VIETNAM NATIONAL UNIVERSITY — HO CHI MINH CITY INTERNATIONAL UNIVERSITY - SCHOOL OF BUSINESS GROUP PROJECT SUPPLY CHAIN SYSTEM: THE CASE STUDY OF MASAN CONSUMER HOLDING Course: Logistic
Trang 1VIETNAM NATIONAL UNIVERSITY — HO CHI MINH CITY INTERNATIONAL UNIVERSITY - SCHOOL OF BUSINESS
GROUP PROJECT SUPPLY CHAIN SYSTEM: THE CASE STUDY OF MASAN
CONSUMER HOLDING Course: Logistics and Supply Chain Management (BA022IU)
1 Dao Van An BABAWE19137
2 Dang Thi Quynh Anh BABAWE20131
3 Nguyễn Diễm Thùy Dương BABAIU19165
4 Tran Thi Thanh Huong BABAWE19177
5 Vũ Hoàng Thuy Ngọc BABAWEI9076
Ho Chi Minh City, Vietnam
12 2022
Trang 2Table of Contents
T.ITNTRODUCTION: MASAN COMPANYY 0.0 n1 1g 01111211 tt TH HH key 2
TI MASANˆS SUPPLY CHATIN MANAGEMENT S21 21212 n1 1211 1H11 01 H1 1k re 3 2.1 Main product of SupplÌy cham Q0 0 20221221121 1121221 20111211011 221112 1111212111001 1 1011 Tc1 g1 H11 ng va 3
PC CO 0i )))0 20000 lì: 9.0 0n ằẮ 11 2.4 t2: Ì 0i (090 (/)00 0ï) (ìï)0ì-)0)10)0) baiadiaẳididđidiđdidaiiaẢÝẢÝ 11
TH MASAN SUPPLY CHAIN ANALYSTIS S1 1211221 1H HH 211 H11 111 key 15 3.1 Sustammabalitty 0.0.0.0 ccccesececeeecseseceseeseeaecesessecaecueceaecsessescsseseeaeecssseessecieessesssseesssneseeetesieeeseenees 15 3.2 DigfÉization of the supply chaIm 2 220222121 1121121 15512211212 251211 1111211111111 211 20111 111k k re 17 0.1/06 c1 18 N"P) oi ‹ca n6 C dd 18 4.2 FlexIble mvenf†ory manà€Im€TiF 22c 211221221 121121 11211221212 01011 1011011011 011012 11 11 011 11112111011 kg xế 19 4.3 Effective warehousing management cc 1 n2 121 1212211211221 511 2011011 211111211 21110111111 01101 1 1110 E11 sra 19 4.4 Wide distribution sVSf€I - 0 20121 2112211221212 1011211212 121211111211 510011011 1115 H1 11011 H111 11111 11kg re 20 4.5 Closed ecosystem ( Masan consumer + CTOWNX) c2 2n 1n 211111 H1 211118111 HH rệt 20
V DISADVANTAGES ooo e 21
1k nh e 25 5.3 Disadvantage in Covid-19 perIod - - - c2: 1211211211221 211 1011221112 11111 1111011211101 1 11 11 11 1111110111 cay 27
VỊ, RECOMMENDATIONS FOR MASANˆS SUPPLY CHAIN Q0 222 re sa 28 1 28 h0 11 30
VIIL CONTRIBUTION FORM S222 22H12 1211111 1111110111 1111111111 1111 cư 32
Trang 3I INTRODUCTION: MASAN COMPANY
Masan Joint Stock Company is currently one of the largest enterprises in the private economic market in Vietnam Masan was established by Nguyen Dang Quang (Chairman
of the Board of Masan company) and he started to operate a small instant noodle factory with Masan brand in Russia in 1990 Masan Group, earlier known as Masan Maritime Jomt Stock Company, was founded on 11/2004 In 7/2015, the business changed its name legally to Masan Group Joint Stock Company Despite being initially founded in 2004, the company has already operated before with shareholders and subsidiaries in 1996 Types of the main fields of Masan Company:
¢ Wincommerce: With the supermarket chains WinMart and WinMart-+, WinCommerce runs the largest national modern retail food platform in Vietnam
® Masan Consumer Holdings: Masan Consumer and Masan Brewery
e Masan MEATLife: MEATDeli
¢ Masan High-Tech Materials: Corporate in the field of natural resources and minerals
e Shareholder of Techcombank
Masan Group established Masan Consumer Holdings in 2013 The company was established in 2000 and is headquartered in Ho Chi Minh City, Vietnam Masan Consumer Jomt Stock Company operates as a subsidiary of Masan Consumer Holdings Company Masan Consumer is focusing on food and beverage products, such as condiments (fish sauce, soy sauce, and chili sauce), convenient foodstuff (noodles, quick breakfasts, and cereals), and drinking items (instant coffee, mineral water) Masan’s well-known brands, including Chinsu, Omachi, Vinacafe, and so on Currently, the company is exporting its products to other countries such as the United States, Canada, France, Rusia, Germany, Japan, and so on The Masan Consumer's business strategy and products continually put the customer at the forefront of the service journey, offering convenience and excellent experiences and satisfying the increasingly diverse requirements of
Trang 4II MASAN’ S SUPPLY CHAIN MANAGEMENT
2.1 Main product of Supply chain
Masan Consumer Holdings is one of Vietnam's major local FMCG firms Soy sauce, fish sauce, dipping sauce, chili sauce, instant noodles, instant oatmeal, instant coffee, instant cereals, bottled drinks, and beer are among the items manufactured and distributed by the corporation To build a leadership position in the Vietnamese branded food and beverage product industry, the firm has expanded its product line, sales force, and domestic distribution methods
Masan Consumer Holdings' key brands include CHIN-SU, Nam Neu, Tam Thai Tu, Omachi, Kokomi, Lovemi, Komi, Boo Boo, Ponnie, Vinacafé, Wake-up 247, Compact, Vinh Hao, Quang Hanh , Vivant, Faith, Red Ruby and White Lion With the completion of the public offer to buy Net Detergent Jomt Stock Company, Masan Consumer has officially entered the household and personal care products category
Level 1 Level 2: Distribution Level 1 Level 2 Level 3
Spice industry group
Masan continues to be the market leader and plays a significant role in setting the general trend Sauces, seasonings, and salad dressings are the mainstay of Masan Consumer, which is also a large and profitable category for Masan In 2020, net sales of the spice industry reached VND 8,147 billion (+12.4% YoY) The main products of this industry group can be mentioned as: Nam Neu fish sauce, Tam Thai Tu, Chin-su chili
Trang 5sauce, etc
Convenience food industry
The convenience food industry trades in instant products, contributing VND 6,882 billion in revenue in 2020 In which Omachi noodles dominate the high-end segment with 45% market share in 2020 and at the same time become a best-selling brand in supermarket channel Meanwhile, in the mid-end segment, Kokomi noodles also outperformed in 2020 (+ 42.8% YoY)
Beverage industry
This sector includes sub-sectors such as bottled beverages (energy drinks, bottled water), coffee Among beverage products, the most prominent is Wake-up 247 coffee- flavored energy drink, which holds 10% of the national market share after being introduced to the market in 2015
The processed meats and Personal care
Masan has also built popular products such as Cowboy Pig, Ponnie, distributed nationwide Starting from 2018, Masan Consumer's subsidiary officially entered into a strategic partnership with Jinju Ham Company - the industry leader in the field of processed meat production in Korea Home & Personal Care - HPC that Masan just entered the market through the acquisition of NET Detergent Joint Stock Company in early
2020 In 2020, this category contributes 1,265 billion in revenue of Masan Consumer 2.2 Supply chain network
Overall, all of their raw materials are procured and bargained with by their buying department at their headquarters in Ho Chi Minh City After the purchasing team has negotiated a deal, its subsidiaries sign contracts with their suppliers In order to satisfy Masan Consumer's needs, their purchasing team must establish and maintain the ideal number of dependable suppliers To ensure consistency and high quality, the division currently purchases materials from more than 160 suppliers under long-term contracts Suppliers who have a long history of cooperation with them and have proven their dependability are referred to as "approved suppliers" and will continue to take part in long-
Trang 6term contracts By employing this tactic, they lower their risk of working with suppliers who deliver late, provide inadequate raw materials, don't meet specifications, or increase prices unexpectedly
ward, Binh Duong province, Vietnam
No 16-18-20 DT 743 street, Song Than 2
3 Uni-President Vietnam Co., Ltd Industrial Park, Di An Instant noodles
Ward, Binh Duong province, Vietnam
Lot III-10, Street No 1, Industrial Group III, Tan Binh Industrial
4 VITEFOOD Co., Ltd Park, Tay Thanh Ward, Soy souce
Tan Phu District, Ho Chi Minh City, Vietnam
Bien Hoa | Industrial Vinacafe Bien Hoa Joint-Stock Park, An Binh Ward, Coffee, Nutrition
Nai Province, Vietnam The six production plants they now run are in Binh Duong, Tan Binh, Phu Quoc,
Trang 7Hai Duong, Dong Nai, and Binh Thuan These facilities provide businesses the ability to produce goods with consistent flavor and texture, enhancing the caliber of their brands
In order to accommodate the increase in sales volume they have seen since 2007, they are expanding their Binh Duong facility, and they anticipate that it will eventually replace other production facilities as their main one The fish sauce manufacturing line automation portion of this expansion's initial phase was finished in 2010 By early 2014, the last stage of the extension should be finished, housing the automatic manufacturing lines for chili sauce and soy sauce
Vinacafe Bien Hoa's brand-new facility was only been placed into use The capacity
of Vinacafe to produce instant coffee will grow by 3,200MT annually thanks to its facility
in Long Thanh Industrial Park
To rigorously monitor the quality and production of the products, Masan Consumer does not consider outsourcing or contract a third party to produce Masan will regularly assess its suppliers to choose the best ones and, if necessary, take action to enhance the chain's suppliers Masan owns at least 50% of the shares of each of the aforementioned vendors, however this has no bearing on Masan's appraisal process They have a clever rating system that takes into account factors like quick delivery, teamwork, customer comments on product quality, etc Therefore, the aforementioned suppliers must adhere to domestic and international standards like ISO 9001: 2008, ISO 14000, Food safety, etc in terms of product quality, food hygiene and safety, and not causing environmental harm 2.2.2 Manufacturers
After raw materials, the stage of processing and producing any product, especially consumer goods, is worth paying attention to: the product production process The corporation constantly seeks to invest in establishing a system of factories to make items
of worldwide standards in order to quickly fulfill the growing expectations of today's consumers Masan's buildings, production line system, machinery, and equipment are updated and continually upgraded to meet the highest production demands, reduce the risk
of faulty goods, and achieve other production-related objectives The workers are given the chance to learn, advance their skills, and work in a welcoming environment that
Trang 8encourages creativity, personal growth, and the creation of several new high-quality goods for Masan
The company now has 13 facilities that produce consumer products spread over 10 provinces and cities in Vietnam, including Binh Duong, Ho Chi Minh City, Phu Quoc, Hai Duong, Dong Nai, Hau Giang, Binh Thuan, Phu Yen, Quang Ninh, and Nghe An, etc are the places they established All Masan factories have met the standards of production HACCP, ISO 9001 (quality management system), [SO 22000 (Food safety management system) and OHSAS 18001 (certificate provided from Occupational Health and Safety Assessment Series)
Notably, Masan designed and built the world's first fully automatic fish sauce production line, combined with modern laser engraving techniques, engraved production date and production line on the shoulder and lid The fish sauce products produced by Masan completely ensure the quality and safety according to international standards Masan Consumer believes that the quality of products and services plays a very important role in brand development and consumer attraction This belief motivates Masan Consumer to constantly research, invest and apply modern and advanced technologies and equipment to meet production needs, maintain competitive advantages and provide quality products 2021 is a challenging year due to the heavy impact of the Covid-19 pandemic However, with the efforts of the entire Board of Directors and employees, Masan has turned a challenging period into an opportunity Production lines invested from 2020 have been completed and put into operation as planned in the first quarter of 2021, including noodle production lines in Nghe An and Hau Giang with a total capacity of 9 million packages/month
By the end of 2021, new construction, expansion and capacity increase of existing factories are to respond promptly to the increase in output supplied to the market Along with taking advantage of existing infrastructure, they use the best technical solutions and modern technology in the world to produce high quality products at the most suitable cost for consumers New factories and investment lines are being implemented, including: 2 B'fast milk lines with a capacity of 31 million liters/year/line that will be handed over for
Trang 9operation in early July 2022 Noodle production lines in Nghe An and Hau Giang with a total capacity of 29.2 million products/month will be put into operation in September 2022 The seasoning package factory for noodles in Binh Duong with a capacity of 4 billion packages/year is expected to be put mto operation in February 2022 In addition, the renovation and upgrading of the chili sauce line in Binh Duong also helps increase capacity by 20%; upgraded capacity of packaged coffee increased by 28%
2.2.3 Distributors
Masan has built a professional distribution system covering 64 provinces and cities across the country and exported to a number of countries with similar Asian tastes Considered to be the largest in Vietnam, Masan Consumer's distribution and sales logistics network can deliver products to anywhere in Vietnam within one day Up to now, this distribution network includes 3 large distribution centers throughout Vietnam (North,
Trang 10Central, South), a strong sales force of nearly 200 exclusive distributors and more than 1,628 sales staff, helping Masan bring products to more than 180,000 points of sale nationwide In addition to the benefits to be enjoyed, the distributor must be responsible for the investment in warehouses, facilities, finance, personnel, etc
A practical example in Thai Nguyen, with 3 distributors sharing the market as
follows:
Distributor | Distributor 2 Distributor 3
Thai Nguyen city , Dong Hy, Vo Nhat, Song Cong, Pho
No
Main retailer 1 Address
14B, 13A Trung My Tay Street, Hamlet 5, Trung
My ‘Tay Ward, District 12, Ho Chi Minh City, Trading Trading Co., Ltd
Vietnam
Tan Xuan Commune, Hoc Mon District, Ho Chi
Minh City, Vietnam
Additionally, Masan Group chose to combine VinMart, VinMart+, and VinEco in
2 Van Phuc Vinh An Co., Ltd
order to more readily contact people The management rights have been given to Masan, according to Vingroup, who claimed that their ownership is no longer in the majority
10
Trang 11VinCommerce, VinEco, and Masan Consumer Products Joint Stock Company will unite to establish a consumer-retail conglomerate, according to the terms of the deal Vingroup is a stakeholder and will turn the business over to Masan Group current sales techniques:
- VinCommerce, which has more than 132 VinMart stores and 2,900 VinMart+ micro shops in 50 provinces, is the country's largest contemporary retail platform This draws customers’ attention and gets them excited about the items that are displayed on the shelves
of both big-box stores and independent retailers
2.3 Relationships within the chain
Elements within the chain have a closed relationship and continually interact to support a flexible supply management
First, at their headquarters in Ho Chi Minh City, the buying department negotiates and purchases all of their raw materials Then, the purchasing team's subsidiaries sign contracts with their suppliers once a deal has been reached It should be noted that to ensure consistency and high quality, the division currently makes long-term contracts with more than 160 suppliers
After receiving raw materials, the firm will continue with the step of manufacturing, especially consumer goods in six production plants at Binh Duong, Tan Binh, Phu Quoc, Hai Duong, Dong Nai and Binh Thuan Consistent taste and texture are the most important goal for production
Next, finished products are transfered to distribution systems This distribution network consists of three large distribution centers located throughout Vietnam (North, Central, and South), as well as a strong sales force of nearly 200 exclusive distributors and over 1,628 sales personnel who assist Masan in bringing products to over 180,000 points
Trang 122.4 Social and Environmental responsibility
Healthcare: Masan pay special attention to the health of our community, especially
to financially disadvantaged patients who cannot afford their treatment fees To date, Masan Group contributed more than VND270 billion to support local residents and frontline workers in the fight against the COVID-19 pandemic The company's forms of contribution were extremely diverse, from the in-kind contributions of medical supplies and equipment such as test kits, PPE, ventilators, or essential necessities to an in-cash donation of VND60 billion to the COVID-19 Vaccine Fund launched by the government Since the first outbreak, essential products produced by Masan Group such as KOKOMI and OMACHI noodles, MEATDeli chilled meat, Ponnie sausage, Vinh Hao mineral water, etc were quickly delivered to control posts, border posts, hospitals, and isolation areas to support frontline workers in pandemic prevention and responses
Education: Masan Consumer presented 4 water purifiers to 4 primary and middle schools in Hau Giang (Phu Huu 3 and Phu Huu 4, Chau Thanh District) and Long An provinces (Thanh Hoa, Ben Luc District) in an amount of VND 500 million, helping teachers and students access clean water Masan's subsidiary located in Ha Son commune, MNS FARM Nghe An, established a scholarship fund for 110 pupils worth VND120 million Education plays an important role in poverty reduction and Masan has been a consistent supporter of scholarships and educational activities
Community development: Masan believes that infrastructure development will empower the less fortunate in the long term To that end, over many years, Masan has
12
Trang 13invested heavily in social infrastructure, including health facilities, schools, vocational training, and mentoring programs
In 2021, Masan MEATLife Farm Nghe An (Ha Son commune, Quy Hop district) spent over VND 1.4 billion on social security activities This includes support for the construction of medical stations, houses of gratitude, and scholarships to students besides many other community development activities
In March 2021, the People's Committee of Kien Tuong town (Long An province) cooperated with Vietnam Rural Magazine to hold the inauguration ceremony of 6 rural traffic bridges in the town 6 bridge works including Kenh 61 bridge, Kenh Nhanh Re Cai Cat bridge, Kenh Cai Cat bridge, Kenh Rach Cai Say bridge, Kenh Op bridge, and Kenh Ngon Cay bridge with a total construction cost of VND5 billion funded by Masan Group sponsorship
Corporate governance: Masan Group is committed to a best-in-class governance system, policies and procedures, and corporate transparency via the governance
committees prescribed by Vietnam law, such as our Board of Directors and Audit Committee besides foreign investor oversight
2.4.2 Environmental responsibility
At Masan, they care about their environmental footprint They aim to ensure green practices across all of their operations which they believe can be achieved without sacrificing business performance
Thorough waste treatment and sustainable resource usage are critical components of the decision-making process across all of Masan's businesses, from the manufacturing of consumer products to processing minerals Whenever a new project is under development, they take into account any potential adverse impact on the environment to develop mitigation and compliance plans before groundbreaking
Masan's Legal and Compliance department, together with the Safety, Health, and Environment department is responsible for nationwide compliance and monitoring of environmental laws and regulations In addition, the technical department of each of Masan's operating subsidiaries carnes out sample testing of waste discharge on a periodic
13
Trang 14basis to monitor compliance with relevant environmental laws and regulations
Masan believes they are the national leaders within their industries with regard to environmental practices
Raising awareness: Masan's commitment to preserving the environment starts locally and emphasizes going green at the workplace first They have planted trees around factories and neighboring areas to keep the area green and provide fresh air
In the retail sector, WinCommerce did its part in environmental protection by introducing green solutions at WinMart supermarkets and WinMart+ mini-marts WinMart/WinMart+ replaced 100% plastic bags with biodegradable alternatives while reducing or replacing single-use plastic materials with environmentally friendly options, providing promotional offers to customers who use their own multiple-use bags in order to encourage adoption of green consumer behaviors in shopping at WinCommerce’s retail stores To minimize its environmental impact, WinEco has replaced nylon bags and rubber bands for packaging with biodegradable materials following the standards of the Ministry
of Natural Resources and Environment In addition, WinEco also uses kraft paper and biodegradable nylon bags to harvest and package products instead of wrap and
conventional nylon bags
Water:
At Masan, one of the key priorities in environmental protection is the preservation
of water sources They have invested significantly in advanced wastewater treatment systems and apply the most stringent standards to monitor the effects of plant operations
on the surrounding environment
At MasanConsumerHoldings, they have invested in Dutch-designed wastewater treatment plants at production facilities in Binh Duong, Hai Duong, and Nghe An Masan's high-tech pig farm in Nghe An is also equipped with a modern wastewater treatment system to ensure the sustainable operation of the farm in compliance with national environmental standards At MEAT Ha Nam and MEATDeli Sai Gon processing complexes, domestic and industrial wastewater are processed at their respective
wastewater treatment plant into “Class A” treated wastewater, the most demanding
14
Trang 15wastewater standard in Vietnam, before being discharged into the respective industrial park's centralized wastewater collection facilities
Clean and renewable energy:
Vietnam is a coastal country and Masan is acutely aware of the importance of minimizing the carbon footprint to combat climate change As such, energy saving or resource optimization should be a priority for any business of scale that wishes to grow sustainably
Masan provides training to their workers on the benefits of energy-saving habits by regular cleaning of machines and tools for best-quality products
Masan adopted biogas production from rice husks and sawdust waste to generate energy for the factories Biogas is not only an environmentally friendly and cost-effective energy source but also results in job creation and income for local people
Il MASAN SUPPLY CHAIN ANALYSIS
3.1 Sustainability
Supply chain sustainability refers to companies’ efforts to consider the impact on the environment and people in their product journey through the supply chain, from raw material sourcing to manufacturing, storage, delivery, and any transportation links in between The goal is to minimize harm to the environment from factors such as energy use, water consumption, and waste production while having a positive impact on people and communities in and around their operations
While supply chain management typically focuses on speed, cost, and operational reliability, sustainable supply chain management complements the goals of maintaining environmental and social values This means addressing global issues such as climate change, water security, deforestation, human nghts, fair labor practices, and corruption
At Masan, Sustainability means the reconciliation of the efficiency of the business with the environment and people around it Choosing the development path according to the philosophy of "Doing well by doing good", Masan is proud to be the leading enterprise based on a sustainable business viewpoint, creating wonders with its imprint
According to Masan consumer's original mission, success does not stop at talking
15
Trang 16numbers but the greatest happiness is seeing and feeling positive changes in daily life It is the desire to help Vietnamese consumers be able to pay less for their basic daily needs, allowing them to improve their lives and invest in the future
Environmental Sustainability
At Masan, the assessment of environmental impacts is always carried out seriously
to ensure that production facilities meet environmental standards but still ensure product quality Therefore, 20% waste disposal and sustainable resource use measures are required
in all plants The first step when planning any new project is to pre-calculate the effects on the surrounding environment, thereby planning appropriate environmental protection options before implementing the project All factories of the company regularly carry out environmental protection assessment and supervision, accreditation of machinery and equipment, fire prevention and fighting, and periodically report to state agencies
In 2021, Masan consumer focuses on developing technical solutions to continuously improve wastewater treatment systems at the source, wastewater treatment to ensure that the targets always meet the operating capacity of the plants Wastewater treatment system and comply with the environmental law of Vietnam In addition, at the main factories, 20%
of the total campus area is devoted to greenery to ensure a green and environmentally friendly workplace Moreover, Masan's factories are constantly updating and renewing the Health and Safety management system to the latest version Therefore, we believe that our company is a national leader in meeting environmental standards in the industry
Human resources sustainability
Masan's achievements are all made up of the company's most valuable asset - human resources Therefore, Masan consumer creates a fair and equal working environment to maintain a company culture that promotes success The goal of enhancing the material and spiritual life of the Vietnamese people, in addition to our mission to serve consumers, is also directed to our internal employees The company creates an attractive labor environment, creates employment opportunities, and contributes to the overall development of social protection in the localities in particular and the whole country in general
16