the company's product line, the 20% will be split differently between categories B and

 Establish safe inventory levels to maintain in order to minimize stock shortages for critical commodities

 Determine suitable inventory management levels, such as when priority goods may be checked more regularly or automatically counted to augment human inspections

 Inventory may be found in individual warehouses as well as warehouse networks

 Because product trends fluctuate with the market, products may shift unpredictably (from C to A or A to C) A company's present ABC categorization

27 might quickly become out of date if management do not conduct continuous study

 It takes a long time to regularly examine and categorize the three groupings

JIT is a concept in contemporary production JIT can be summarized as "the right product - in the right quantity - at the right place - at the right time." In other words, JIT is a production operating system in which the flows of raw materials, items, and products circulating in the manufacturing and distribution processes are meticulously planned step by step, so that the process runs smoothly As soon as the current process finishes, the next process may begin As a result, no item in the manufacturing process is idle or waiting for processing, and no personnel or equipment are required to wait for input to function The most essential aim of JIT is to produce a balanced system in which materials are cycled quickly throughout the system, reducing processing time and making the optimal use of resources The degree of accomplishment of the above overall aim is reflected by the particular targets listed below

 Reduce preparation time and lead time

 Minimize inventory and capital stagnation

 Reduce scrap and defective products

 Increase productivity by reducing waiting time

 Flexibility in changing production processes and changing product designs

 Workers are deeply involved in improving and improving productivity and product quality

The economic order quantity (EOQ)

Total Ordering Cost (TOC) and Total Handling Cost (THC) are the two categories of expenses that are addressed by the fundamental EOQ model, which takes all presumptions into account This explanation makes it clear that when a given number of volumes are purchased for storage, both costs go in different directions As a result, it's critical for a company to choose a quantitative trade-off point in order to reduce the overall cost of both: TOC plus THC The Economic Order amount (EOQ) in this instance is the amount that should be ordered to reduce the overall cost of both TOC and THC

Because TOC has a negative relationship with the quantity to be ordered and THC has a positive relationship with the quantity to be ordered, the total minimum cost of both TOC and THC is the intersection point of both cost lines that can produce: (a) the total cost of both TOC and THC as low as possible; and (b) the number of quantities to be ordered (known as EOQ) to meet the lowest cost (see Figure)

Figure 2.1 Graphical Determination of Economic Order Quantity

This model is one of the most common and oldest inventory management strategies, having been investigated and introduced in 1915 by Mr Ford.W.Harris, and is still utilized by the majority of firms today The EOQ model is only useful when the following requirements are met:

 Goods demand is predictable and consistent (constant)

 The execution time of an order is known in advance and stays constant

 The amount purchased is delivered in a single shipment

 Only the expenses of ordering and storing are covered

 When orders are completed on schedule, there are no shortages

 There are no volume discounts

Notably, from a buying standpoint, TOC and THC are the extra expenditures incurred over the cost of a commodity acquired As a result, the sum of both costs

(TOC and THC) is known as Total Incremental Cost, i.e., TIC = TOC + THC

TOC and THC are the extra expenses incurred beyond the initial purchase price of an item in the context of EOQ

And we will have the following formulas:

And this is the Calculation formula of Total Ordering Cost

Total Ordering Cost ( TOC) = (Annual demand * Cost per order) /

And this is the Calculation formula of Total Handling Cost

Total Handling Cost (THC) = (Ordering quantity* Handling cost per unit) / 2

CH: Handling cost per unit

From the above two formulas, we can deduce the combined formula as follows:

Length of inventory cycle (provided with daily usage ‘d’ of the product):

The length of the inventory cycle is a metric that indicates how long a batch of EOQ may be stored for As the products are manufactured/supplied, the daily consumption (d) of the item is reduced in the EOQ stored As a result, the duration of the inventory cycle reveals how many times (T) the item's total daily consumption correlates to the EOQ As a result: We have a formula to calculate Length of inventory cycle as shown below

The reorder point quantity/stock level of an item is the point at which the product requires an order to be placed in order to replace the stock without disrupting trade processes In other words, it is the stock level to be used during the stock replenishment lead-time Following the quick refilling of EOQ, daily consumption of the product is removed from store stock In this context, the reorder point may be found by taking into account the product/item's daily consumption (d), lead-time for restocking the EOQ (TL), and safety stock (GS)

 If a company does not have a policy of maintaining a safety stock level of that item, the reorder level formula will be calculated as follows:

Reorder Level (ROL)= (Daily Usage) (Lead-time in days)

 If a firm maintains a safety stock level of the item, the reorder level formula will be calculated as follows

Reorder Level (ROL) = (Daily Usage) (Lead-time in days) + (Safety Stock)

The reorder point quantity/stock level of an item is the point at which the product requires an order to be placed in order to replace the stock without disrupting trade processes In other words, it is the stock level to be used during the stock replenishment lead-time Following the quick refilling of EOQ, daily consumption of the product is removed from store stock In this context, the reorder point can be found by taking into account the product/item's daily consumption (d), lead-time for restocking the EOQ (TL), and safety stock (GS)

Through Chapter 2, we can more thoroughly understand concepts related to inventory, thanks to which we have a more in-depth and specific view in the following chapters

CHAPTER 3: CURRENT STATUS OF WAREHOUSE MANAGEMENT AND DATABASE BUILDING AND DATABASE MANAGEMENT

SYSTEM FOR MATAI COMPANY LIMITED (VIETNAM)

Production process

Organizing the production process into 7 main stages helps Matai Company (Vietnam) maintain continuity and efficiency in the product manufacturing process: Importing materials for storage  Spinning department  Weaving department and belt weaving  Preparing  Sewing department  Storage and Export Each step plays an important role and is the next step in the production chain

This is a continuous process, the products of this department will be the main raw materials for the next department To better understand the factory's production process, let's look at each department in turn:

The buying section is in charge of importing raw materials, which are mostly plastics and base additives CaCO3 granules, anti-aging UV granules, package colorants, and a variety of additional additives are used to enhance and modify product qualities

CaCO3 granules are often used to improve the hardness and durability of plastics We contribute to the final product's impact resistance, gloss, and printability

UV anti-aging particles serve a vital function in shielding goods from the impacts of UV radiation and other environmental conditions This prevents the goods from changing color or being damaged due to sunlight and other reasons

Packaging colorants are often used to generate colors and graphics on the finished product, making it more appealing and readily recognized

Other additives may be used to change the qualities of certain products, such as resilience, heat resistance, chemical resistance, and many more This raw material is imported and kept in a secure location to assure quality and readiness for manufacturing

Technical management is required to guarantee that raw materials are appropriately kept to prevent loss or damage during usage

Figure 3.0.1 The bags of ingredients are put into the warehouse for storage

Workers blend the plastic particles, CaCO3 particles, UV particles, and basic additives in exact ratios before feeding them into the extruder This method requires technical study and management to ensure that the combination achieves the desired quality and attributes

The extrusion process starts after the raw material combination is ready Workers may alter the extrusion process to generate thick or thin plastic filaments based on the intended usage and needs of the product This is connected to extrusion pressure and temperature The objective is to create yarn with the best gloss, color, and flexibility possible

The yarn is pulled and stretched after extrusion to guarantee consistency and exact measurements This technique enhances the mechanical qualities of the fibers and assures their quality

The yarn will next be transferred to the twisting machine Small fibers and big fibers are separated here Small fibers may be maintained and promptly employed in the end product's manufacture, while big fibers can be spun and altered to fit particular client specifications This guarantees that the finished product satisfies the necessary specifications and standards

The amount of twisted yarn to be produced is determined according to the customer's requirements, ensuring that the product will meet their exact size, color and characteristics This is an important part of the manufacturing process, especially when the final product needs to meet strict market and customer requirements

3) Weaving and belt weaving department

The production process at the weaving and belt weaving department of Matai Company (Vietnam) is an important part in turning plastic raw materials into final products This is a critical step in the manufacturing process and requires technical expertise and attention to detail to ensure that the product meets customer requirements and quality standards

Part of this process is the weaving of plastic fibers together to create products such as fabrics and belts Depending on the intended use, fibers can be combined to create specific properties This requires engineering considerations to ensure that everything is adjusted properly

After manufacturing the threads and straps, a portion of the threads will also be braided into rope This wire plays an important role in tying the input and output of the product, ensuring that the final product will be connected and have the necessary durability

Additionally, for bag products, the yarn is also woven into specific straps for the bag These straps play an important role in creating parts such as straps or bag straps, improving the durability and aesthetics of the product

After the weaving process, the product will be prepared for the next stage of the production process.

Figure 3.0.3 Belt weaving machines to create belt

Figure 3.0.4 circular loom used to weave fabric

Following the creation of completed items from raw materials, the stage of preparing and creating the final product is critical It is an element of the production process that requires precision and attention to detail Employees must be diligent in segregating and organizing accessories by shipment Straps, buttons, zippers, and specific fabric pieces are examples of these accessories This procedure guarantees that all of the specifics for the final product are ready and well-managed The original product will be ready for sewing when the accessories have been arranged

Figure 3.0.5 Staff preparing and printing semi-finished products

This is a step that focuses on precision and detail, requiring high technique and quality control Here's a more detailed look at the process:

Receive prepared products: In this step, the semi-finished products from the previous steps are prepared and placed to form the finished product Staff will check and confirm that these products meet customer requirements and are fully prepared

Machinery and equipment table

Machine and device name The number of machines)

Other equipment and machinery, in addition to the major equipment described above, including baling and packing machines, printing machines for printing pictures on bags, cutting equipment for textiles and textile materials, and rope braiding machines Furthermore, the company has a variety of equipment to ensure the quality of the bags, such as clean air blowers, UV testers, and fiber strength testers

To facilitate factory administration and operation, the Group separates the manufacturing process into three major groups:

Machine group 1: Yarn and weaving machine group

Machine group 2: Sewing machine group, fabric cutting machine

Machine group 3: Testing machine group.

Forecasting at Matai Co., Ltd

Matai (Vietnam) Co., Ltd has developed a long-term and medium-term growth strategy, with specific plans for each year and every three years However, developing this plan is not a stand-alone procedure It instead makes use of a comprehensive database offered by the main firm (Nihon Matai) This database contains information on product categories, output, and a variety of other essential topics

To better understand the local and worldwide business environments, the subsidiary conducts complicated operations such as market research, customer research, market trend assessment, and competition evaluation In addition, the

44 subsidiary selects product sales volume and new product development paths depending on assistance from the parent firm

This demonstrates that Matai (Vietnam) Co., Ltd is a superb illustration of how independence and reliance may coexist in corporate operations They must not only depend on their parent company's resources and advice, but they must also be clever and adaptable in adjusting to market developments and consumer wants

Matai (Vietnam) Co., Ltd develop long-term plans for investment, finance, and people based on long-term estimates of consumer production and new offered goods by Nihon Matai Company At Matai Company (Vietnam), a forecast is simply a financial plan (budget) created for a maximum of three years It contains the department plans listed below: a) Production plan: Indicate how much is produced in each month of the planned period Planning personnel must first use the company's current production capacity in conjunction with the projected sales volume for the time, based on the production output plus inventory concept There must be adequate warehouse space during such time to accommodate consumer demands b) Investment plan: The corporation will increase the size of production if there is a long-term trend and demand surpasses production capacity The company's board of directors and experts will consult to decide on the kind and amount of equipment that must be bought, the size of the factory that must be increased, and the best moment to expand the factory or acquire new equipment The investments required to complete or enhance the present manufacturing process are also included in the investment plan c) Staffing plan: Calculate the amount of extra work required in each period based on the investment plan d) Estimate costs: Estimate essential expenditures throughout the planning process and categorize them based on their type and consequences e) Plan to purchase raw materials: Based on production and period product output, historical data (raw material costs), and purchase credit terms for with

45 suppliers (average collection time), the summary of acquired raw materials sales and accounts payable is prepared for each period f) Financial planning: Constructed using the projected production and business activity over the duration of the plan, in addition to the investment plan The financial plan's goal is to schedule the financing sources that will be used and paid back throughout the planning stage

Another distinguishing feature of Matai (Vietnam) Co., Ltd is that its products are industrial goods made to order It is difficult to reach new clients with Matai (Vietnam) items, yet customers who have selected the company's products often do not change As a result, the company's market share is difficult to expand suddenly but is often quite steady However, since the company's goods include a wide range of packaging, the growth or reduction in predicted production is often influenced by changes in consumer output in other sectors Because of this feature, the company's long-term prognosis is very difficult to govern In other words, whether sales production increases or decreases is determined more by the activities of partners than by the firm itself Consider that, despite the fact that the firm provides high-quality items at cheap rates, the companies that employ the company's products lose market share, and consumption of Matai (Vietnam) products declines, even though it should grow logically Long-term forecast errors in Matai (Vietnam) are relatively significant due to the aforementioned factors Long-term forecasting also takes into account long-term elements such as market trends, greater investment prospects, and the creation of new goods Matai must gather and share data to efficiently address consumer demands in the near term in order to make long-term projections

Unlike long-term projections, short-term estimates of Matai Company

(Vietnam) consumption and manufacturing output are typically simple and accurate Yes, short-term projections of consumption and output are often simpler and more accurate than long-term estimates Short-term projections typically apply to time spans ranging from a few weeks to a year During this period, parent firm Nihon Matai intends to negotiate with consumers on the number and kind of items

46 that will be provided to them for each month of the year Matai (Vietnam) will have a full perspective of its actions in the following year based on this information source, with a very high degree of trustworthiness As a result, their short-term projections are very accurate and reliable This allows them to quickly alter production, inventory management, and distribution to match client demands.

Matai's inventory management system

As previously stated, Matai Co., Ltd.'s manufacturing method is a continuous process comprised of seven phases The company's goods are not standard (they go through numerous processes from raw materials to finished product), but are made to order The inventory of the firm contains a wide range of commodities Many objects are utilized in an unstable manner As a result, inventory management in Matai

(Vietnam) is notoriously complex and complicated In truth, the organization has not recently developed an inventory model that adjusts to its unique qualities

Matai Co., Ltd (Vietnam) has implemented a warehouse card system and selected an integrated inventory tracking approach specifically, all daily inventory changes are promptly updated on the warehouse card (each inventory item has its own warehouse card), and the firm performs a complete inventory check every month to examine the inventory Fix typos in regular declarations Furthermore, the Matai

(Vietnam) warehouse is an open warehouse This implies that anyone may access the warehouse and obtain supplies without having to go through the warehouse keeper, who is the key holder This warehousing system offers the advantage of minimizing time-consuming processes and deferring essential documentation to allow inventory to circulate more quickly to meet urgent production needs However, this approach requires a high level of self-discipline from workers because if they do not record or report inaccurately the amount they have taken from the warehouse, the inventory level based on the warehouse manager's papers will not match reality This causes the warehouse layout to become more disorganized, and warehouse managers have several challenges in updating inventory

Table 3.0.2 Compare inventory levels over the past 3 years of Matai Co., Ltd

 Total raw materials consumption in 1 year

 Average daily consumption of raw materials

- Raw materials inventory levels should be maintained:

In Matai (Vietnam), the real inventory level is often significantly higher than the required inventory level This implies that businesses often stockpile more raw materials than necessary, squandering resources and money However, there are several critical difficulties with inventory inspection and management

A critical challenge is how to organize products in the warehouse The arrangement system is not explicitly maintained in Matai (Vietnam) The warehouse does not have a location map, and there are no clear restrictions for how things should be arranged while entering or exiting the warehouse This causes havoc with inventory storage and management Inventory items might be found in a variety of places, making it difficult to monitor and update inventory data

The disorderly placement of commodities in the warehouse complicates inventory and warehousing labor Inventory is often missed or forgotten, resulting in erroneous information in the inventory management system Because certain things on the books are still reported as being in stock but are really out of stock, this might create production delays owing to a shortage of raw materials or excessive inventory levels

Furthermore, the Matai (Vietnam) warehouse is constructed as an open warehouse In terms of management, the open warehouse structure in Matai (Vietnam) may aid in the reduction of complicated processes and the acceleration of inventory movement warehouse to fulfill sudden manufacturing demands However, this approach requires a high level of self-awareness on the part of workers If they fail to record or report accurately the number of products removed from the warehouse, there will be a discrepancy between the management system and the real inventory

Furthermore, hours mismatch is a significant concern Some of the company's manufacturing stages run constantly around the clock, while management warehouse employees work during business hours As a result, warehouse layouts grow more disorganized, and warehouse managers struggle to keep inventory information up to date These concerns must be addressed and corrected in Matai (Vietnam) to promote more efficient inventory management and a smoother manufacturing process

3.4.1 Just in time at Matai Co., Ltd (Viet Nam)

Table 3.0.3 Statistics on disruptions due to lack of raw materials

1 Number of machine dute to lack of raw materials

2 Number of days of machine downtime

Matai's complicated manufacturing methods and made-to-order manufacture not only complicate inventory management but also make "Just in time" implementation challenging

Each Matai company's product needs a distinct sort of component, therefore it is critical to have appropriate ingredients for each product type Furthermore, relatively few raw ingredients are utilized, yet the end product would be difficult to make without them As a result, although certain raw resources are in plenty, others are in low supply at times

This dilemma is not limited to inventory management; it also has an impact on the overall aim of the "Just in Time" (JIT) approach When inventory is not managed properly, when interruptions due to a shortage of inventory continue, JIT objectives such as making the production system flexible and lowering lead times cannot be fulfilled Reduce losses in the preparation and manufacturing cycle

In summary, inventory shortages and inadequate inventory management are making it difficult for Matai Company (Vietnam) to achieve production efficiency and JIT targets Product optimization manufacturing processes, inventory management, and product and materials management procedures may be required to improve the problem.

Database overview for Matai company

Matai Company (Vietnam) is presently developing a robust database system as well as strong support tools to achieve high efficiency in production planning, buying, and inventory management Despite the fact that information regarding production and operations in each department is connected, the majority of those processes are done manually This is intrinsically inappropriate for complicated manufacturing operations Matai (Vietnam) Co., Ltd is creating a database to help with production schedule planning and inventory management

Matai (Vietnam) Co., Ltd.'s database is separated into five sub-databases

Database of customer orders: Includes all relevant information regarding orders received by the firm, such as product code, amount, delivery date, and location It includes information on all of a customer's purchases, such as the items or services purchased, as well as shipping and payment details This database businesses supports in properly tracking and managing client connections

Database for inventory management: Includes information regarding the operations of the company's products inventory, such as amount delivered, quantity received, and current inventory level at any given moment or period It aids in the tracking and management of product or products inventory, providing efficiency in the management and optimization of firm assets

Database of purchasing activities: Included are all orders that the firm has implemented, such as the order date, projected delivery date, and supplier data for each order product, such as the kind and amount of each raw material At the same time, it includes information on the state of each order's performance

Database of production statistics: The firm produces and warehouses statistics on the number of completed items as well as semi-finished products It aids in the monitoring, management, and analysis of industrial activities to ensure performance and efficiency

ASSESSMENTS AND SUGGESTIONS TO IMPROVE THE

Remaining aspects in inventory management at the company

Inventory management is a task that is intertwined with many other divisions inside the firm, which creates several challenges Inventory management flaws might include the following:

Product predictions continue to be too dependent on the parent business, and since the firm does not spend enough in the marketing department, market research continues to be challenging Because the economy is now uncertain, people's spending requirements are similarly subject to various unpredictability fluctuations Capturing corporate data still has several difficulties

As discussed in Chapter 3, medium- and long-term projections of one and three years, respectively, are quite troublesome in this case They often rely on predicting primarily on consumer purchase history and market trends, but overlook equally significant forecasting aspects such as economic issues, social factors and politics, competitive marketplaces, and so on Because the data is given indirectly by the parent corporation, it may be erroneous or omitted, resulting in faulty estimates

The disorderly placement of commodities in the warehouse complicates inventory and warehousing labor There are several causes for this, of which I shall name a few:

 Still using manual inventory management: It is hard to manage inventories properly if notes are still taken on paper using a pen It easily leads to data inaccuracies and takes a long time Instead of scribbling product information and quantities, inventory management software enables for computerized data entry and storage into the system This will improve warehouse organization and management

 Failure to comply with placement rules: Matai Company has implemented a warehouse card system, which allows anyone to access the warehouse and get supplies without going through the key holder, the warehouse keeper As a result, product management is tough since it is dependent on the employee's self- discipline The warehouse layout regulations are also broken Employees do not correctly place and categorize merchandise according to instructions This might result in the haphazard positioning of things, resulting in pandemic

The firm has not defined the precise reserve requirements Because customer requirements fluctuate over the time, enterprises must quickly comprehend them

Errors are unavoidable while obtaining market information due to staff's insufficient professional and technical skills, resulting in erroneous information processing.

Company development policies

The company's goods must all meet established quality requirements Not only must local regulations be met, but the highest quality standards worldwide must also be met This is the foundation for gaining consumer trust and growing the market

Always have rules and processes in place to guarantee client satisfaction

Customers are the most important contributors to our growth The company's primary priority are their trust and loyalty

Improve managerial and technology processes on a continuous basis to maximize production and commercial operations This comprises recruiting, training, organizing, and implementing wage policies geared at developing and nurturing human resources in order to assure long-term growth

Safety in the manufacturing process, worker health, and technical and environmental cleanliness are always top considerations for the organization We are

60 devoted to following occupational safety and environmental protection norms and regulations in order to provide a healthy and safe workplace for everybody

The corporation is constantly aware that its operations are not only tied to corporate objectives but also have a social duty Matai is dedicated to contribute to the country's progress and prosperity via its operations and social duties

1 Training and enhancing Management personnel Knowledge: Continue to engage in training and enhancing management personnel knowledge and credentials This is to guarantee that they can satisfy the expanding and changing market demands Individual growth, according to the firm, will add to the organization's success

2 Staff Organization and Effective Management: Matai pledges to continue to excel in staff organization, team development, and staff planning This ensures that our work is passed down and developed, and it always gives opportunities for individuals to grow and progress within the organization

3 Emulation Movements and Initiatives Development: Organizing emulation movements, encouraging initiatives, and supporting scientific and technological advancement Matai will also aim to develop labor professionalism in order to increase job efficiency and effectiveness This contributes to the company's ability to survive and prosper in a competitive business climate Always establish circumstances for all firm personnel to take initiative in contributing to the current and future quality of goods, processes, and goals And every initiative, no matter how tiny or great, will be accepted by superiors and, if suitable, rewarded This encourages all workers to strive every day to attain their own ideals while also adding value to the organization as a whole

CONCLUSION

CHAPTER 1: OVERVIEW ABOUT MATAI CO., LTD COMPANY 1.1 Introduction to Matai

With the assistance of Mitsui, Nihon Matai traveled to Vietnam in the early part of 1995 in search of investment prospects They were drawn there by the low cost of labor and the government's efforts to entice international investment As a result, Matai (Vietnam), a business with 100% foreign ownership, was founded

Company name: MATAI (VIETNAM) CO., LTD

+ Address: Manufacturing area Tân Thuận, Tân Thuận Đông, District 7, HCMC + Website: www.matai.co.jp

+ Number of employees: 5 Japanese and 970 Vietnamese employees

In the Tan Thuan export processing zone, Matai Vietnam is recognized as one of the bigger foreign-invested companies operating in Vietnam and is classified as a middle-class company On May 22, 1995, Matai received an investment license after almost a year of building buildings, assembling machinery, and testing production After reaching its intended capacity in October 1997, the company began operating completely

With a 100% investment from Japan, Matai Ltd Vietnam was established in March 1996 and has been in business ever since has a 10,000 m2 footprint and a 20,000 items per month capability In October 1998, the original facility was expanded by 20,000 m2 With a larger working capacity of 50,000 items per month, the company achieved the first ISO-9001 standard in December 2000 The company continued to operate with the aim of improving both processes and products The new "Neopallex bag's" manufacture is always being improved by the company A target of 60,000 items per month was set in January 2003 Given the outcomes and accomplishments, the business has continued to try to increase productivity, and as a result, in the ten years after its founding (March 1996–March 2006), the company's productivity has risen fourfold, from 20,000 to 80,000 goods per month The company received ISO 14001 accreditation in May of the same year, 2006 By 2008, the company's overall product production had increased to 10,000 units per month thanks to the steadfast efforts of every employee The company built a second facility to meet the needs of product manufacturing; it was operational in May 2009 and capable of producing 120,000 goods per month after just nine months of development After operating for more than a year, the company surpassed its capacity of 150,000 items in October 2010 The production rose to 180,000 items per month by August 2013

The business, which just marked its 20th anniversary, aims to increase product productivity while still pursuing quality certifications As a result of this dedication, the company mobilized FSSC-22000 at home in December 2016 In February 2017, factory No 1 and machine No 2 both acquired the FSSC-22000 certification In

March 2018, the company added ISO-9001:2015 and ISO-140001:2015 certifications to its list of achievements The company has been working hard to expand and have more success in the future

1.3 Mission, vision and core values