internship report on improving the control supply of goods at eastern medical company

INTERNSHIP REPORT ON IMPROVING THE CONTROL SUPPLY OF GOODS AT EASTERN MEDICAL COMPANY Timely patient service is our No.. 13 CHAPTER 4: IMPROVING THE CONTROL SUPPLY OF GOODS AT EASTERN ME

INTERNSHIP REPORT ON

IMPROVING THE CONTROL SUPPLY OF GOODS AT EASTERN MEDICAL COMPANY

Timely patient service is our No 1 priority

DAO THI NGAT, AMI 9B, 2019 Assoc Prof Dr NGUYEN DINH TAI

ABSTRACT

I took my internship at Eastern Medical Equipment Company Limited Where I was assigned to work as purchasing cum import export staff at Purchasing department of this Company My supervisor is purchasing manager He allowed me to involve supply goods process of company I had opportunity to work with some related departments to this process, such us sale department, finance department, accounting department and warehouse department Moreover, I am also able to work with suppliers of goods and services In this report I would like to write about my job I worked there, my knowledge applied in practice I used some tools like PETS, Porter’s five force and SWOT to analyze market and company From my point of view, I dress some weak points of supply goods I found in Eastern company then propose some solutions to improve the control goods at Eastern Company

2.3.6 Customer Services Department 9

CHAPTER 3: THE MISSION, ASSIGNED TASKS & GOALS 10

3.1 THE TASKS ASSIGNED TO MY POSITION 10

3.2 THE LINK BETWEEN THE SUBJECT MATTER AND MY MISSION 12

3.3 THE GOALS TO REACH 12

3.4 WHAT I CAN BRING TO THE COMPANY 12

3.5 THEORETICAL KNOWLEDGE ACQUIRED THAT I COULD PUT INTO PRACTICE DURING MY INTERNSHIP 13

CHAPTER 4: IMPROVING THE CONTROL SUPPLY OF GOODS AT EASTERN MEDICAL EQUIPMENT COMPANY 15

4.1 ANALYSIS OF EMVIROMENT 15

4.1.1 Macro environment 15

4.1.2 Analysis of industrial competitive environment 17

4.1.3 SWOT analysis 20

4.2 SOME WEAK POINTS OF GOODS SUPPLY AT EASTERN COMPANY 20

4.2.1 Big short date and over expiration date reagents 20

4.2.2 Payment schedule problem 21

4.2.3 Bad quality of goods 21

4.2.4 High logistics cost 22

4.2.5 Limited knowledge of purchasing, import export staff 22

4.3 SUGGESTED SOLUTIONS 22

4.3.1 Reduce short expiration date and over expiration date 22

4.3.2 Reduce logistics cost 23

4.3.3 Improve quality control of goods during transportation 23

4.3.4 Raise role of the Finance Department 23

4.3.5 Enhance knowledge and skill of purchasing, import export staff 24

CHAPTER 5: CONCLUSION 25

5.1 THE RESULT OF INTERSHIP 25

5.2 THE IMPORTANT ELEMENTS TO IMPROVE CONTROL SUPPLY OF GOODS 25

5.3 RECOMMENDATIONS TO IMPROVE THE CONTROL OF GOODS SUPPLY 26

REFERENCES 27

LIST OF TABLES 28

LIST OF FIGURES 29

1

CHAPTER 1: BACKGROUND OF EASTERN MEDICAL EQUIPMENT COMPANY

1.1 OVERVIEW

Eastern Medical Equipment Co., Ltd (Eastern Company) was established on 27/11/2000 It is a

leading brand specialized in distribution of medical equipment in Vietnam for the world famous brands such as Bio-Rad, Hitachi, Baxter, Siemens, BD Behnk Elektronik, Nihon Kohden,

Carestream

DR NGUYEN XUAN THANH is the founder and chairman of Eastern Company He graduated

Hanoi Medical University in 1995 After a period of working at hospital, he found that Vietnamese medical has to access to modern technologies, the best things in health care and support of the world medicine Eastern Company has been developing significantly, extending in all three regions: Northern, Middle and Southern Vietnam Over 18 years on, the Company has become a major national distributor of high quality equipment

At present, besides the head office operating at 3rd Lot CN, Dinh Cong New Urban Area, Dinh Cong Ward, Hoang Mai Quarter, Hanoi, Vietnam, the Company has two branches and one ware-house:

- Branch in Ho Chi Minh city, Vietnam: established in 2003 Address: : 94 An Binh str., No 5 ward, No 5 District, Vietnam - Branch in Danang city, Vietnam: established in 2005

Address: 385 Tran Cao Van, Thanh Khe District, Danang city, Vietnam - Trang An warehouse in Bac Ninh province: established in 2018

Address: Lot 83C, No 35, 11 street, Vsip Bac Ninh Industrial industrial area, Dai Dong commune, Tien Du District, Bac Ninh Province, Vietnam

Vision: become brand leader among hospital medical equipment suppliers

Mission: provide world-class medical equipment in order to improve Vietnamese healthcare Brand positioning

Timely patient service is No 1 priority

The Company commits to using the best products and services to provide its customers with optimal solution and timely patient services for the best diagnosis and treatment

Providing international standards for Vietnamese people are its commitment to supply chain including customs clearance, freight forwarding, warehousing service, transportation and delivery

Core value: leadership, customer concentric, world class medical equipment, exceptional quality

employee, international standard supply chain

1.2 COMPANY’S SECTORS OF ACTIVITIES

The Company does business in two main sectors First, supplies medical devices, consumable, spare parts, technical services to hospitals This is the root business activity of the company since it has been established Revenue from providing medical equipment business reached US $ 41 million in 2018 Besides this section, Eastern Company also provides special storage service and logistics services since the end of 2018 Before 2019, Eastern Company used several warehouses in Hanoi and branches The overload status sometimes occurs with frequent increase because the volume of goods increased significantly After observation, the BOD realized that the control and preservation of goods in many different places faced with difficulties, such as large costs, long handling the order process That affected on customer satisfaction and business results BOD decided to build its own goods distribution center It is located in a very convenient place in Vietnam: Singapore Industrial Park (VSIP), only 25 km far from Noibai Airport, 100 km from Hai Phong seaport and 20 km from Hanoi center This distribution center meets the GDP quality standards, GSP and is applying modern software to manage The system to preserve warehouses and specialized transport vehicles is modern, suitable for the goods Currently, company’s warehouse storage contains four areas based on characteristics of storage temperature Firstly, the area that is used to store goods at temperature below 30 degrees C, has a square of 1900 m2 The second is the storage area of goods at temperature from 15 to 25 degrees C Currently, in this group there are 2 warehouses, each of which has acreage of 220 m2 These warehouses are mainly used for machinery, accessories and some chemicals that do not require cold storage There are two cold storage warehouses from 2-8 degrees C and one deep cool warehouse of 20 m2 to preserve goods at degree from -20oC to -70oC Currently, Eastern has been using this service for their own storage, logistic activities and one company in Eastern Group It is Maxcare company which distributes medical to home This business section is young and very potential in Vietnam The storage service and logistics for the pharmaceutical and medical device require strict required standards of the industry Besides the big demand in the health sector, Vietnam's fisheries sector is also a real huge market for the development of this service because technology of preserving seafood in Vietnam is still at low level

3

1.3 COMPANY’S PRODUCTS

Eastern Company supplies medical devices to hospitals Its products are divided in four main categories as follow and a small group of new product: Body scale, body monitor analyzer…  First category is EASTERN laboratory: it provides a broad spectrum of immunoassay, chemistry, hematology, microbiology, molecular, urinalysis… in conjunction with automation, informatics and services, that can serve the needs of laboratories of any size

 Second category is EASTERN intensive care: it provides effective solutions to dialysis clinics and intensive care units including innovative technologies for catheterization, peritoneal dialysis, hemodialysis, continuous renal replacement therapy and liver support therapy

 Third category is EASTERN blood bank: it provides pathogen reduction technology system; fill and finish system; cell separation system; apheresis system; automated blood collection system; cell expansion system; platelet agitator

 Forth category is EASTERN imaging: it supplies ultrasound platform; computed radiography system; laser imaging system; bone densitometry system; intravascular ultrasound system

Table 1: Revenue ratio by product sectors

 In the second sector of intensive care, most products are supplied by Baxter and Cantel Medical

 In the third sector of blood bank, products are provided by Terumo BCT and JMS

 In the last sector of imaging, the main manufacturers are Hitachi; Care Stream; Steam lab

 Purchasing sources of Eastern Company come from two categories: domestic purchase and oversea purchase

 According to the company data of 2018, B.Braun is the supplier of biggest ratio proportion in the domestic purchase - about 90%, next is Terumo Vietnam with a rate of nearly 0.5% and the rest are other suppliers

 In the oversea purchase, there are several suppliers contributing high proportion of goods value, including: Baxter accounted for nearly 21%, Becton Dickinson accounted for more than 20%, Siemens accounted for 18.6% the rest are other suppliers

Figure 1: Supplier ratio by trade value

Source: Data of ERP

1.5 COMPANY’S CUSTOMERS

Eastern Company’s customers are network of hospitals, clinics, medical facilities and trading companies in the field The list of customers spreads all over the country from north to south, widely distributed across provinces

Market segmentation of national hospitals, provincial hospitals and big private clinics is the main direct customers of company Besides that, in order to improve the coverage of the company's products to district hospitals, commune medical facilities and other private hospitals, Eastern cooperates with a variety of local companies and trading companies to become their dealer in providing products to markets

Suppliers Ratio by trade value

Baxter Healthcare (Asia) Pte LtdBecton Dickinson Holdings Pte LtdCARESTREAM HEALTH SINGAPORE PTE LTDHitachi, Ltd.

Nihon Kohden Singapore Pte LtdSiemens Healthcare Pte LtdOthers

5

CHAPTER 2: EASTERN MEDICAL ORGANIZATIONAL STRUCTURE

Currently, Eastern Company has 220 employees and is organized into three function blocks, including: Funtion 1 block, Funtion 2 block and Sales block, in which Sales block has 67 employees, Fution 1 block has 68 employees and Funtion 2 block has 85 employees

Figure 2: Eastern Organization

2.1 SALES BLOCK

Head of the Sales Block is Sales Director The Sales Block is structured in two parts, including: Sales Admin and Sales Team Sales Admin is the department which prepares all tender dossiers to participate in bidding They also record tender registrations of dealers to consider whether they are allowed to use Easter’s products to offer in their bid or not, as well as provide required documents to support them to take part in the bid

Sales Team connects directly with customers to introduce products, gives the offer, persuades them buying products or taking technical information of Eastern Company product to requirement in tender book

Sales Team is vertically divided by products The National sales manager is responsible for archive target of manufacturers He/she has right to allocate regional salesmen, salesmen in branches and organize dealer networks, customer network The Regional sales managers and salesmen have responsibility to reach the target revenue of the company

2.2 FUNTION 1 BLOCK

2.2.1 Service Engineering Department

It has responsibility for surveying the location for machine installation, installing and operating machine It also instructs customers the way to use the machine smoothly and to maintain it by refer process In addition, if there are broken machines at customer’s place, engineers will repair and fix the problem

2.2.2 Marcom Department

Commercial Marketing and Media Department (MARCOM) has task to build marketing strategy, make marketing plans, write content for running both marketing online and offline It prepares all materials and operates promotion events and media events, such as: customer conventions, exhibition or sponsorship It also selects and manages marketing tools to raise reputation of the company It helps to impact customer’s awareness then contribute to push up company revenue

2.2.3 Regulatory Affairs Department

Regulatory Affairs Department acts as a link between the company and regulatory authorities, ensuring that products are manufactured and distributed in compliance with appropriate legislation

2.2.4 APP Department

App Department is the department in charge of making sure that customers can understand application of products and use it by right method Thus, it has to perform some tasks as below:  Train and instruct customers to use testing machines, systems of critical machines supplied by the company;

 Support customers during the process of using products provided by the company such as using testing machines and tests that are applied on the machine;

 Support customers to deploy and install new tests;

 Perform the settlement of customer complaints about product quality related to test chemicals, calibrator, quality control …

 Solve problems related to test results, quality control of testing at customers;  Exploit, manage systematic customer information, share with Marketing and Sales Department to support the company’s business goals

 Translate, compile documents and prepare presentations in some specific cases with customers

2.3.2 Human Resources and Admin Department

This department performs two major tasks The first one is to ensure the quantity and quality of human resources for the company by many methods to attract, recruit employees, stabilizing quantity of employees and increasing labor productivity The human resource team includes one recruitment specialist, one training specialist and one legal specialist in charge of legal issues with employees under the law The second major responsibility relates to administrative activities This admin team is responsible for controlling all income and outcome of company’s documents, controlling internal company’s regulation are implemented by employee and ensuing the environment Moreover, this team is also responsible for providing lunch for company employees This is really important task because it affects directly health of all employees

2.3.3 Accounting Department

Accounting Department is responsible for recording, accounting all economic activities s arising in the Company in a timely and adequately manner Currently, the Accounting Department is being organized into groups based on job characteristics, including:

 Sales accounting team: it performs accounting department's procedures related to sales activities such as: delivery bills, issue tax invoices, bank guarantee

 Debt accounting team: it monitors accounts receivable, payable to suppliers and customers  Payment accounting team: it checks and controls documents of payment documents and makes payments

 Tax accounting team: it collects tax documents, executes accounting and manages tax book in accordance with the law

2.3.4 Purchasing Department

The Purchasing Department has the function of advising and assisting the Director Board in purchasing, importing and exporting goods as well as controlling inventories, ensuring stock of goods enough to supply in right time, right place for the business activities of the company

Figure 3: Purchasing Department structure

There are six employees in the Purchasing Department They are structured into oversea purchasing team, domestic purchasing and import - export team The purchasing team begins its jobs when it gets request to purchase from the sales team, finds out suppliers, evaluates them to choose the most suitable supplier Besides, it negotiates with them to sign contract, follows performing contracts and handles claim with suppliers

The Purchasing group contains two teams: oversea purchasing team who contact with foreign suppliers to purchase and domestic purchasing team who buy from supplies in Vietnam Eastern targets to do business directly with oversea manufacturers However, the Company still remains domestic purchasing to responds max

The Import export team is in charge of handling shipment since goods shipped, do clear customs and follow shipment until to get in They also have responsible to compare services of transportation companies, make sure to find out the most suitable supplier This team also checks trace, controls goods on road to prevented goods quality, as well as goods are released at right time, right place

2.3.5 Logistics Department

The first task of this department is warehouse management It has to make sure storing and preventing goods in accordance with manufacturer’s instruction Furthermore, it performs import and export work according to company’s principles, avoiding losses and damages

The second one of this department is handling delivery goods It has responsibility to coordinate appropriate transport means, combine orders according to delivery lines to ensure saving cost and reducing time of delivery It has to closely monitor the conditions of goods preservation during

9 transportation (temperature, vibration, light .) and delivery of right quantity and categories to customers, as well as to collect fully signed delivery proof

2.3.6 Customer Services Department

This department consists of 2 groups The first group is responsible for acquiring information related to orders of customers The customer services staff receive orders from customers and proceed it with related departments such as Purchasing department, Accounting department, warehouse department, delivery department to ensure customers' orders are delivered as customers require The second group is responsible for receiving other requests from customers such as: requesting technical information, product information, user guide then forward them to relevant departments to respond customers

CHAPTER 3: THE MISSION, ASSIGNED TASKS & GOALS

3.1 THE TASKS ASSIGNED TO MY POSITION

In my internship time at Eastern Company, I was assigned to be a purchasing cum import-export staff The tasks I was assigned to perform include the following

Oversea purchasing task: I was assigned to take care of some traditional suppliers,

including: Siemen Healthcare Pte Ltd; Randox Laboratoies Company I performed the task following to the supply process as below:

Table 2: Supply process at Eastern Company

Step 1: Sales executive makes request purchase order (RPO)

basing on customer’s demand and sales plan then submit to sales manager

Step 2: National sales manager considers and confirms RPO then

sends to Purchase Department

Step 3: Purchasing specialist gets confirmed RPO and checks

storage space, inventory then sends PO to the suppliers after purchasing managers approves it

Step 4: After suppliers send sales confirmation (SO), purchasing

specialist makes contract

Step 5: Purchasing specialist requests to payment and follows it Step 6: Purchasing specialist requests import – export team to

arrange shipping

Step 7: Import-Export team do customs clearances and arrange to

transport goods to warehouse

Step 8: Import-Export team give documents of shipments after

customs clearance to post goods receive information on Enterprise resource management system (ERP)

Step 9: Logistic Department receives goods at warehouse, tests

goods abide by quality control process (QC) and confirms to

11

Step 10: If goods are damaged or they did not meet information

on document, the purchase specialist will collect report and send to the supplier to do claim process with them

Besides that, I was also assigned to support to find new suppliers for new products of healthcare device used in home like body weighing scale, massage device With new suppliers, we have to pass through evaluating suppliers process before purchasing The evaluate new supplier process is described in the below Figure

Table 3: Evaluate supplier process at Eastern Company

Step 1: Search for suppliers whose products match

company requirements, classify them based on mark, rate of each requirements

Step 2: Submit report to Board of Director (BOD) to

select suitable suppliers

Step 3: Negotiate with suppliers regarding detail

terms to sign the contract

After the contract signed, the jobs are performed similar to step five to step ten of the above supply process

Import – Export tasks: main tasks that I had to work are listed as follows:

 I had responsibility to find, evaluate, select suitable forwarder to handle company’s shipments Control debit with forwarder and make payment procedure to make sure debit is no t overdue

 Make booking transportation, inspect shipping documents: invoice, packing list, bill of lading, CO…

 Buying insurance for import shipments and making claims with them for loss of shipments

 Preparing documents and doing customs clearance

 Providing fully purchasing, import-export documents to Accounting Department

3.2 THE LINK BETWEEN THE SUBJECT MATTER AND MY MISSION

In the internship at Easten Company, I acted as both a purchasing employee and an import export employee I had an opportunity to practice my knowledge as well as have a chance to observe the company's goods supply process and the departments involved in this supply system to understand the operation of the system and the functions of departments contributing value to this supply system Thus, in my opinion, the mission is close to my subject of “Improving the control of supply goods at Eastern Medical Equipment”

3.3 THE GOALS TO REACH

The goals that I had to reach during the internship program are:

 Place orders and handle them to make sure they arrive right time, right place  Follow and control debits with suppliers so that they are not overdue

 Find out suitable suppliers of goods and services who meet requirements of BOD  Do customs clearance quickly, minimize storage charge at ports

 Make sure to identify HS code and use required documents of customs procedure abide by law that make save time, taxes and duties

3.4 WHAT I CAN BRING TO THE COMPANY

In the internship period at Eastern Company, I always tried to complete all the assigned tasks and brought to Eastern Company several results as below:

 Carried out executive jobs of a purchasing employee, as well as an import export employee

 Figured out some points that Eastern Company has not done well and found out reasons which lead to that points

 Proposed some solutions to improve the supply of goods at Eastern Company