report assignment productivity improvement

Figure 3.1.3 Product process performance3.2 Value Stream Mapping Figure 3.2.1: Value Stream Mapping of VinamilkSuppose the input of Vinamilk factory is 360,000 liters of fresh milk, ther

HANOI UNIVERSITY OF SCIENCE AND TECHNOLOGY

SCHOOL OF ECONOMICS AND MANAGEMENT

REPORT ASSIGNMENT

PRODUCTIVITY IMPROVEMENT

Department Logistics and Supply Chain Management

HANOI, June 2021

We assure that this is my own research report All the data, figures in the reportare from my own study and cited fully from known sources We do not copyfrom any documents and do not violate the regulations for plagiarism

ACKNOWLEDGEMENT

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The completion of this assignment could not have been possible without theparticipation and assistance of a lot of individuals contributing to thisassignment However, we would like to express our deep appreciation andindebtedness to our lecturer, Ph.D Nguyen Thi Xuan Hoa who spent herprecious time teaching us a lot of useful knowledges that is a formation to dothis assignment

In the process of researching, we have tried to complete it well, but due tolimited knowledges, appearing problems can be inevitable, we are willing toreceive the feedback, and further instructions of lecturer and readers so that wecan broaden our horizons and do it better in the next assignment

LIST OF FIGURES 5

LIST OF TABLES 6

EXECUTIVE SUMMARY 6

1 INTRODUCTION ABOUT COMPANY 7

1.1 Introduction 8

1.2 Vision 8

1.3 Mission 8

2 DATA COLLECTION OF 3 YEARS (PRODUCTIVITY INDEX) 9

2.1 Spreadsheet of intermediate indicators 9

2.2 Spreadsheet of productivity indicators 11

2.3 Comments 12

3 DATA ANALYZING 13

3.1 Chart 13

3.2 Value Stream Mapping 14

4 PRODUCTIVITY IMPROVEMENT 19

4.1 OEE calculation 19

4.1.1 As was 19

4.1.2 As is 20

4.2 Wastes 20

4.3 Solutions 20

REFERENCES 21

TASK DESCRIPTION 22

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LIST OF TABLES

Table 2.1.1 Intermediate indicators in 2021 8

Table 2.1.2 Intermediate indicators in 2020 9

Table 2.1.3 Intermediate indicators in 2019 10

Table 2.2.1 Productivity indicators in 2021 10

Table 2.2.2 Productivity indicators in 2020 11

Table 2.2.3 Productivity indicators in 2019 11

LIST OF FIGURES Figure 3.1.1 Labor cost performance 13

Figure 3.1.2 Earning Power 13

Figure 3.1.3 Product process performance 14

Figure 3.2.1: Value Stream Mapping of Vinamilk 14

Figure 3.2.2: Raw fresh milk receive area 15

Figure 3.2.3: Cold tank (150m3/tank) 15

Figure 3.2.4 and 3.2.5: Centrifugal Separation of Bacteria Machine 16

Figure 3.2.6: UHT pasteurazation system 17

Figure 3.2.7: Filling system 17

Figure 3.2.8: Automatic LGV Robot 18

EXECUTIVE SUMMARY

At the beginning of the report, our team gives an overview of the generalinformation about process, along with the company’s mission and vision, theorganizational structure, products as well as the market that the company exploits.For the part of analysis of productivity, our team has studied financial report inthe years 2019, 2020, 2021;Calculate intermediate and productivity index;compare data over the years by drawing some charts The results show thatbecause of 1 number of fluctuations and difficult conditions occurring in the 2years of the Covid 19 pandemic, the company actually bad affected especially in

2021 In addition, in order to analyze production activities in a specific anddetailed way, we simulate the flow of the company's activities through the ValueStream Mapping model, introduce some applications and analyze the production

to detect wastes and bottlenecks that exist in the process Then we calculate OEEbefore and after using 1 method to improve manufacturing, so that we all can seehow exactly it helps Finally we found some wastes and offers several number ofsolutions for the company

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1 INTRODUCTION ABOUT COMPANY

1.1 Introduction

Vinamilk – the biggest dairy company in Vietnam was established on August 20, 1976 on the basis of three dairy factories fron the old regime:

Thong Nhat Dairy Factory (formerly known as Foremost factory)

Tho Dairy Factory (formerly known as Cosuvina factory)

Dielac Powdered Milk Factory (formerly known as Nestl@ factory (Swiss).CEO: Mrs Mai Kieu Lien

Since commencing operation in 1976 they have built the largest distribution network

in Vietnam and have leveraged the network to introduce new products to the market, such as juices, soya milk, bottled drinking water and coffee

Their Products Range:

From core dairy products such as liquid and powdered milk, to value-added dairy products to value-added dairy products

Since commencing operation in 1976 we have built the largest distribution network in Vietnam and have leveraged the network to introduce new products to the market, such

as juices, soya milk, bottled drinking water and coffee

1.2 Vision

Vinamilk will be the fastest and sustainable growing healthy dairy and food company

by building the longterm competitive advantage product portfolios across the scale

1.3 Mission

Vinamilk continues to expand its existing geographical coverage and product portfolios to maintain its sustainably dominant in the local market and maximizing its shareholder value

1.4 Strategy

has established the Vinamilk brands

large

the purpose of expanding the market and increasing sales

- Continuing to penetrate new export markets with the strategy of converting thetraditional goods export model into types of deep cooperation with the distributionpartners in new key markets

INDEX)

2.1 Spreadsheet of intermediate indicators

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Table 2.1.1 Intermediate indicators in 2021

Table 2.1.2 Intermediate indicators in 2020

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Table 2.1.3 Intermediate indicators in 2019

2.2 Spreadsheet of productivity indicators

Table 2.2.1 Productivity indicators in 2021

Table 2.2.2 Productivity indicators in 2020

Table 2.2.3 Productivity indicators in 2019

2.3 Comments

of the activities and maintenances, it aims to reach the efficiency in operation andensure quick maintenance response From 2019 to 2021, the TPM will fluctuate but ittends to decrease slightly due to the impact of covid 19

the long haul You can see in the last 3 years, this variable also decreased but notsignificantly

2019 to 2021, we can see the clear impact of the covid 19 pandemic on the company's productivity, covid makes the supply and The demand is broken, from which profits decline, leading to the company having to reduce wages, bonuses and policy to cut payrolls for employees, the main reason for the decrease in average labor costs and labor productivity, thereby reducing production efficiency

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3 DATA ANALYZING

3.1 Chart

Figure 3.1.1 Labor cost performance

Figure 3.1.2 Earning Power

Figure 3.1.3 Product process performance

3.2 Value Stream Mapping

Figure 3.2.1: Value Stream Mapping of Vinamilk

Suppose the input of Vinamilk factory is 360,000 liters of fresh milk, there are 3 shifts,machine activate and working average 4 hours and a half each shift, that means 1 shiftproduces 120,000 liters of canned milk (666,666 milk cartons with a capacity of180ml)

After the research process, we found that in the production line there will be a total of

8 main processes

To get quality milk glasses, the source of raw cow's milk needs to ensure quality.Since 2006, in order to have enough sources of cow's milk for the milk productionprocess, Vinamilk has invested in dairy farming, repeating dairy farms according tointernational standards to ensure the best quality milk production materials

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Health-qualified cows will be milked The milking process can be done by hand, or bymachine It will then be transported to the quality control place.

The first step is to receive and check the source of raw materials for milk production.After being transported, the milk will be sampled and taken for quality control Onlybatches of milk that meet the set requirements will continue to be transferred to the

processing stage for processing and production of finished milk

Figure 3.2.2: Raw fresh milk receive area

After going through quality check, measurement equipment and clarification, fresh

Figure 3.2.3: Cold tank (150m/tank)

Raw cow's milk will be transferred to volume measurement and refrigeration Beforecooling, during the filtration process, milk must be heated at a temperature of 30-40degrees Celsius to reduce the viscosity of the milk After that, the milk will be cooled

at a temperature of 2-4 degrees Celsius in stainless steel tanks that meet milk storagestandards

The next stage of Vinamilk milk production process is heating This is the process that

is carried out to support the centrifugal process, cleaning the milk

Milk will be heated to temperatures up to 40 degrees Celsius by injecting milk intoplate heat exchangers

After heating, the milk will be conducted centrifugal cleaning Milk residue as well asmicrobial carcasses will all be removed at this stage of centrifugal cleaning Cow'smilk after centrifugation will be eligible to be transferred to other processing stages

Figure 3.2.4 and 3.2.5: Centrifugal Separation of Bacteria Machine

Next, the raw milk source will be mixed with the stabilizer, the amount of stabilizerwill be divided into batches Raw milk will be put into a mixing tank with a volume ofabout 500-600 liters and heated at a temperature of 65-70 degrees Celsius, then it will

be reduced to 40-45 degrees Celsius to let sugar into the mix

After the milk has been mixed, it will be cooled to a temperature below 8 degrees C.After that, the milk will be standardized, adjusting the content of the substances toensure that after completion, the milk will meet the standards as announced on thepackage

Step 7 is milk assimilation and pasteurization Assimilation is the stage of reducing thesize of fat bridges in order to increase the dispersion of milk Limit whey to the surfaceduring storage

Milk is also pasteurized to remove microorganisms as well as spores or enzymespresent in milk to prolong the storage time of milk at normal temperatures and limitchanges in the properties of milk

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Figure 3.2.6: UHT pasteurazation system

Finally, it is packaged and transported to dealers and supermarkets

Figure 3.2.7: Filling system

Automatic LGV Robot will move finished-goods pallet to the smart storage They willautomatically move the packaging roll and packaging materials to others machines,they also recharge battery without human control

Figure 3.2.8: Automatic LGV Robot

Uptime in all the processes are the same because all the machines are activated

immediately, they have to run continuously for 1 shift

The defect rate indicates the rate of defect products here including the rate of machine

failure, for example, at the mixing stage, approximately 5% of the milk is mixed kevenly or the amount of raw material k has just made the milk too sweet because of thehigh sugar

Production lead time is the time to move from one stage to another here in the first

shift, the production lead time is 105 mins each shift

Processing time is the total cycle time of processes added together in 1 shift.

- Startup time before running takes 5 minutes

- The time it takes to clean the cleaning and maintaining machine before and afterthe shift takes an additional 60

The total downtime of the machine during this shift will be 65 minutes Then tocalculate the usefulness A (Availability) we have:

Potential uptime: 270 minutes

Actual operating time = 270 minutes – 65 minutes = 205 minutes

Availability = 205/270 *100% = 75,9%

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According to the designed capacity, the factory produces 120,000l, which is 666666bottles per shift; So it will be 2469 bottles per minute (equivalent to 1 second produces

41 bottles) So with the actual operating time in 1 shift, it will produce 504300 bottles(205 minutes x 2460 bottles)

The performance calculation is as follows:

Ideal Cycle time = 1:41= 0,024 giây

Actual number of products in 1 shift: = 504300 bottles

Performance = (Ideal Cycle Time × Total Count) / Run Time = (0.024 seconds x 504300 bottles) / (205 minutes x 60 seconds) = 98%

Finally, to calculate the quality index, if out of 504300 products of 1 case, there are

25215 products that do not meet quality control standards, then we have:

Finally, from these parameters, we calculate the OEE as follows:

This means that technically, it is inherently possible to produce 666666 bottles but inthe end, only 490799.5 bottles of the product were produced to the market in 1 shift,accounting for 73.62%

4.1.2 As is

One advantage of using automated equipment or robots is that it frees up skilledworkers to do what they do best, solve problems that arise, and constantly find newimprovements in the production process

Our solution is to hire experienced workers so as to improve Machine downtime, nowthe time for maintaining and decreasing to 25 minutes

Actual operating time = 270 minutes – 25 minutes – 5 minutes = 240 minutes

Quality = (504300 – 25215 ) *100 / 504300 = 95%

OEE = 75,9% x 98% x 95% = 70,66%

Muda of inventory: There are more finished products than demanded so it's taking up

so much work space, and cannot be sold

Muda of motion: In some situations requiring motion, the employee has to walk to get

a tool or materials, and readjusting a component after it has been installed And since the number of employees in the Vinamilk factory is quite few, it appears to have so many unnecessary and repetitive movements

Muda of waiting: Example, employees have to wait on material or equipment to arrive.Besides, in Vinamilk factory, 90% of work is responsible by robots, so the supervisor has to wait for the idle machine to start, the robot to move equipment/product from one

- Recruit skilled workers who have a sense of learning from creative experience in production innovation and a high sense of responsibility for work

- Have policies to encourage remuneration for employees in a reasonable way compatible with the ability level of each employee Doing so will motivate workers to improve theirqualifications

- Regularly open free classes to improve the skills of the workforce

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q=muda+of+vinamilk&rlz=1C5CHFA_enVN988VN988&sxsrf=AJOqlzWqm_1

TASK DESCRIPTION

Introduction of the company: Tran Le Bang

Productivity Measurement: Phung Duc Trung, Le Dang Tuan Kiet, Tran Thi

Hoang Quynh, Nguyen Thuy Nhi

Problems and Solutions: Phung Duc Trung, Le Dang Tuan Kiet, Tran Thi

Hoang Quynh, Nguyen Thuy Nhi

Chart preparation: Tran Le Bang

Slide preparation: Nguyen Thuy Nhi, Tran Le Bang

Report preparation: Le Dang Tuan Kiet, Nguyen Thuy Nhi, Phung Duc

Trung, Tran Thi Hoang Quynh

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