Luận văn thạc sĩ Quản trị kinh doanh: Drivers to implementing lean supply chain management successfully: Study on FMCG companies in Vietnam

VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY NGUYEN TRUONG THUY TRANG DRIVERS TO IMPLEMENTING LEAN SUPPLY CHAIN MANAGEMENT SUCCESSFULLY: STUD

INTRODUCTION

Background of study

The concept of lean supply chains has gained significant attention in the Fast-Moving Consumer Goods (FMCG) industry worldwide Originating from the Toyota Production System, lean thinking aims to minimize waste and increase efficiency, making it highly relevant to the FMCG sector, characterized by high-volume, low-margin products, and a need for rapid turnover

In the context of Vietnam, an emerging economy with a burgeoning FMCG sector, the implementation of lean supply chains could potentially unlock significant value However, despite its apparent benefits, the adoption of lean principles in Vietnam’s FMCG supply chains appears to be limited This raises the question of what factors drive, and what barriers hinder, the implementation of lean supply chains in this context The driving factors could be manifold For instance, increasing competition in the FMCG sector might compel companies to seek ways to reduce costs and improve efficiency, thereby driving lean implementation Similarly, the growing awareness and understanding of lean principles among Vietnamese managers could also play a role Conversely, several barriers could impede lean implementation These might include a lack of understanding or misconceptions about lean thinking, resistance to change among employees, or structural issues within the company or the wider supply chain that makes it difficult to implement lean principles

This study aims to explore these drivers in detail, to provide actionable insights that could help FMCG companies in Vietnam more effectively implement lean supply chains By doing so, it hopes to contribute to the broader discourse on lean supply chain implementation in emerging economies

The Fast-Moving Consumer Goods (FMCG) sector in Vietnam is a critical driver of economic growth However, optimizing supply chains remains a challenge While existing research emphasizes the significance of lean supply chains, specific driving factors that facilitate successful implementation and the barriers hindering progress are not thoroughly explored Understanding these factors and barriers is essential for informed decision-making and strategic planning within FMCG companies This study aims to explore drivers and recommend some strategy to enhance supply chain efficiency and resilience in the Vietnamese FMCG industry.

Thesis objectives

The specific objectives of this thesis are as follows:

(1) To explore the drivers for the implementation of LSCM within FMCG companies

(2) To explore the advantages that could support implementing LSCM in the FMCG supply chain of two big companies in Vietnam

(3) To recommend approaches to apply lean supply chain for typical company in Vietnam to enhance overall business outcomes and reduce waste during supply chain operations.

Thesis scope

In the process of implementing the project, there are still many limitations, so the project is carried out within the following scope:

- Scope of content: The thesis will focus on analyzing factors affecting to implementation Lean Supply Chain in FMCG Industry in Vietnam

- Scope of place: FMCG companies in Vietnam, case study in 2 typical big companies of Vietnam

- Scope of time: during the period from January 2024 to May 2024.

Scientific and practical significance of the thesis

Theoretical Perspective: This qualitative research synthesizes the key factors driving the successful implementation of Lean Supply Chain Management in manufacturing companies globally, including Vietnam The study adopts a resource-based view and a

3 relational view approach It is conducted in the context of the fast-moving consumer goods industry in Vietnam, which is an emerging and rapidly developing FMCG market The novelty of this research lies in the fact that previous studies have paid limited attention to the FMCG industry, and conducting this study in the Vietnamese context adds to the limited research in this area

Practical Implications: The comparative analysis of the drivers of LSCM implementation identified through the literature review and case studies provides enterprises with a comprehensive understanding and a roadmap for effectively practicing supply chain management This study aims to explore the key factors driving the successful implementation of LSCM in Vietnamese FMCG companies A multi- method approach was employed, including a literature review, in-depth expert interviews, and case studies of leading FMCG companies The study provides valuable insights by comparing the factors identified from the literature with the perspectives of industry experts and experiences from the case studies The managerial implications are highly significant Vietnamese FMCG companies need to focus on developing these key factors to fully harness the benefits of LSCM and enhance their supply chain performance and overall competitiveness This research provides a comprehensive framework that managers can use to guide their LSCM implementation efforts and ensure long-term success.

Methods of implementation

This study employed a multi-method research approach to explore the key factors driving the successful implementation of LSCM in the FMCG industry in Vietnam The methodological approach consisted of a comprehensive literature review, in-depth expert interviews, and case studies of leading FMCG companies

The literature review synthesized the theoretical foundations from academic books, textbooks, and scientific articles to identify the potential drivers for successful LSCM implementation This provided the initial framework for the study

The expert interviews were conducted using a structured questionnaire to elicit the experts' perspectives on the sub-drivers that could facilitate the successful implementation of LSCM in the Vietnamese FMCG context The in-depth interviews

4 further probed the "what, why, and how" aspects to gain a deeper understanding of the LSCM drivers specific to the FMCG industry in Vietnam

Additionally, the research incorporated case studies of two typical FMCG companies in Vietnam to explore the practical manifestation of the identified LSCM drivers and compare them to the insights garnered from the literature

Finally, the study utilized Interpretive Structural Modeling (ISM) to visualize the interrelationships and hierarchical structure of the expert-derived LSCM drivers This allowed for the development of strategic recommendations for FMCG companies in Vietnam on the effective application of LSCM principles and practices

The multi-pronged methodological approach employed in this study provides a robust and comprehensive framework for understanding the critical success factors for LSCM implementation in the Vietnamese FMCG sector, which has been an underexplored area in the existing literature.

Thesis layout

Chapter 1 provides a general introduction to the study, including the rationale for the research topic, the objectives of the study, the scope of the research, the methodological approach, the significance of the research, and the structure of the dissertation

Chapter 2 presents a literature review, defining key concepts, and summarizing previous research on the drivers for implementing Lean It also identifies gaps and limitations in existing studies to uncover research opportunities for this study Based on these research opportunities, the chapter explores the drivers that can contribute to the successful implementation of Lean Supply Chain Management

Chapter 3 outlines the research methodology used to achieve the stated objectives Building on the drivers and sub-drivers identified in the previous chapter, in-depth interviews with experts are conducted to determine the critical drivers for successful LSCM implementation in the FMCG industry context in Vietnam

Chapter 4 presents the key drivers that contribute to the successful implementation of LSCM in the Vietnamese FMCG industry It also compares these findings with two typical case studies to provide a comprehensive evaluation Additionally, this chapter offers recommendations related to the identified drivers to help FMCG companies in Vietnam further enhance their LSCM practices

Chapter 5 summarizes the research process and findings of the study It proposes managerial implications to provide guidance for managers to improve the effectiveness of FMCG operations in Vietnam Furthermore, this chapter acknowledges the limitations of the study and suggests future research directions

LITERATURE REVIEW

Concept definition

The concept of supply chain refers to the network of individuals, organizations, resources, activities, and technologies involved in the creation and delivery of a product or service to the end consumer (Sunil Chopra, Peter Meindl, 2016) It encompasses the entire process from the raw materials to the final product, as well as the after-sales service and product disposal The table below presents some supply chain definitions that have been mentioned in previous studies

Table 2-1 The definition of Supply Chain

This network encompasses all the steps from acquiring raw materials to the final delivery of the finished product, including manufacturing, transportation, distribution, and retail

The supply chain is the interconnected network of organizations, people, activities, information, and resources involved in producing and delivering a product or

The supply chain is a critical component of business operations and illustrates a key role in ensuring the efficient flow of goods and services from suppliers to customers

The concept of supply chain management has evolved significantly over the years, with a focus on lean supply chain

This process involves optimizing all activities from the customer's point of view, eliminating waste, improving quality,

Author Definition Synonymous Differences management (LSCM) which emphasizes the systematic reduction of non-value-added activities and the optimization of all activities from the customer's perspective

This approach has been closely related to agile manufacturing and has been studied together with it service to the end consumer reducing costs, and increasing flexibility along the entire chain

Definition emphasizes the importance of collaboration, shared decision-making, open communication, shared vision, shared technology, and a high level of trust between the producer and their customers

The ultimate objective of the cohesive relationship within the supply chain is to deliver value to customers and achieve a desired state of customer satisfaction and loyalty for the organization

In the thesis, the author defines supply chain as a series of activities that combine processes that lead to the conversion of raw materials into finished products Supply Chain represents smooth and tight coordination in the chain of links to meet the goal of supply chain as being cost-effective and timely in handling customer requests

The supply chain comprises several critical components that work in unison to deliver products and services to the end consumer

Figure 2-1 The Supply Chain Stages (Sunil Chopra, Peter Meindl, 2016)

• Suppliers: Suppliers are at the forefront of the supply chain They provide the raw materials, components, and resources necessary for the production of goods or services

• Manufacturers: Manufacturers transform raw materials into finished products through the use of machinery, labor, and other production processes

• Distributors: Distributors play a key role in transporting and managing inventory within the supply chain They ensure that products are efficiently delivered to retailers or directly to customers

• Retailers: Retailers are responsible for making the final sale to the end- consumer They manage inventory, sales, and customer relationships

• Customers: Customers represent the end-goal of the supply chain, as they are the driving force behind demand Understanding and meeting customer needs is paramount for supply chain success

Supply Chain Management (SCM) is the strategic coordination and integration of all activities involved in the procurement, conversion, and logistics of a product or service This comprehensive approach aims to create value for end-customers and achieve a sustainable competitive advantage In the table below, the various definitions of supply chain management will be shown

Table 2-2 Definition of Supply Chain Management

The goal of supply chain management is to optimize efficiency, reduce costs, and ensure the timely delivery of high-quality products to customers

Supply chain management as the coordination and oversight of the flow of goods, services, and information from the initial sourcing of raw materials to the delivery of the final product to the end consumer This involves managing the various entities and processes involved in the supply chain, including procurement, manufacturing, distribution, and customer service

Adapting new optimization techniques to address complexities and risks in supply chains, as well as the need to identify appropriate supply chain performance attributes for accurate measurement and monitoring is one of the important tasks of supply chain management

The strategic coordination and integration of all activities involved in the sourcing, procurement, conversion, and logistics management of materials, products, and services

The most critical task is minimizing the number of measures in order to be effective, having balanced and comprehensive measures to cover different performance components of a supply chain, and setting targets for metrics

The application of lean thinking across the entire supply chain, extending beyond the traditional focus on manufacturing to include upstream supplier management,

The elimination of waste and optimal use of resources, with a focus on creating value for key stakeholders by offering high-quality products and services at low prices and in a timely manner is the

Author Definition Synonymous Differences downstream distribution network management, and overall supply chain integration and management main activities of Supply chain management

A set of organizations directly linked by upstream and downstream flows of products, services, information, and funds that collaboratively work to reduce cost and waste by efficiently pulling what is needed to meet the needs of individual customers

This definition emphasizes the collaborative nature of Supply chain management and its focus on reducing costs and waste through efficient processes

In the thesis, the author defines that the coordination and supervision of the flow of products, services, and information from the initial procurement of raw materials to the delivery of the finished product to the final customer is known as Supply Chain management This entails overseeing the several organizations and procedures that make up the supply chain, such as purchasing, production, delivery, and customer support The collaborative aspect of supply chain management and its emphasis on cutting expenses and waste via effective procedures are highlighted in this definition

The Role of Supply Chain Management in Business Success

Cost Optimization: SCM plays a pivotal role in identifying cost-saving opportunities across the supply chain, ranging from procurement efficiencies to streamlined logistics, contributing to overall profitability and competitive pricing

Customer Satisfaction: By delivering products or services in a timely, efficient, and reliable manner, SCM enhances customer satisfaction, fostering loyalty and positive brand perception

Agility and Adaptability: A well-managed supply chain enables businesses to swiftly respond to market changes, implement product innovations, and adapt to evolving customer preferences

Risk Mitigation: Proactive risk management strategies embedded in SCM minimize the impact of disruptions, safeguarding business continuity and reputation

Innovation and Sustainability: SCM facilitates the integration of sustainable practices, ethical sourcing, and innovative solutions, aligning businesses with environmental and social responsibility

Competitive Advantage: Organizations that excel in SCM gain a significant competitive edge, offering superior value, responsiveness, and reliability in the marketplace

The lean concept originated with Toyota and aims to achieve more with less human effort, time, and cost Initially implemented on the manufacturing shop floor, it has evolved to be applied across various industrial sectors and the entire supply chain Lean is described as a management philosophy concerned with identifying and eliminating waste within and beyond organizations' product value chain It focuses on achieving cost reduction, quality, and efficiency improvement with less effort through the appropriate implementation of lean tools, techniques, practices, and principles (Ugochukwu et al., 2012) The five lean principles, as articulated by Womack and Jones, include specifying value from the end customer view, mapping value to expose and eliminate waste, creating flow, establishing pull, and striving for perfection (Minato, 2021) Lean also involves a set of practices and techniques such as poka-yoke, just-in-time (JIT), setup time reduction (SMED), kanban/pull, standardized work, production leveling, 5S/housekeeping, small lot size, total productive maintenance (TPM), and others (Ugochukwu et al., 2012) Lean is a comprehensive business logic that emphasizes continuous improvement and waste elimination throughout the entire value chain

Lean Supply Chain Management refers to the application of Lean principles and practices in the management of the supply chain to optimize efficiency, reduce waste, and enhance overall performance (Norazi & Aliahmadi, 2022) In a Lean Supply Chain, the focus is on delivering maximum value to customers while minimizing non-value- adding activities and costs Below is a detailed explanation of Lean Supply Chain management

Table 2-3 Definition of Lean Supply Chain Management

It involves a shift from a short-term, trading mentality to a long-term commitment to supply chain partners, with a focus on cooperative and systematic waste elimination along the chain

A set of organizations directly linked by upstream and downstream flows of products, services, information, and funds that collaboratively work to reduce cost and waste by efficiently pulling what is needed to meet the needs of individual customers

The adoption of LSCM entails a different business model, in which improved profits arise from cooperation rather than bargaining or imposing power over supply chain partners

The core thrust of Lean

Management is to improve supply chain performance by eliminating waste, reducing costs, and improving overall organizational performance

It focuses on reducing waste and improving performance by adopting lean philosophy and techniques such as total quality management, just in time, and business process re- engineering

Lean Supply Chain Management focuses on maximizing value to the ultimate customer and extends the Lean production system down through the entire supply chain

Management is to improve the efficiency of the supply chain by implementing Lean tools and methodologies to identify and address root causes of problems, such as late delivery, and to streamline processes for continuous improvement

It emphasizes the use of lean tools, programs, and technologies to optimize processes across supply chain members, with a focus on reducing costs and increasing value

This approach extends beyond traditional lean manufacturing to encompass multiple organizations, activities, and information within the supply chain

In this thesis, Lean Supply Chain Management is a group of firms that are intimately linked by upstream and downstream flows of products, services, information, and cash and work together to decrease costs and waste by efficiently pulling what is required to satisfy the demands of individual consumers

2.1.5 Successful Lean Supply Chain Management

Perspectives of research on Lean Supply Chain Management

School of research represent contexts that help understand events in the interactive relationship It is also the background for explaining and predicting phenomena There are many different viewpoints and theoretical schools used by authors when researching lean supply chain practices However, the five most popular schools of thought are: resource based view, extended resource based view, relationship view, theory of constraints and dynamic capability theory

The resource-based view (RBV) offers valuable insights into the study of Lean Supply Chain Management (LSCM) The RBV framework focuses on the internal resources and capabilities of an organization as the primary drivers of competitive advantage (Chae et al., 2013)

According to the RBV, the effective implementation of Lean principles, such as waste reduction, continuous improvement, and supplier integration, can be considered rare and valuable organizational resources These Lean-related resources and capabilities are difficult for competitors to imitate, leading to sustainable competitive advantages The RBV suggests that resources must be inimitable and non-substitutable to provide long- term competitive benefits, and the successful adoption and implementation of LSCM practices, which are often path-dependent and socially complex, can be challenging for rivals to replicate

The RBV also emphasizes the importance of organizational capabilities in leveraging resources to achieve superior performance In the context of LSCM, the ability to integrate and coordinate various Lean practices, such as Just-In-Time, Kanban, and Total Productive Maintenance, can be considered a valuable organizational capability These Lean-related capabilities enable firms to respond effectively to changes in demand and market conditions, leading to enhanced operational efficiency and customer responsiveness

Furthermore, the RBV has been expanded to include the concept of dynamic capabilities, which refers to the ability to adapt and reconfigure resources in response to changing market conditions In the context of LSCM, the dynamic capability to adjust Lean practices and supply chain strategies based on fluctuations in demand and seasonality can be a source of competitive advantage Firms that can quickly and efficiently reconfigure their Lean supply chain processes to meet evolving customer needs are more likely to achieve superior performance

By applying the RBV lens, researchers can explore how the unique Lean-related resources, capabilities, and organizational practices can contribute to the sustained competitive advantage of firms in dynamic and volatile supply chain environments This perspective can provide valuable insights into the strategic and operational aspects of LSCM implementation

2.2.2 The Extended resource-based view

The extended resource-based view (ERBV) provides an even more comprehensive framework for understanding the role of Lean Supply Chain Management (LSCM) in achieving sustainable competitive advantage

The ERBV extends the traditional RBV by incorporating the influence of external resources and relationships on a firm's performance In the context of LSCM, this perspective highlights the importance of the supply chain ecosystem in leveraging Lean practices for competitive advantage

Firms engaged in LSCM do not solely rely on their internal resources and capabilities but also draw upon the resources and capabilities of their supply chain partners The successful implementation of Lean principles, such as just-in-time delivery, supplier

17 integration, and collaborative problem-solving, requires the integration and coordination of resources across the entire supply chain network

From the ERBV standpoint, the ability to develop and manage collaborative relationships with suppliers, customers, and other supply chain members can be a critical resource for firms pursuing LSCM These inter-organizational relationships enable the sharing of knowledge, the co-creation of innovative Lean practices, and the collective responsiveness to demand fluctuations and market changes

Moreover, the ERBV recognizes that a firm's supply chain position and the power dynamics within the network can influence its ability to leverage Lean resources and capabilities Firms occupying central or influential positions in the supply chain may have greater access to external resources and be better positioned to drive the implementation of LSCM initiatives across the network

The relational view provides an insightful lens for examining the role of Lean Supply Chain Management (LSCM) in fostering competitive advantage This perspective emphasizes the importance of inter-organizational relationships and collaborative interactions within the supply chain ecosystem

From the relational view, the successful implementation of LSCM practices is heavily dependent on the quality and nature of the relationships between supply chain partners Firms engaged in LSCM do not operate in isolation but must actively cultivate and manage their relationships with suppliers, customers, and other stakeholders to achieve the desired benefits

Key aspects of the relational view in the context of LSCM include trust, commitment, communication, and information sharing Developing high levels of trust and commitment between supply chain partners enables the open exchange of information, joint problem-solving, and the co-creation of innovative Lean practices Effective communication channels and the willingness to share critical data and insights facilitate the seamless integration of Lean processes across the supply chain

The Theory of Constraints (TOC) provides a valuable perspective on the integration of Lean Supply Chain Management (LSCM) practices TOC focuses on identifying and managing the critical constraints or bottlenecks within a system to improve overall performance

In the context of LSCM, TOC can offer insights into how organizations can leverage Lean principles to address the constraints and improve the efficiency of their supply chain operations The core tenet of TOC is that a system's performance is limited by its weakest link, and identifying and managing this constraint is the key to unlocking significant improvements

The previous research about drivers to successful implementing Lean

The driving factors for implementing Lean Supply Chain practices are pivotal for enhancing operational efficiency and achieving sustainable business success Below are the key driving factors that could deliver the high efficiency of Lean in industry:

Leadership is often defined as the action of leading a group of people or an organization

It involves guiding and impacting outcomes, enabling groups to work together to accomplish goals they couldn’t achieve individually (Barney, 2023) Leadership is not just about holding a position of authority; it’s about the actions and behaviors that inspire trust and motivate people towards a shared vision (What is leadership?, 2022)

Because lean consciousness and methods are starting to spread among senior managers and leaders in all sectors of business today, a leadership strategy must also be developed and implemented in order to transition from the traditional type of leadership, which is top-down leadership, to a leadership based on questioning, coaching, and teaching rooted from the scientific method of PDCA ( (DODANLI, 2017)

The implementation of Lean principles in supply chain management and logistics is significantly driven by the strength of supplier relationships By fostering a culture of close collaboration, suppliers and companies can share continuous improvement strategies, effectively synchronizing their workflows This synergy not only reduces waste throughout the supply chain but also enhances the overall quality of products and services As partners work together to streamline processes and eliminate inefficiencies, they create a more responsive and agile supply chain capable of delivering value to the end customer (Fadly Habidin & Mohd Yusof, 2013)

Customer focus plays a pivotal role in driving successful implementation of Lean principles within businesses By actively involving customers in the value creation process, organizations gain insights into customer needs and expectations This alignment ensures that Lean efforts directly contribute to meeting customer requirements Additionally, a customer-centric approach fosters agility, quality enhancement, and efficient workflows Mapping processes from the customer’s perspective allows businesses to identify bottlenecks and streamline resource allocation (Christopher & Towill, 2001) Leadership commitment to customer-centric Lean strategies ensures sustainable growth and customer satisfaction, transforming Lean from an operational tool to a strategic mindset focused on delivering value to customers

Organizational culture is the important part in shaping how businesses embrace change, prioritize efficiency, value teamwork, seek perfection, and drive customer-centric innovation (Habidin & Yusof, 2013) A culture that encourages adaptability and openness to change is essential for Lean practices Organizations that foster a growth mindset empower employees to embrace new methodologies, technologies, and process improvements (Cote, 2023) Additionally, a culture that values streamlined processes, continuous improvement, and resource optimization aligns perfectly with Lean goals Cross-functional collaboration is crucial for Lean implementation, and a culture that promotes teamwork, knowledge sharing, and collective problem-solving enhances Lean outcomes The pursuit of perfection is a core tenet of Lean, and an organizational culture

23 that encourages excellence, attention to detail, and relentless improvement aligns with this goal A strong organizational culture that embodies these elements provides the fertile ground for successful Lean implementation in manufacturing and supply chain operations, achieving operational excellence, waste reduction, and enhanced customer satisfaction (Editorial, 2022)

Extant research has highlighted the critical role of personal capabilities in the effective implementation of lean supply chain management practices A key aspect of LSCM is the need for employees to possess a diverse set of skills and competencies to support the successful execution of lean methodologies (VEGA, et al., 2020)

Firstly, problem-solving skills are essential, as employees must be able to identify and address issues that arise during the lean implementation process (Tanudiharjo et al., 2021) The ability to think critically and creatively to find solutions is paramount (Watfa

& Sawalha, 2021) Additionally, strong project management capabilities are required to coordinate and execute LSCM initiatives within the organization (Tanudiharjo et al., 2021)

Effective teamwork is another crucial personal capability, as lean implementation often requires cross-functional collaboration and collective problem-solving Employees must be able to work cohesively in teams to drive continuous improvement efforts Furthermore, proficiency in the use of lean tools and techniques is necessary for employees to optimize operations and eliminate waste (Yunus, et al., 2017)

Equally important is the employees' level of knowledge and understanding of lean concepts A deep grasp of the underlying principles and philosophies of lean management is crucial for the successful application of these practices Lastly, the organization must have a pool of highly competent human resources with the collective set of personal capabilities required to support the implementation and sustainability of LSCM (Yunus, et al., 2017)

Existing research has consistently highlighted the critical role of effective communication in the successful implementation of lean supply chain management

(LSCM) practices Communication is a fundamental element that enables the seamless integration of lean methodologies within an organization

Firstly, effective communication ensures that the entire workforce shares a common understanding of the lean approach, its goals, and expected outcomes This alignment is crucial for the successful execution of LSCM initiatives

Furthermore, communication is a crucial catalyst in fostering the manager-employee relationship, which is vital for driving continuous improvement and problem-solving efforts Open and transparent communication builds trust, collaboration, and a shared sense of purpose, necessary for effective implementation of lean practices

Management must emphasize the importance of communication and create a culture that encourages open dialogue and information sharing This enables the flow of knowledge, ideas, and feedback, making the LSCM system more responsive and adaptable

Through the definitions of Leadership, Supplier relationship, Customer focus, Organizational culture, Personal capability, Communication presented in section 2.3, the author has read previous research articles on Google Scholar, Research Gate, Emerald, etc and create a summary table of factors that help implement Lean Supply Chain management successfully as shown in table 5

Table 2-5 Summary of previous research

Situation of FMCG Industry in Vietnam

The Fast-Moving Consumer Goods sector in Vietnam serves as a significant contributor to the country's economy, embodying a dynamic and rapidly evolving landscape With a booming population and a growing middle-class segment, FMCG companies in Vietnam are faced with unique opportunities and challenges in their supply chain management practices Understanding the complexities of implementing lean supply

36 chain management within this industry is crucial for optimizing operational efficiency and competitiveness

Vietnam's FMCG sector reflects a diverse range of products such as food, beverages, personal care items, and household goods, catering to the everyday needs of consumers Rapid urbanization, increasing disposable incomes, and changing consumer preferences are driving the demand for FMCG products in the Vietnamese market As a result, FMCG companies are continuously seeking ways to enhance their supply chain operations to meet market demands efficiently

However, the FMCG industry in Vietnam is not devoid of obstacles when it comes to implementing lean supply chain management principles Factors such as varying levels of technological sophistication across different companies, constraints in infrastructure development, and limited availability of comprehensive data and information resources pose challenges to the seamless integration of lean practices Furthermore, cultural factors, resistance to change within organizational structures, and the necessity for strong top management commitment can influence the successful implementation of lean supply chain management systems in FMCG companies operating in Vietnam

By addressing the enabling factors and barriers within the context of the FMCG industry in Vietnam, this thesis aims to provide insights into the intricacies of implementing lean supply chain management practices, ultimately contributing to the enhancement of operational efficiency and competitive advantage for FMCG companies in the Vietnamese market.

Research gap of study

Existing research on LSCM implementation has primarily focused on developed economies, with limited empirical evidence from emerging markets like Vietnam Given the unique contextual factors and challenges faced by FMCG companies in developing countries, the applicability and relevance of LSCM enablers in these contexts need to be examined

While prior studies have identified individual LSCM enablers, there is a lack of comprehensive, empirically validated theoretical frameworks that capture the key enablers holistically This research aims to develop a more encompassing theoretical framework on LSCM enablers by integrating insights from the literature, industry

37 experts, and case study research Previous studies have often focused on the benefits and enablers of LSCM, but paid less attention to the practical barriers and challenges that companies face during implementation The in-depth case studies in this research can provide valuable insights into real-world implementation hurdles and how to overcome them

Much of the existing LSCM research is based on cross-sectional data, limiting the understanding of the dynamic and evolving nature of LSCM implementation Longitudinal research is needed to explore how LSCM enablers and their relative importance may change over time as companies undergo lean transformations By addressing these research gaps, the current study can make significant contributions to the LSCM literature, especially in the rapidly developing FMCG context of Vietnam In-depth, multifaceted exploration of the critical factors for successful LSCM implementation will provide valuable insights for both the academic community and business practitioners.

Research opportunities identification

Lean Supply Chain Management has evolved significantly over the years and its principles of waste reduction and process efficiency The global research landscape has seen a shift from a focus on lean manufacturing to a broader application of lean principles in supply chain management This evolution has been driven by the increasing complexity of global supply chains and the need for more efficient and sustainable operations The research has the 3 opportunities as below

Firstly, the proposed research is timely and significant due to the global perspective and local relevance While there is extensive research on Lean Supply Chain Management practices globally, there is a dearth of studies focusing on the Vietnamese context Conducting this research in Vietnam will provide valuable insights to address the local industry's unique challenges and opportunities

Secondly, the FMCG sector in Vietnam has experienced remarkable growth in recent years, yet there is limited academic research on LSCM implementation within this dynamic industry This study will contribute to a deeper understanding of the drivers and best practices for LSCM in the Vietnamese FMCG landscape The FMCG sector is

38 an emerging and understudied area, both in Vietnam and globally, making this research particularly valuable

Thirdly, the qualitative research design is well-suited to explore the nuanced factors that enable or hinder successful LSCM implementation By conducting in-depth interviews with industry experts and practitioners, the study can uncover the rich, contextual details that a quantitative approach may miss This approach will provide a comprehensive understanding of the complex and context-dependent nature of LSCM practices in the Vietnamese FMCG sector

The proposed research has the potential to make significant contributions to both theory and practice From a theoretical standpoint, it will expand the existing body of knowledge on LSCM, particularly in an understudied, yet rapidly evolving, market like Vietnam Moreover, the findings can provide practical guidance to FMCG companies in Vietnam, empowering them to navigate the complexities of LSCM implementation and achieve sustainable competitive advantages.

Proposed study framework

Based on the theories synthesized in Sections 2.1, 2.2, and 2.3, the study framework proposed in this thesis includes 6 Drivers of Lean Supply Chain Management: Leadership, Supplier Relationship, Customer Focus, Organizational Culture, Personal Capability, and Communication

RESEARCH DESIGN

Research flow

The research implementation process is presented in Figure 3-1 Details of the steps are as follows:

- Define the study topic: Based on the practice and theory of Lean Supply Chain Management to state the problem to be researched

- Conduct theoretical research: Learn theories related to Supply Chain Management and Lean Supply Chain Management, and consolidate knowledge about problem-solving steps, supporting tools, and case study research methods The problem-solving methods and supporting tools used in this thesis are in- depth interview, case study, Interpretive Structural Modeling (ISM) and MICMAC

- Conduct applied research: As part of the applied research process, it is critical to deeply investigate the company's current LSCM situation through a structured case study methodology This involves gaining a comprehensive understanding of the organization's existing LSCM practices

- The research will explore the 3 key objectives:

+ Explore drivers for the implementation of Lean supply chain with in FMCG companies: To explore the key elements that contribute to the successful implementation of LSCM, as well as the drivers of LSCM in the FMCG industry in Vietnam, a comprehensive literature review is essential Extant research highlights several critical elements that are essential for the successful implementation of LSCM Foremost, having skilled and well-trained personnel who possess the necessary capabilities to not only execute lean tools and techniques, but also cultivate a culture of continuous improvement, is paramount Additionally, management must deliberately foster an organizational environment that embraces mistakes as learning opportunities, thereby encouraging calculated risk-taking and experimentation among employees Equally important is the promotion of knowledge sharing across the organization, which facilitates greater employee involvement and engagement in LSCM initiatives In the specific context of the FMCG industry in Vietnam, the drivers for LSCM adoption include the need to increase cost efficiency, improve responsiveness to rapidly changing customer demands, and enhance overall

41 operational performance to maintain a competitive edge By understanding these key elements and industry-specific drivers, FMCG companies in Vietnam can strategically implement LSCM practices to achieve sustainable competitive advantages

+ Explore the advantages that could support implementing LSCM in the

FMCG supply chain of 2 big companies in Vietnam by understand the status of

2 big FMCG companies in Vietnam After that, identify the drivers of 2 companies that can lead to the success of implementing Lean Supply Chain Management The approach method is in-depth interview with experts in Lean, Supply Chain, Lean Supply Chain Management in Vietnam FMCG industries and case study Experts are currently working at different FMCG companies, diverse in form and factors Each expert has over 5 years working in the FMCG industry

+ Recommend approaches to apply lean supply chain for typical company in

Vietnam to enhance overall business outcomes and reduce waste during supply chain operations To achieve this purpose, the study compares the drivers that explored through literature review, in-depth interview and case study After that, the study visualizes the experts’ opinion by ISM and MICMAC

The problem-solving tools in the study are literature review, in-depth interview, case study, ISM and MICMAC.

Problem solving tools in the study

In-depth interviews are a qualitative research method used to collect data on participants' personal experiences and perspectives The goal is to gather detailed insights that illuminate an individual's viewpoint and the perceived significance around a specific topic, problem or process (Rutledge & Hogg, 2020)

The format of an interview is determined by its specific goals and objectives Interviews can be broadly categorized into three main types based on the methods used to gather information: structured, semi-structured, and unstructured (non-directive) (Showkat & Parveen, 2017)

In a structured interview, the interviewer follows a pre-determined list of questions Conversely, in a semi-structured interview, the interviewer has a list of topics or general areas to cover, rather than a fixed set of questions This allows the conversation to flow more freely, with new questions arising organically as the discussion develops (Showkat

The case study method is a valuable research approach that goes beyond just understanding and developing preliminary theory It can also be used to refute or extend existing concepts through its observational richness Case studies are often more effective at identifying causal and predictive relationships compared to other empirical research methods (Moghadam et al., 2021)

Moghadam et al., (2021) illustrate key strengths of the case study approach are:

- It allows the phenomenon to be studied in its natural setting, enabling the generation of meaningful and relevant theory from observing actual practice

- It facilitates answering the "why" question, rather than just "what" and "how", providing a relatively full understanding of the nature and complexity of the complete phenomenon

- It is well-suited for early, exploratory investigations where the variables are still unknown, and the phenomenon not yet fully understood

Other advantages of the case study method include the richness of its explanations and its potential for testing hypotheses in well-described, specific situations

Interpretive Structural Modelling (ISM) is a methodology that helps in breaking down a complex issue or system into simpler parts (Mabrouk, Ibrahim, & Eddaly, 2021) The key characteristics of the ISM methodology are:

- It is interpretive, as it determines the interrelationships among various factors (Attri, Dev, & Sharma, 2013)

- It is a display system, as the digraph (directed graph) displays all the connections and the complete structure (Attri, Dev, & Sharma, 2013)

- It is a gathering and learning process that transforms unclear and poorly articulated mental models into visible, well-defined models useful for many purposes (Attri, Dev, & Sharma, 2013)

The step-by-step procedure of the ISM methodology is as follows (Mabrouk, Ibrahim,

Step 1 List down the factors of the system

Step 2 Identify the key enablers or barriers affecting the problem or phenomenon under investigation

Step 3 Establish a Structural Self-Interaction Matrix (SSIM) to represent the inter-relationships between the enablers

- The questionnaire is designed to collect expert opinions on the relationship between each factor and the remaining factors and the relative direction of the relationship

- Establish the contextual relationship between each pair of enablers (i, j) This involves determining whether enabler "i" influences, is influenced by, both influences and is influenced by, or has no relation with enabler "j"

- Based on the contextual relationships, assign one of four possible symbols to represent the direction of the relationship (Attri, Dev, & Sharma, Interpretive Structural Modelling (ISM) approach: An Overview, 2013):

• 'X' - Enablers "i" and "j" influence each other

• 'O' - Enablers "i" and "j" have no relation

- The resulting SSIM is a square matrix that captures the pairwise relationships between all the identified enablers This matrix provides a visual representation of the complex interrelationships within the system, which is essential for the subsequent steps of the ISM methodology (K J Manjunatheshwara, S Vinodh, 2018)

- Establishing the SSIM is a critical step in the ISM process as it lays the foundation for further analysis, such as developing the reachability matrix and

44 the hierarchical model, which ultimately lead to a better understanding of the system and support decision-making (Mahender Singh Kaswan, 2019)

Step 4 Based on the SSIM, form the initial reachability matrix, and then the final reachability matrix after removing all the transitivity links

- After establishing the Structural Self-Interaction Matrix (SSIM) in the previous step, the next step is to develop the initial reachability matrix from the SSIM This is done by converting the directional relationships represented by the SSIM symbols (V, A, X, O) into a binary matrix (Mahender Singh Kaswan, 2019), where:

• If the relationship between enablers i and j is 'V', then the cell (i,j) is assigned a value of 1, and the cell (j,i) is assigned a value of 0

• If the relationship between enablers i and j is 'A', then the cell (i,j) is assigned a value of 0, and the cell (j,i) is assigned a value of 1

• If the relationship between enablers i and j is 'X', then both the cells (i,j) and (j,i) are assigned a value of 1

• If the relationship between enablers i and j is 'O', then both the cells (i,j) and (j,i) are assigned a value of 0

- The resulting initial reachability matrix represents the direct relationships between the enablers However, the ISM method also considers indirect relationships, known as transitivity Transitivity is a basic assumption that if enabler A is related to enabler B, and enabler B is related to enabler C, then enabler A is also related to enabler C (Mahender Singh Kaswan, 2019)

- To capture the transitive relationships, the final reachability matrix is generated by applying the transitivity rule to the initial reachability matrix This involves repeatedly multiplying the initial reachability matrix with itself until no further changes occur in the matrix The final reachability matrix represents the complete set of direct and indirect relationships between the enablers

- The final reachability matrix is a crucial input for the next step of the ISM method, which involves partitioning the matrix into different levels, ultimately leading to the development of the interpretive structural model

Step 5 Partition the final reachability matrix into different levels

- For each enabler, identify the reachability set and the antecedent set from the final reachability matrix:

• Reachability set: The set of enablers that can be reached from the given enabler, including the enabler itself

• Antecedent set: The set of enablers that can reach the given enabler, including the enabler itself

- Determine the intersection set for each enabler, which is the common elements between the reachability set and the antecedent set

- Identify the top-level enabler(s) in the hierarchy, which are the enablers where the reachability set and the intersection set are the same

- Remove the top-level enabler(s) from the consideration and repeat steps 1-3 for the remaining enablers until all levels have been identified

- The partitioning of the final reachability matrix into different levels helps to establish the hierarchical relationships among the enablers The top-level enablers are those that are influenced by other enablers but do not influence any other enablers The lower-level enablers are those that influence the higher-level enablers

- This level partitioning is a crucial step in the ISM method, as it provides a visual representation of the hierarchical structure of the system, which is essential for understanding the relationships between the enablers and developing the final interpretive structural model

Step 6 Remove the transitivity and draw a digraph to represent the contextual relationships

- The impact of the transitive rule on the final reachability matrix is that it introduces indirect relationships between the enablers, which may not be immediately apparent from the initial SSIM The transitive relationships are essential for understanding the complete structure of the system, but they can also obscure the direct relationships

- To remove the transitivity and draw the digraph, the following steps are performed:

• Review the final reachability matrix and identify the direct relationships between the enablers, ignoring the indirect (transitive) relationships

• Construct a digraph by representing each enabler as a node and drawing directed arrows between the nodes to indicate the direct relationships The direction of the arrows follows the contextual relationships established in the SSIM

• Ensure that the digraph accurately reflects the direct relationships between the enablers, without any transitive links This means that if there is a direct relationship between enabler A and enabler B, and a direct relationship between enabler B and enabler C, the digraph should show a direct link from A to B and a direct link from B to C, without an additional link from A to C

Information need

The Information Needs table outlines the research objectives, data sources, and analysis methods for exploring LSCM implementation in the Vietnamese Fast Moving Consumer Goods sector The main goals are to understand the drivers, advantages, and recommended approaches for LSCM, using a combination of secondary (public papers) and primary (stakeholder interviews, internal documents) data sources, analyzed by comparing and cross-checking the information The data timeframe ranges from 2014 to 2024, focusing on the latest internal documents, to provide a comprehensive understanding of LSCM implementation in the Vietnamese FMCG industry

Table 3-1 The need of information of thesis

Why What What How How Where When

Type Information Needs How to collect How to analyze Information source

To To explore the drivers for the implementation of LSCM within FMCG companies

The key elements that contribute to the successful implementation of lean supply chains

Compare and check the relevant

Interviews with key stakeholders to understand their perspectives on the driving factors behind successful Lean Supply Chain implementations in Vietnam's FMCG sector

Observe and interview the employee

Compare and check the relevant

The newest version of internal documents

To explore the advantages that could support implementing LSCM in the

FMCG supply chain of two big companies in Vietnam

Primary The information of 2 companies Interview the employee

Compare and check the relevant

The newest version of internal documents

Secondary The advantages of 2 companies that contribute to the successful

Observe and interview the employee

Compare and check the relevant

Why What What How How Where When

Type Information Needs How to collect How to analyze Information source

Data/ Information range implementation of lean supply chains internal documents

To recommend approaches to apply lean supply chain for typical company in Vietnam to enhance overall business outcomes and reduce waste during supply chain operations

Insights into change management methodologies and strategies that can be implemented by 2 companies to foster a culture of continuous improvement, and drive successful LSCM

Interview the employee, read the public papers

Compare and check the relevant

The newest version of internal documents

Factors recognition

As presented in part 2.3.1, Leadership is defined as a series of actions that leaders take for an organization, helping an organization move in the right direction of development and bringing value to business Leadership includes the management team providing training and development to employees, allocating finances and resources for support, encourage culture sharing and knowledge and experience, involvement in problem- solving and decision making, quality initiatives and organizational strategy, allow employee involvement in continual improvement activity, effective communication and collaboration, and better dissemination, develop a strategic plan to translate their vision into actionable goals and initiatives (Habidin & Yusof, 2013)

These sub-factors are inherited from (Habidin & Yusof, 2013) research

1 Leadership provides training and development to promote lean culture

2 Leadership allocates financial and resource (Habidin & Yusof, 2013)

3 Leadership encourages culture-sharing knowledge and experience

Leadership involves in problem solving and decision-making, quality initiatives and organizational strategy

Leadership allows employee involvement in continual improvement activity, effective communication and collaboration, and better dissemination

6 These leaders develop a strategic plan to translate their vision into actionable goals and initiatives

Based on the information provided in part 2.3.2, effective supplier relationship management is characterized by several key elements Companies should strive to develop sustainable and continuous improvement efforts in their relationships with suppliers This involves fostering long-term, cooperative relationships between the organization and its suppliers Supplier selection should be based on quality performance and quality certifications within the firms Effective two-way communication, long-term relationship and commitment, as well as continuous collaboration can help achieve successful supplier development programs Suppliers should be contractually committed to annual cost reductions, and key suppliers should be located in close proximity to the customer's plants Suppliers' quality and reliability should enable them to perform just-in-time delivery, further enhancing the efficiency of the supply chain By incorporating these elements, companies can establish sustainable and mutually beneficial relationships with their suppliers, leading to improved operational performance and a stronger competitive position (Habidin & Yusof, 2013) These sub-factors are inherited from (Habidin & Yusof, 2013) research

Table 3-3.The Supplier relationship factors

Company should have sustainable and continuous improvement effort on their relationship with the supplier

Effective supplier relationship should have long term and cooperative relationship between organization and suppliers

9 Supplier selection based on quality performance and quality certified within the firms

Effective two-way communication, long term relationship and commitment, as well as continuous collaboration can help achieve the program on supplier development

11 Suppliers are contractually committed to annual cost reductions

12 Key suppliers are located in close proximity to customer plants

13 Suppliers’ Quality and Reliability enables them to perform Just In Time delivery

According to the information provided in part 2.3.3, customer focus is a crucial aspect of quality performance enhancement Customer feedback can play a significant role in helping organizations improve their quality initiatives Customers should be actively involved in the development of future products, and they should be encouraged to share current demand information with the marketing department Customers' ability to seek assistance from the company should be facilitated, and the importance of the relationship with customers should be periodically evaluated Design decisions should be made based on customer requirements, and a strong focus on customer needs and satisfaction should be the most important practice for implementing quality initiatives By incorporating these customer-centric practices, organizations can better align their quality efforts with the needs and expectations of their customers, leading to improved performance and a stronger competitive position (Habidin & Yusof, 2013)

These sub-factors are inherited from (Habidin & Yusof, 2013) research

Table 3-4 The Customer Focus factors

14 Feedback is given from customer can help to enhance quality performance

15 Customers are actively involved in future product (Habidin & Yusof, 2013)

16 Customers share current demand information with marketing department

17 Customers' ability is factilitated in seeking assistance from company

18 Importance of relationship with customer is periodically evaluated

19 Design is determined according to customer requirement

Focus on customer need and satisfaction should be the most important practice for implementing quality initiatives

As mentioned in part 2.3.4, the top management team has the critical duty and responsibility to shape and cultivate a lean, agile, and adaptable organizational culture Management must establish a company culture that embraces mistakes as a natural part of the learning and growth process, as this mindset is essential for successful lean implementation Lean processes can also support organizational performance in terms of the company's branding, as a lean culture highly emphasizes quality and continuous improvement However, a failure to change the organizational culture may lead to a failed lean implementation To effectively shape the organizational culture, top management must actively foster a work environment that encourages calculated risk- taking, promotes knowledge sharing, and empowers employees to continuously seek out and implement more efficient ways of working By cultivating such a culture, organizations can unlock the full potential of lean methodologies and achieve sustainable competitive advantages (Tanudiharjo et al ,2021)

These sub-factors are inherited from Tanudiharjo et al (2021) research

Table 3-5 The Organizational culture factors

Top management team has the duty and responsibility to shape and cultivate a lean, agile, and adaptable organizational culture

22 Management has the critical responsibility of establishing a company culture that embraces

55 mistakes as a natural part of the learning and growth process

23 Lean processes can also support organizational performance in terms of the company’s branding

24 Lean culture highly emphasizes quality Tanudiharjo et al (2021)

25 Lean culture highly emphasizes continuous improvement

26 A failure to change the organizational culture may lead to a failed lean implementation

According to the information provided in part 2.3.5, the personal capabilities required for successful lean implementation within an organization include:

Employees must possess strong problem-solving skills to identify and address issues that arise during lean initiatives They should also have well-developed project management capabilities to effectively coordinate and execute lean projects Solid teamwork skills are essential for employees to collaborate effectively in driving lean process improvements across the organization (Yunus, et al., 2017)

Additionally, employees must be proficient in the proper use of lean tools and techniques, demonstrating their ability to optimize operations through the application of these methodologies A deep understanding of lean concepts and principles is also necessary, as it enables employees to effectively apply lean thinking and practices Ultimately, the organization must have a pool of highly competent human resources with the collective set of personal capabilities required to support the successful implementation and sustenance of lean practices By ensuring their workforce possesses these critical skills and knowledge, organizations can unlock the full potential of lean management and achieve sustainable competitive advantages (Yunus, et al., 2017) These sub-factors are inherited from Yunus et al (2017) research

Table 3-6 The Personal capability factors

27 Employees have problem solving skill Yunus et al (2017)

28 Employees have project management skill Yunus et al (2017)

29 Employees have solid teamwork Yunus et al (2017)

30 Employees are capable to use lean tools properly Yunus et al (2017)

31 Employees have adequate knowledge about lean concept Yunus et al (2017)

32 Competent human resources Yunus et al (2017)

Based on the information provided in part 2.3.6, effective communication is critical for the successful implementation of lean practices within an organization Firstly, all employees must properly comprehend the lean philosophy and its underlying principles Communication serves as a crucial catalyst in fostering the manager-employee relationship, which is essential for the effective execution of lean initiatives Management must consistently emphasize the importance of such communication and create an environment that encourages open dialogue and information sharing across the organization (Tanudiharjo et al., 2021)

By ensuring clear and effective communication, organizations can align all employees towards a common understanding of lean methodologies, thereby facilitating their seamless integration into daily operations Additionally, strong communication helps to build trust and collaboration between managers and employees, which is crucial for driving continuous improvement and problem-solving efforts Overall, effective communication is a critical success factor in the implementation and sustainability of lean practices within the organization (Tanudiharjo et al., 2021)

These sub-factors are inherited from Tanudiharjo et al (2021) research

33 Effective communication is critical in lean implementation

34 All employees should properly comprehend the lean philosophy

Communication is crucial as a catalyst of the manager-employee relationship in lean implementation

36 Management must emphasize the importance of such communication

In-depth expert interview

3.5.1 In-depth expert interview design

The data collection method used in the thesis is in-depth interviews with experts In- depth interviews with experts based on questions and structure in a pre-prepared outline (see Appendix B) to collect opinions on experiences and best practices of experts Data collected is based on the level of information saturation, that is, when the information is saturated, the interview will stop

Interview subjects: experts are managers with knowledge and experience in Lean, Supply Chain, Lean Supply Chain Management Specifically, senior managers, managers and assistant managers of FMCG companies in Vietnam and have 5 years or more experience

The content of the questionnaire includes 2 parts:

- General information section includes personal information of the expert such as full name, work unit, working position, number of years working in the FMCG industry, and size of the company being worked at This section uses nominal factors

- Main information section: the driving factors of implementing Lean Supply Chain Management in FMCG company in Vietnam In this section, a questionnaire with 36 sub-drivers and the questions focus on What, How, Why will be used to assess whether these sub-drivers are influencing the implementation of LSCM in the industry context in Vietnam or not

3.5.2 In-depth expert interview results

The majority of experts are in agreement with the factors of Leadership However, the first expert analyzed that in item 5, the leadership team does not merely allow employees to participate in continuous improvement activities but must find ways to encourage and motivate employees to engage in these activities These activities help employees feel valued in the implementation of Lean Supply Chain Management Therefore, statement

5 should be revised to "Leadership encourages and motivates employee involvement in continuous improvement activities, effective communication and collaboration, and better dissemination"

Expert 5 suggested that in statement 1, the timeframe of application should be mentioned Training and development are only provided in the initial stage of the project However, the other experts agreed that training and development need to be provided throughout the implementation of Lean Supply Chain Management

The remaining statements are clear and well-understood, so they can be maintained as is The experts did not propose adding or removing any statements for this set of factors

According to the experts, statement 7 should be revised to "The company must have sustainable and continuous improvement efforts in their relationship with the supplier" to reflect the win-win spirit between the partners

According to the experts, in statement 12, the proximity of the supplier to the customer's plant is only a favorable factor if the customer chooses that supplier In addition to proximity, there are many other critical factors that determine whether the plant will select that supplier, such as product quality, delivery quality, delivery time, etc Therefore, the experts unanimously agreed that this opinion should be eliminated The remaining statements are clear and well-understood, so they can be maintained as is The experts did not propose adding or removing any statements for this set of factors

For the factors of Customer Focus, the experts requested the author to explain the meaning of the statements and provide input for revisions:

- For statement 15, the experts suggested revising it to "Customers are actively involved in future product development."

- For statement 16, the experts suggested revising it to "Customers share current demand information with the trade marketing department."

- For statement 19, the experts agreed that it should be revised to "Product design is determined according to customer requirement."

- The remaining statements are clear and do not require any further changes

For the factors of Organizational Culture, the experts agreed that most of the statements are easy to understand, however, there are a few points that need improvement:

- For statement 26, should be revised to "A failure to change the organizational culture may cause negative effect to a failed lean implementation"

The remaining statements are clear and well-understood, so they can be maintained The experts did not propose adding or removing any statements for this set of factors

For these factors, the experts provided the following feedback:

- For statement 28, the feedback is that project management skills are more suitable for the management level, not necessarily for 100% of employees

- For statement 32, the experts suggested revising it to "Company should build the competent key users/ Champions/ Taskforce teams"

The remaining statements are clear and well-understood so that they can be maintained The experts did not propose adding or removing any statements for this set of factors

The experts agreed that statement 35 and statement 33 are synonymous, so they recommended consolidating these two statements into a single statement: “Effective communication, as a catalyst of all employee's relationship, is critical in lean implementation", and eliminating statement 35

The remaining statements are clear and well-understood, so they can be maintained The experts did not propose adding or removing any statements for this set of factors

The table below presents the details of the revised factors after in-depth expert interviews The adjustments compared to the original statements are shown in bold and italics

Table 3-8 The factors have been revised based on the expert interviews

No Factors The factors have been revised based on the expert interviews

1 Leadership provides training and development to promote lean culture

Leadership provides training and development to promote lean culture

2 Leadership allocates financial and resource

Leadership allocates financial and resource F2

3 Leadership encourages culture sharing and knowledge and experience

Leadership encourages culture sharing and knowledge and experience

4 Leadership involves in problem-solving and decision- making, quality initiatives and organizational strategy

Leadership involves in problem-solving and decision- making, quality initiatives and organizational strategy

5 Leadership allows employee involvement in continual improvement activity, effective communication and collaboration, and better dissemination

Leadership encourages and motivates employee involvement in continual improvement activities, effective communication and collaboration, and better dissemination

6 These leaders develop a strategic plan to translate their

These leaders develop a strategic plan to translate their F6

61 vision into actionable goals and initiatives vision into actionable goals and initiatives

7 The company should have sustainable and continuous improvement efforts in their relationship with the supplier

The company must have sustainable and continuous improvement efforts in their relationship with the supplier

8 Effective supplier relationships should have long-term and cooperative relationships between organization and suppliers

Effective supplier relationships should have long-term and cooperative relationships between organization and suppliers

9 Supplier selection based on quality performance and quality certified within the firms

Supplier selection based on quality performance and quality certified within the firms F9

10 Effective two-way communication, long term relationship and commitment, as well as continuous collaboration can help achieve the program on supplier development

Effective two-way communication, long term relationship and commitment, as well as continuous collaboration can help achieve the program on supplier development

11 Suppliers are contractually committed to annual cost reductions

Suppliers are contractually committed to annual cost reductions

12 Key suppliers are in close proximity to customer plants

Reliability enables them to perform Just in Time delivery

Suppliers’ Quality and Reliability enables them to perform Just in Time delivery

14 Feedback given from customers can help to enhance quality performance

Feedback given from customers can help to enhance quality performance

15 Customers are actively involved in future product

Customers are actively involved in future product development

16 Customers share current demand information with the marketing department

Customers share current demand information with the trade marketing department

17 Customers' ability is facilitated in seeking assistance from company

Customers' ability is facilitated in seeking assistance from company

18 The importance of relationship with customer is periodically evaluated

The importance of relationship with customer is periodically evaluated

19 Design is determined according to customer requirement

Product design is determined according to customer requirement

20 Focus on customer need and satisfaction should be the most important practice for implementing quality initiatives

Focus on customer need and satisfaction should be the most important practice for implementing quality initiatives

21 Top management team has the duty and responsibility to

Top management team has the duty and responsibility to shape F20

63 shape and cultivate a lean, agile, and adaptable organizational culture and cultivate a lean, agile, and adaptable organizational culture

22 Management has the critical responsibility of establishing a company culture that embraces mistakes as a natural part of the learning and growth process

Management has the critical responsibility of establishing a company culture that embraces mistakes as a natural part of the learning and growth process

23 Lean processes can also support organizational performance in terms of the company’s branding

Lean processes can also support organizational performance in terms of the company’s branding

24 Lean culture highly emphasizes quality

Lean culture highly emphasizes quality F23

25 Lean culture highly emphasizes continuous improvement

Lean culture highly emphasizes continuous improvement F24

26 A failure to change the organizational culture may lead to a failed lean implementation

A failure to change the organizational culture may cause negative effect to a failed lean implementation

27 Employees have problem solving skill

Employees have problem solving skill F26

28 Employees have project management skill

Management levels have project management skill F27

30 Employees are capable of using lean tools properly

Employees are capable of using lean tools properly F29

31 Employees have adequate knowledge about lean concept

Employees have adequate knowledge about lean concept F30

32 Competent human resources Company should build the competent key users/

33 Effective communication is critical in lean implementation

Effective communication , as a catalyst of all employee's relationship, is critical in lean implementation

34 All employees should properly comprehend the lean philosophy

All employees should properly comprehend the lean philosophy

35 Communication is crucial as a catalyst of the manager- employee relationship in lean implementation

36 Management must emphasize the importance of such communication

Management must emphasize the importance of such communication

STUDY RESULTS

Results of exploring the drivers in implementing LSCM in the FMCG industry in

From the 36 factors affecting the results of implementing Lean Supply Chain Management compiled from previous studies, the experts compared them with the practical experience in the FMCG industry in Vietnam, and the majority agreed with most of the factors However, out of the 36 factors, the experts unanimously agreed that

2 factors should be removed: 1 factor should be removed as it is not a core factor for the success of implementing Lean Supply Chain Management in the FMCG industry in Vietnam, and the remaining factor was removed as it was synonymous with other factors Additionally, the experts provided feedback to revise the content of 8 factors to make them more understandable and suitable for the industry context

After the process of consulting the experts through in-depth interviews, the research synthesized 34 key factors in the practice of Lean Supply Chain

Table 13 has presented the details of the 34 selected factors

Based on the experts' opinions on the relationships between the factors, the author used the Smart ISM tool (Naim Ahmad & Ayman Qahmash, 2021) to develop the ISM model The finalized ISM model was constructed and refined by the experts regarding the relationships between the 34 factors, supporting the process of assessing the importance level of the factors The figure below illustrates the ISM model analyzing the factors driving the successful implementation of Lean Supply Chain Management in the FMCG industry according to the experts' opinions

Figure 4-1 The ISM model to analyze the drivers in successful Lean Supply Chain

Based on the results of the ISM method, clusters were formed using the MICMAC approach To partition the factors into the respective clusters, the row and column values were calculated based on the final reachability matrix The Dependence Power and Driving Power are presented in the appendix

Figure 4-2 Distribution of Key Factors in Lean Supply Chain Practices Based on

Expert Opinions Using the MICMAC Method

Figure 6 presents the MICMAC analysis, where the Driving Power is shown on the vertical axis and the Dependence Power is shown on the horizontal axis

The factors with low Dependence Power and low Driving Power are called autonomous factors and are marked as cluster I According to the experts, only factor 18: The importance of relationship with customer is periodically evaluated belongs to the autonomous factor cluster Additionally, factor 18 is an isolated factor that is not connected to the system of other factors However, factor 18 has a Driving Power of 16, almost reaching the threshold of 17 (the threshold for cluster IV), so it can also be considered that factor 18 is related to the factors in cluster IV

The factors with high Dependence Power and low Driving Power are called dependent factors, and they have little ability to influence/cause other factors These are marked as cluster II Level 1 factors include 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, and 34

Level 3 factors including 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, and 19 are classified as linkage factors and are marked as cluster III These are intermediate factors that have a significant influence and are also influenced by other factors These factors mainly under Suppliers relationship and Customer focus This indicates that maintaining good relationships with Suppliers and Customers is very important for the successful implementation of Lean Supply Chain Management

The level 4 factors including 1, 2, 3, 4, 5, and 6 are the driving or independent factors, marked as cluster IV These factors occupy the bottom of the hierarchy in the ISM model, as they have low dependence and high driving (influence) power These factors fall under Leadership, which proves that Leadership is one of the most important factors driving the success or failure of Lean Supply Chain Management.

Case study in typical FMCG companies in Vietnam

For the purposes of this illuminating case study, the insightful author carefully handpicked Company A and Company B as the two preeminent titans of the FMCG industry in the vibrant Vietnamese market The stringent selection criteria stipulated that the chosen organizations must boast ubiquitous, household name brands enjoyed by consumers nationwide, maintain a sizable workforce of over 2,000 dedicated employees spanning the length of the country from the northern to southern reaches, and have already pioneered the implementation of cutting-edge Lean Supply Chain Management practices within their operations By meticulously identifying these two industry juggernauts as the focal points of this comprehensive analysis, the author has ensured a rich, multi-faceted examination of supply chain excellence in the Vietnamese corporate landscape

This leading beverage company, Company A, operates an extensive manufacturing and distribution network across Vietnam, with five state-of-the-art production facilities

69 located strategically throughout the country These facilities produce a diverse range of products, including carbonated soft drinks, bottled water, and canned beverages, catering to the evolving preferences of Vietnamese consumers

The company's vertically integrated supply chain ensures a reliable and consistent flow of high-quality raw materials and packaging components, sourced both internationally and from domestic suppliers across the northern, central, and southern regions of Vietnam This approach allows the company to maintain tight control over its production processes and quality standards, while also supporting local businesses and economies

With a talented workforce of over 2,000 employees, the company harnesses the latest manufacturing technologies and lean production methods to drive operational efficiency and flexibility As a result, the company can meet the growing demand for its products, boasting an annual production capacity of more than 4 billion bottles and cans of beverages

The company's expansive distribution network spans the length and breadth of Vietnam, ensuring widespread availability and accessibility of its brands in both urban and rural markets This comprehensive logistics infrastructure, combined with the company's deep understanding of local consumer preferences, has solidified its position as a dominant force in the Vietnamese beverage industry

Underpinning the company's success is its unwavering commitment to innovation, as evidenced by its dedicated research and development team This team works tirelessly to develop new and exciting beverage formulations, flavors, and packaging solutions that cater to the evolving needs and tastes of Vietnamese consumers, while also exploring sustainable production methods to minimize the company's environmental footprint

In addition to being a leading FMCG company in the Vietnamese beverage industry, Company A is one of the pioneers in applying lean manufacturing principles to enhance its operational efficiency The company has dedicated significant efforts in implementing methods such as just-in-time production, waste elimination, and continuous improvement (kaizen) in its manufacturing facilities

These efforts have helped the company achieve some improvements in productivity, quality, and cost reduction However, the company is still in the process of perfecting and further enhancing its lean manufacturing practices to become the industry leader in this area within Vietnam

4.2.1.1 Design of collecting the information at Company A

Information collection method: Using observation techniques and in-depth interviews with experts based on semi-structured questions in a pre-prepared outline to collect opinions, in-depth understanding, and experiences of the experts The data is collected based on the level of information saturation

Experts are managers with knowledge and experience in Lean Supply Chain, Lean Manufacturing, and business operations, specifically: Company Director, Head of Engineering Department, Head of Procurement, Head of Planning, Head/Deputy Head of Production, etc with at least 3 years of experience and currently working at Company

A There were 12 experts, who are currently employed at Company A, that conducted in-depth interviews to provide insights and perspectives on the drivers of Company A in implementing Lean supply chain management This includes 2 directors, 5 managers, and 5 supervisors from the Sales, Human Resources, Supply Chain, Operations, and Procurement departments

The questionnaire consists of two main parts:

- General Information: Includes personal information about full name, job position, and number of years of experience at Company A

- Main Information: Key factors in the lean supply chain practices at Company A This part uses a semi-structured questionnaire to understand the Why, What and How the factors can drive LSCM

During the interview process, the author first interviewed the Supervisors/Managers across various departments to gather opinions and gain specific perspectives on the implementation of Lean Supply Chain management at the Company A The author then consolidated the feedback from the experts before meeting with the management level Directors For the areas where the Directors' opinions aligned with those of the Managers and Supervisors, the author noted down and asked for additional insights For

71 the areas where the Directors' opinions differed from the Managers and Supervisors, the author probed further into external aspects before arriving at conclusions

4.2.1.2 Drivers of Lean Supply Chain Management at Company A

Based on the data collection and synthesis of the findings from the case study at Company A, the research has identified 6 factors in the successful lean supply chain practices of Company A: the Leadership factors, the Supplier Relationship factors, the Customer Focus factors, the Organizational Culture factors, the Personal Capability factors, and the Communication factors with 34 sub-factors

The detailed contents of these factors are discussed in the tables below

Table 4-1 The factors in Implement Lean Supply Chain Management in Company A

The management provides training on lean concepts and promotes a lean culture in all departments: Operations, Supply

Chain, Procurement, etc It is important to develop training programs that teach the principles of Lean, the tools used in

Lean This ensures that all employees from the lowest operational level, all the way up to management, have a more accurate view of Lean and a deeper understanding of Lean principles In addition, management regularly visits the factory to observe employees' work and ask questions to strengthen relationships with employees, find improvement opportunities, and enhance employee knowledge

2 The management provides financial and human resources support for Lean projects that deliver significant cost savings F2

The management encourages a culture of knowledge and experience sharing, not only for Lean culture but also for other knowledge areas Periodic training courses on digital, management skills, and soft skills are organized and applied to all employees In addition, the "Sharing is caring" sessions also

No Company A Encoded bring about widespread knowledge sharing, contributing to the company's team spirit

Comparison of the key factors in Lean Supply Chain Management practices with

The key factors in lean supply chain practices identified from the in-depth expert interviews and case studies at Company A and Company B will be discussed in comparison with previous studies

The symbols used in the comparison table are as follows:

✓ This finding is equivalent to previous research

 This finding is different from previous research

❖ New finding, not present in previous research

4.3.1 The key factors in Lean Supply Chain Management practices that are consistent between the in-depth industry expert interviews and the case studies of Company A and Company B

The Leadership factor group is related to the company providing training, development, financial and other resources to promote a lean culture within the company It is important to develop training programs that teach the principles of Lean, and the tools used in Lean This ensures that all employees from the lowest operational level, all the way up to management, have a more accurate view of Lean and a deeper understanding of Lean principles

Additionally, leadership also encourages a culture of knowledge and experience sharing, continuous improvement culture, and building the strategic plan to deliver Lean

Table 4-3 Leadership factors in lean supply chain practices that are equivalent

In-depth interview with expert

Leadership provides training and development to promote lean culture

✓ Leadership provides training and development to promote lean culture

✓ The companies have implemented comprehensive lean training programs to educate employees at all levels on lean principles and tools Management also actively engages with frontline workers, visiting the factory floor to observe operations, identify improvements, and strengthen relationships - further reinforcing the lean culture

In-depth interview with expert

Leadership allocates financial and resource

✓ Leadership allocates financial and resource

✓ The companies allocate financial and human resources to support high-impact lean projects that generate significant cost savings This goes beyond just training, with dedicated funding and a Continuous Improvement team to facilitate lean initiatives

Leadership encourages culture sharing and knowledge and experience

✓ Leadership encourages culture sharing and knowledge and experience

✓ Management fosters a culture of knowledge and experience sharing, organizing regular training on a wide range of topics from lean to digital skills and soft skills for all employees This "sharing is caring" approach strengthens the company's team spirit and collective development Leadership involves in problem- solving and decision- making, quality initiatives and organizational strategy

✓ Leadership involves in problem-solving and decision- making, quality initiatives and organizational strategy

✓ Leadership aligns the supply chain strategy with organizational goals and communicates this vision, enabling an agile, holistic approach to problem-solving, quality, and strategic alignment The plant manager's active involvement in Kaizen events and championing of lessons learned further reinforces strong leadership as a cornerstone of lean supply chain management

In-depth interview with expert

Leadership allows employee involvement in continual improvement activity, effective communication and collaboration, and better dissemination

✓ Leadership encourages and motivates employee involvement in continuous improvement activities, effective communication and collaboration, and better dissemination

✓ The companies have established a robust continuous improvement culture, where all employees actively engage in Kaizen activities Leadership also promotes open communication and collaborative problem- solving, empowering frontline staff to share improvement ideas that are then implemented

These leaders develop a strategic plan to translate their vision into actionable goals and initiatives

✓ These leaders develop a strategic plan to translate their vision into actionable goals and initiatives

✓ The companies have a well-defined lean transformation strategy, with clear objectives and initiatives Leadership communicates this strategic plan and vision to all employees to ensure alignment and buy-in across the organization

The company focuses on strategic partnerships with key suppliers, collaborating closely on continuous improvement to drive enhancements across the diverse supply chain They maintain long-term contracts, joint investments, and a rigorous supplier qualification process to ensure reliable quality and delivery

Table 4-4 Supplier relationship factors in lean supply chain practices that are equivalent

In-depth interview with expert

The company should have sustainable and continuous improvement efforts in their relationship with the supplier

✓ The company must have sustainable and continuous improvement efforts in their relationship with the supplier

✓ The FMCG company's supply chain involves a diverse range of suppliers, but the majority of raw materials come from a select group of strategic partners The procurement team conducts regular reviews with these key suppliers, analyzing performance data and collaborating on continuous improvement initiatives to drive enhancements across the supply chain Effective supplier relationships should have long-term and cooperative relationships between organization and suppliers

✓ Effective supplier relationships should have long-term and cooperative relationships between organization and suppliers

✓ The company strategically partners with a select group of key suppliers, especially for critical materials like preforms and closures, rather than frequently changing suppliers based solely on price They establish long- term contracts and jointly invest in quality and productivity improvements, recognizing that even small changes can significantly impact the supply chain

Supplier selection based on quality performance and quality certified within the firms

✓ Supplier selection based on quality performance and quality certified within the firms

✓ The company has a diverse supply chain but strategically partners with key suppliers, closely collaborating on continuous improvement They also maintain a rigorous supplier qualification process focused on quality to ensure reliable material delivery

In-depth interview with expert

Effective two- way communication, long term relationship and commitment, as well as continuous collaboration can help achieve the program on supplier development

✓ Effective two- way communication, long term relationship and commitment, as well as continuous collaboration can help achieve the program on supplier development

✓ The company adopts a win-win strategy, collaborating closely with all suppliers, including smaller ones, to drive continuous improvements across the supply chain through regular business reviews, data sharing, and joint Kaizen initiatives

The company collects customer feedback to enhance quality performance in customer focus factors They have built a team that directly interacts with customers and selects the most valuable input for improvements The company provides a user-friendly customer support portal for easily logging inquiries and accessing resources They periodically evaluate the importance of the customer relationship through satisfaction surveys and collaborative business planning The product design process is heavily influenced by market research and direct collaboration with key retail partners to understand customer needs

Table 4-5 Customer focus factors in lean supply chain practices that are equivalent

In-depth interview with expert

Feedback given from customers can

✓ Feedback given from customers can

✓ The company builds a team that interacts directly with customers and receives feedback When there is feedback from

In-depth interview with expert

Case study company B help to enhance quality performance help to enhance quality performance customers, the company will review and select the feedback to make improvements

Customers' ability is facilitated in seeking assistance from company

✓ Customers' ability is facilitated in seeking assistance from company

✓ Company has implemented a user-friendly customer support portal that allows clients to easily log inquiries, track the status of their requests, and access a knowledge base of common troubleshooting

The importance of relationship with customer is periodically evaluated

✓ The importance of relationship with customer is periodically evaluated

✓ The company conducts customer satisfaction surveys to evaluate factors like order fulfillment, delivery, and ease of doing business It also has collaborative joint business planning sessions with major retail customers to review forecasts, plans, and KPIs

Design is determined according to customer requirement

✓ Product design is determined according to customer requirement

Recommendations for the company to improve the Lean Supply Chain Management 107

4.4.1 Enhancing the importance of Leadership to improve the Lean Supply Chain

The role of Leadership is crucial for the successful implementation of Lean Supply Chain Management Leaders need to undertake several key actions to drive lean implementation

Firstly, leaders should provide training and development opportunities to promote a lean culture within the organization This includes training employees on lean principles and tools, as well as creating avenues for them to learn from and share their lean experiences

By building this knowledge and expertise, leaders can cultivate a workforce that is well- equipped to embrace and apply lean thinking

Secondly, leaders must allocate the necessary financial and other resources to support lean initiatives This involves ensuring adequate funding for lean programs, as well as providing the required infrastructure and technology to facilitate lean implementation Without the proper resource allocation, lean efforts may be hindered or unsustainable Thirdly, leaders should encourage a culture of knowledge and experience sharing They can create an environment and mechanisms that allow for the effective exchange of information and lean best practices among employees Organizing forums, workshops, and other collaborative platforms can foster this sharing of knowledge and help propagate lean understanding throughout the organization

Fourthly, leaders should actively involve themselves in problem-solving, decision- making, quality initiatives, and the overall organizational strategy related to lean By directly participating in these activities, leaders can demonstrate their commitment to lean, drive the implementation forward, and ensure that lean principles are integrated into the core of the business

Lastly, leaders should empower employees to be involved in continuous improvement activities, promote effective communication and collaboration across functions, and facilitate the better dissemination of lean knowledge and practices This employee engagement and cross-functional alignment are critical for the successful and sustained implementation of lean supply chain management

4.4.2 Enhancing the importance of Supplier relationship to improve the Lean

In the FMCG industry, the supply chain is incredibly diverse, encompassing a wide range of suppliers These can include everything from food and beverage manufacturers to companies involved in constructing factories While there can be thousands of suppliers, strategic partners, who deliver about 80% of raw materials to the company, make up only about 10% of the total The procurement team conducts quarterly business reviews with the company's key suppliers, analyzing quality metrics, delivery performance, and cost trends Together, they identify opportunities for process improvements and collaborate on joint kaizen events to drive ongoing enhancements in the supply chain

If a supplier is a strategic partner, all of the company's KPIs are shared with the supplier to ensure alignment This includes on time in full, quality, and supplier performance evaluation Regular meetings are held to discuss quality and supplier performance evaluation; in serious cases, immediate actions are taken to resolve issues promptly The company's supplier contracts include clauses that require a specified percentage of annual cost reduction, typically 3-5%, to be achieved through productivity improvements, process optimization, and economies of factors

The company has established long-term, cooperative relationships with its key suppliers There is a focus on continuous improvement and joint problem-solving efforts with suppliers to drive ongoing enhancements in the supply chain Cross-functional supplier development teams work closely with supplier counterparts to identify and implement process improvements

The company has a rigorous supplier qualification process that assesses factors like quality management systems, defect rates, and industry certifications (e.g ISO 9001) Only suppliers that meet stringent quality criteria are approved and included in the vendor list Quality and reliability are critical factors in the supplier selection and evaluation process

There is ongoing, two-way communication between the company and its key suppliers Regular business reviews, sharing of quality data, and joint kaizen events facilitate continuous collaboration The company is committed to long-term relationships and has established clear processes for resolving issues with suppliers promptly

4.4.3 Enhancing the importance of Customer focus to improve the Lean Supply

Building strong customer relationships is a critical enabler of lean supply chain management success The company has established a dedicated team that interacts directly with customers to capture their feedback and gain valuable insights When customer feedback is received, the company carefully reviews and selects the most impactful inputs to drive continuous improvements across the supply chain This direct customer engagement helps the company better understand evolving market demands and align its production planning accordingly

The company has further enhanced the customer experience by implementing a user- friendly support portal This allows clients to easily log inquiries, track the status of requests, and access a knowledge base of troubleshooting information By streamlining the support process, the company is able to be more responsive to customer needs and build trust through seamless interaction Additionally, the company regularly conducts customer satisfaction surveys to gauge the strength of key retail relationships These surveys provide visibility into critical metrics like order accuracy, on-time delivery, and overall ease of doing business The resulting insights allow the company to identify areas for improvement and develop targeted initiatives to enhance the customer experience

To further align with customer requirements, the company invests in comprehensive market research This involves gathering feedback on product features, packaging, pricing and other design elements through surveys, focus groups and concept testing However, the company is strategic in its new product development, choosing to focus on enhancements that are expected to appeal to most of its customer base rather than attempting to cater to niche demands This customer-centric approach helps the company optimize inventory, reduce waste, and deliver greater value

The company also actively solicits and acts upon customer feedback through multiple channels, including surveys, social media, and direct interactions The insights gleaned from the company's Voice of the Customer program are then used to guide the development of quality initiatives that directly address pain points and meet evolving customer needs and expectations The company has established a dedicated customer

111 market insight team to capture this feedback and ensure it is effectively incorporated into the company's continuous improvement efforts

Furthermore, the company has established quality circles that include representatives from its most important customers These cross-functional teams work together to identify quality issues, analyze root causes, and develop corrective actions Involving customers directly in the quality improvement process ensures that the company's initiatives are truly focused on enhancing the end-user experience

By systematically enhancing the importance of customer focus, the company can closely align its lean supply chain practices with evolving market demands This customer- centric approach not only improves the overall customer experience, but also drives greater operational efficiency, reduced waste, and stronger brand loyalty - all of which are critical business outcomes for sustaining a competitive advantage in today's dynamic marketplace

4.4.4 Enhancing the importance of Organizational culture to improve the Lean

CONCLUSION, MANAGERIAL IMPLICATIONS, LIMITATIONS AND

Conclusion of the study

Based on the theoretical foundations from previous research and the status of the FMCG industry in Vietnam, a qualitative study was conducted to explore the key factors in implementing Lean Supply Chain Management in several FMCG companies in Vietnam The study then proposed managerial implications to help improve the practice of LSCM

The study achieved three main objectives:

First, it explored 6 drivers with 36 sub-drivers that help implement LSCM globally After in-depth interviews with industry experts, the study identified 6 drivers with 34 sub-drivers that facilitate LSCM implementation in the FMCG industry in Vietnam Second, the study explored 6 main drivers in the LSCM practices of two typical companies in Vietnam - dominant players with extensive domestic and international supply chains, and large employee bases The main drivers identified were Leadership, Supplier Relationship, Customer Focus, Organizational Culture, Personal Capability, and Communication, comprising 29 similar factors and 5 differences from the previous research

Third, based on the study's findings, the thesis proposed several recommendations to improve LSCM implementation for some FMCG companies in Vietnam, especially the two case study companies Companies should focus on enhancing employee morale,

117 strategic planning, shaping and disseminating a Lean culture, and supporting investments and commitments to develop employee skills and knowledge Externally, the companies should establish long-term strategies with suppliers, share KPIs, jointly solve problems, and set long-term goals Additionally, companies should focus on customers, satisfying their needs to achieve supply chain effectiveness.

Managerial Implications

Leadership must demonstrate a strong commitment and determination in implementing and sustaining Lean Supply Chain Management They must play the role of inspiring and motivating the entire organization Developing strategic partnerships with suppliers is crucial Companies need to focus on information sharing, collaborative process improvements, and benefit sharing Focusing on understanding and fulfilling customer needs is the key to achieving success in Lean Supply Chain Management Companies need to continuously listen and respond promptly to customer feedback Cultivating a culture of continuous improvement, teamwork, and employee empowerment is highly important Investing in developing employee capabilities through training, knowledge sharing, and experience sharing is essential Establishing effective and seamless communication channels from top-down and bottom-up will contribute significantly to the successful implementation of Lean Supply Chain Management

The key role of leadership/management is:

- Demonstrating a strong commitment and determination in implementing and sustaining Lean Supply Chain Management

- Playing the role of inspiring and motivating the entire organization to adopt and embrace Lean Supply Chain Management

In other words, effective leadership and commitment from top management is critical for the successful implementation and sustainability of Lean Supply Chain Management Managers need to set the tone, provide a vision, and motivate the entire organization to work towards the goals of Lean Supply Chain Management Their leadership and drive is essential for driving the cultural and operational changes required for Lean implementation across the company

The passage emphasizes that management must take an active and dedicated role in championing Lean Supply Chain Management, rather than just mandating it from the

118 top Their ability to inspire, guide and support the organization through the Lean transformation is a key managerial implication highlighted in the text

In the thesis, some potential ethical implications based on the managerial practices and organizational culture that are recommended:

- Supplier Relationships: Developing strategic partnerships with suppliers and focusing on collaborative process improvements and benefit sharing implies an ethical consideration around fair and transparent dealings with suppliers This suggests a move away from adversarial supplier relationships towards more equitable, win-win arrangements

- Customer Focus: Emphasizing a focus on understanding and promptly responding to customer needs points to an ethical commitment to customer centricity and putting the customer's interests first

- Employee Empowerment: Cultivating a culture of continuous improvement, teamwork and employee empowerment indicates an ethical orientation towards valuing and respecting the workforce, providing them with a voice, and enabling their growth and development

- Transparency and Communication: Establishing effective top-down and bottom- up communication channels suggests a commitment to open, transparent and accountable management practices

While not explicitly stated, these managerial implications point to an underlying ethical foundation of fairness, integrity, social responsibility and respect for stakeholders - employees, customers and suppliers The focus seems to be on creating an organizational culture and practices that balance business objectives with ethical considerations.

Limitations and further directions

The study focused only on two FMCG companies in Vietnam, so the results may not be representative of the entire industry The research methodology relied primarily on case study analysis and ISM modeling; additional quantitative studies are needed to generalize the findings The study was conducted before Jun 2024, and hence needs to be updated and expanded to reflect the latest situation

Due to the limitation of time and scope of the topic, there are many aspects of the topic that have not been mentioned Some recommendations for future research are given below:

Expanding the scope of the study beyond the FMCG sector in Vietnam would provide valuable insights into industry-specific differences in the influencing factors for Lean Supply Chain Management implementation Extending the research to FMCG companies in other countries in the region could also help understand the impact of contextual and cultural factors on the adoption and success of Lean practices

Adopting a mixed-methods research approach, combining qualitative case studies with quantitative surveys and financial data analysis, would enable a more comprehensive and holistic understanding of the topic Conducting periodic data collection over time would also be beneficial to monitor the evolution of the influencing factors, as best practices in Lean Supply Chain Management are likely to change

Delving deeper into the financial factors and their role as key drivers or enablers for successful Lean implementation is another important area for future research Analyzing the financial implications, costs, and benefits would help better understand the business case and feasibility of Lean Supply Chain Management, which could be a critical consideration for driving wider adoption

By broadening the scope, employing mixed methods, tracking changes over time, and focusing on financial factors, future studies can provide more robust and generalizable insights that go beyond the specific context of the FMCG sector in Vietnam This would enhance the practical relevance and applicability of the research findings for organizations looking to implement Lean Supply Chain Management

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Appendix A SYNTHESIS OF RELATED STUDIES

Results Limitations Proposal for further research directions

Nurul Fadly Habidin, Sha'ri Mohd Yosof

Quantitative, literature review, survey, a continuous manufacturing improvement approach that eliminates waste

The research context is influenced by the industry's need to improve operational performance and remain competitive in the global market

The study identifies several CSFs for LSS implementation, including leadership, structured improvement procedures, quality information and analysis, supplier relationship, JIT practices, customer focus, and focus in metrics The survey results indicate that

The research is limited by the response rate of 57% from the 100 questionnaires sent out, which may affect the generalizability of the findings

Additionally, the study relies on self- reported data from the survey respondents, which

Future research could explore the structural relationship between LSS practices and organizational performance This would involve examining how the identified CSFs contribute to specific performance

Results Limitations Proposal for further research directions leadership and customer focus are the most practiced CSFs among the Malaysian automotive companies that participated in the study could introduce response bias outcomes within the Malaysian automotive industry

Additionally, researchers may consider expanding the sample size and including other industries to validate the findings and explore the applicability of the CSFs across different contexts

Results Limitations Proposal for further research directions

2014 Critical success factos of lean manufacturi ng practices for the

Siti Norhafiz an Hibadull ah, Nurul Fadly Habidin

Quantitative The research context for the study is the

This industry is characterized by a domestically developed manufacturin g structure and has been

The study found that customer focus is a critical success factor influencing the direct success of lean manufacturing practice implementation in the Malaysian automotive industry

Other critical success factors identified include supplier management, employee involvement, just-in-

The document does not explicitly state the limitations of the study However, common limitations in quantitative research can include the representativeness of the sample, the generalizability of the findings beyond the study context, the potential for response bias in questionnaire-based research, and the

The study recommends that future research should explore the influence of LMPs on environmental performance in the Malaysian automotive industry This suggests that the next direction for research could involve a more in- depth analysis of the environmental impacts of lean

Results Limitations Proposal for further research directions protected to produce national champions and automobile components

The study was conducted within this specific industry and geographic location, which provides the time practices, and statistical process control The research suggests that these factors are essential for the successful adoption and implementation of LMPs in the industry reliance on self- reported data manufacturing practices and how they can be optimized to achieve sustainable outcomes within the industry

Results Limitations Proposal for further research directions situational context for the research

Sina Moradi, Piia Sormun en

Civil engineerin g and constructio n manageme nt

Qualitative The research context spans various geographical locations, including Hong Kong, the USA, and other countries, with a focus on the years

The results of the study include the identification of barriers, enablers, and implications of implementing lean construction, as well as the exploration of their relatedness

The limitations of the study include the potential impact of keyword selection on the reliability and generalizability of the findings

The next direction for the research could involve addressing contextual differences and exploring support from regulatory bodies in developing and developed countries to contribute to the wider application of lean construction

Results Limitations Proposal for further research directions

Rio Kharism a Tanudih arjo, Florence

Ng Jia Yun, John Heng Aik Joo, Ivan C

Moving Consumer Goods (FMCG) industry

Quantitative The study focused on factors such as organizationa l culture, personnel capability, communicati on, leadership, and implementati on, and involvement, and their impact on

The results of the study indicated that all four tested factors

- organizational culture, personnel capability, communication, and leadership - positively and significantly impacted lean implementation in Indonesia's FMCG industry The study also found that organizational culture was the