analysis of current application status of quality management system according to metro standard at classic fine foods company limited

MINISTRY OF EDUCATION AND TRAINING HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY AND EDUCATION GRADUATION THESIS INDUSTRIAL MANAGEMENT Ho Chi Minh City, April 2024ANALYSIS OF CURRENT APPLI

COMPANY OVERVIEW

Introduction to Classic Fine Foods Company Limited

1.1.1 General information about Classic Fine Foods Company Limited

Official Name: CÔNG TY TNHH THỰC PHẨM NGON CỔ ĐIỂN

International Name: CLASSIC FINE FOODS COMPANY LIMITED

Address: Lot Vb.17b-19-21a, Road 22A, Tan Thuan Export Processing Zone, Tan Thuan Dong Ward, District 7, Ho Chi Minh City, Vietnam

Representative: Mr Laurent Alain Michel Mouric

Website: https://www.classicfinefoods.vn/

Currently, CFF is part of the Metro Group, which operates in 11 countries across Europe, the Middle East, and Asia

In Viet Nam, the company’s headquarter is located in Tan Thuan Export Processing

Zone, District 7, Ho Chi Minh City, and it has four other branches, including:

• CFF Hanoi: 14/196/1 P Nguyen Son, To 21, Long Bien, Hanoi, Vietnam

• CFF Danang: 6 Tran Nhan Tong, Tho Quang, Son Tra, Danang, Vietnam

• CFF Nha Trang: 55HF+JCC, Phuoc Ha, Nha Trang, Khanh Hoa, Vietnam

• CFF Phu Quoc: 128 Tran Hung Dao Street, Duong To, Phu Quoc, Kien Giang 92500, Vietnam

1.1.2 History of Formation and Development

Classic Fine Foods Vietnam was established in 2005, recognized as a reputable enterprise in the field of importing and distributing food and beverages in Vietnam, with a mission to select and deliver special ingredients and premium, unique products to meet the needs of chefs worldwide

Year 2000: Classic Fine Foods company was established

Year 2001: Commenced business operations, acquired several companies, and established the Olivier Group

Year 2002: Classic Fine Foods Philippines was established

Year 2004: The company expanded business operations to European countries, starting in the United Kingdom

Year 2005: The company further expanded to two countries, namely France and Vietnam

Year 2006: Business expansion extended to the Middle East region, with the United Arab Emirates chosen as the country of presence

Year 2007: Classic Fine Foods Indonesia was established

Year 2008: Macau became the next country where Classic Fine Foods established its presence

Year 2012: With significant growth in Macau, the company decided to expand business operations to the Chinese market

Year 2015: Marks a significant milestone in the formation and development of Classic Fine Foods when Metro acquired the group Metro is a leading wholesale corporation operating in 35 countries with over 150,000 employees worldwide

Classic Fine Foods continuously strives to become a leading enterprise in sourcing quality food from simple to hard-to-find ingredients worldwide to meet customer

7 demands Therefore, Classic Fine Foods primarily operates in the import and distribution of food and beverages

Moreover, CFF currently implementing project cutting and packaging cheese which is heavyweight and distributed at retail channels such as Mega Market, Top Market, An Nam, etc

Figure 1.5 Cheese product at Cutting room

(Source: Cutting room at CFF)

The products are imported, stored, and distributed

Currently, Classic Fine Foods company is importing, storing, and distributing almost all types of products from raw materials, packaged processed foods, and beverages, etc These types of products are all stored in the same company warehouse

At Classic Fine Foods, food products are primarily categorized into three main types:

Dry and Pastry Goods: These products require storage temperatures ranging from 16°C to 20°C They include Biscuits, snacks, fresh milk, dried fruits and nuts, oils, vinegar, spices, pasta, and various grains

Chilled Goods: Chilled products require storage temperatures between 0°C to 10°C They include Cheese, yogurt, canned meats, chilled beef, etc

Frozen Goods: Frozen products require storage temperatures below -18°C They include Frozen meats (beef, chicken, lamb), frozen seafood, frozen bread, ice cream, frozen fruit juices, etc

Organizational chart and functions of departments at the company

*Note: The orange boxes are departments directly related to the food safety management system

Vision: Classic Fine Foods' vision is to develop a global network of subsidiaries, becoming the only food company capable of supporting and supplying chefs with the products they need when their work takes them from one country to another around the world

1 Service: CFF has geographically broad coverage in all countries where the company operates, with one of the fastest response services available CFF operates globally, ensuring the highest quality of service according to international standards

2 Customer Priority: CFF seeks innovations to meet market trends and consumer needs while being the first company to provide innovative products that help customers stand out and save their time and energy

3 Product Expertise: Team members are experienced, well-trained, and knowledgeable about many of the company's products

4 Quality: CFF is always looking for optimal solutions for food safety and traceability Globally recognized certifications (BRC, ISO 22000) authenticate the ability to store and distribute products to the highest quality standards

5 Suppliers: Focus on sourcing, building, and maintaining long-term relationships with high-quality, innovative, handmade, and value-for-money products

6 Customer Relationships: Build and maintain long-term relationships with customers through daily conversations across all media, regular website visits, and numerous integration events Customers are at the center of every decision CFF makes

Mission: To become an expert in the food industry, operating in 11 countries worldwide, across Europe, the Middle East, and Asia Wherever you are, you will find branches of CFF The company's philosophy is straightforward - bring you the best from around the world

Human Resources Department: Responsible for recruitment, attendance management, annual training planning and implementation, salary policy development, and fostering company culture

Accounting Department: Records and executes accounting activities including tracking and recording all transaction activities such as receipts, payments, purchases, and sales Prepares financial reports, monitors accounts receivable, and follows up with customers for timely payments

IT Department: Executes investment activities, installs WiFi, and machinery, and repairs errors in the operation of Highjump and SAP applications Conducts data

11 analysis related to inventory, website pricing, sales figures, revenue, and customer- related data

Customer Service Department: Processes orders, creates Sales Orders and Delivery

Notes, acts as a customer care hotline, and resolves customer inquiries

Purchasing Department: Conducts forecasting activities on production volume and customer demand, identifies suppliers, and works with them to procure goods Collaborates with the Sales team to obtain information on purchasing needs

Retails Department: Coordinates with retail partners such as supermarkets, and distributors to place company products in these outlets for sales

Sales Department: Collaborates with the Purchasing department to forecast purchasing needs and works with high-end customers such as restaurants and hotels, building strong relationships especially with chefs to generate revenue for the company

Marketing Department: Manages the company's retail websites, fanpages Executes advertising campaigns, organizes events, designs banners, posters, and product packaging

1.3.4 Function of departments directly affecting quality and safe product

Hình 1.8 Organizational chart of departments directly affecting quality and safe product

(Source: Synthesize by the author)

Warehouse and Logistics Department: Responsible for receiving products, checking quantity and quality before warehousing, and documenting product evidence including images and temperature records for information retrieval Ensures proper storage of products at appropriate temperatures and picks items based on delivery notes Also handles packaging and conducts pre-delivery inspections

Quality Assurance (QA) Department: Ensures that the quality management system is operated according to the group's requirements Reviews and updates work procedures to align with practical needs conducts annual internal assessments based on ISO 22000:2018 standards, and implements programs to define non-conformities and identify improvement opportunities In addition, in terms of operations, the QA department conducts quality checks on warehouse hygiene, product arrangement, temperature control, and factory conditions Maintains records, and documents, collects and resolves customer complaints, and fulfills customer requests related to product quality such as completing questionnaires, improving non-conformities, and evaluating suppliers as per Metro's requirements

THEORETICAL BASIS

Overview of Quality

The definition of Quality has existed for a long time and is widely applied in almost every aspect of life There is no perfect definition of quality, depending on the purpose and different perspectives of each individual or organization to determine what quality is Experts in the field of quality always have an overview of the concept of quality as follows:

According to Crosby (1979), quality is conformance to requirements, which is highly right in business Requirements must be clearly stated and measurements continuously carried out to determine conformity to those requirements Non-conformance is identified as a lack of quality, quality issues become a matter of non-conformance

According to Feigenbaum (1983), quality is determined by the customer's decision, not by the determination of engineers or marketing strategists Quality is based on the experience of customers with the product and service The quality of a product or service stems from various factors such as product characteristics, marketing capabilities, technology, production, and maintenance

According to Ishikawa (1985), in a narrow sense, quality means the quality of the product In a broader sense, quality means the quality of work, quality of information, quality of processes, quality of assignments, quality of staff including workers, engineers, managers, specialists, quality of systems, quality of the company, and quality of objectives

According to Juran (1988), quality includes the characteristics of a product that meet customer needs, and thereby, these characteristics bring in customer satisfaction with the product

Ta Thi Kieu An, et al (2010) confirmed that the definition of quality has existed for a long time and has been widely used in all aspects of life This demonstrates that quality is not merely a simple aspect but a complex domain encompassing technical, economic, and social factors Perspectives on quality can differ depending on the objectives and

14 tasks of production or business and can start from the product itself, the producer, or market demands

The definition of quality is quite relative According to the International Organization for Standardization (ISO), quality is defined as: "The entirety of features and characteristics of a product or service that is capable of satisfying stated or implied needs." Simply, a product is considered to have good quality when it meets specific requirements of the customer Overall, there are many different viewpoints or definitions of quality from experts According to the author's understanding, quality is simply about meeting specific customer requirements If all customer demands are fulfilled by the product, then that is quality

In the previous section, we have understood what quality is and recognized that achieving product quality is a process that requires clear division and smooth coordination among interacting factors To achieve this, we need an extremely detailed and comprehensive quality management system to manage and control activities related to quality According to ISO 9000:2007, quality control is defined as "part of quality management focused on fulfilling quality requirements" (Nguyen Kim Dinh, 2010) According to Ta Thi Kieu An, et al (2010), quality control involves operational activities and techniques applied to meet quality requirements Therefore, it is necessary to inspect and manage all factors affecting quality during the control process These factors include:

Input Materials: Ensuring that raw materials meet quality standards from the initial stage to prevent errors

Personnel: Employees must understand their job roles and receive comprehensive training in skills, as well as be equipped with the necessary tools for work

Methods and Production Processes: It is necessary to develop suitable production methods and procedures suitable to the enterprise's capabilities and closely monitor during production to promptly handle any unexpected changes

Equipment Maintenance: Periodic maintenance of equipment is essential Check equipment before using it to ensure stable operation

According to Ngo Phuc Hanh (2011), quality control is the process of monitoring and evaluating the implementation of quality control objectives or tasks that have been set This involves random checks to assess any changes in product quality compared to established standards The factors that need to be controlled in this process include: Human factors such as knowledge, job understanding, and current production methods Sources of raw materials, storage conditions, and preservation methods Machinery and equipment - maintenance schedules, testing methods, repairs, and safety measures Working environment - temperature, lighting, and working conditions

From the definitions of quality control by the experts mentioned above, the author summarizes that "Quality control is the process of inspecting critical factors that every business possesses: raw materials (inputs), production conditions, production methods, human resources, machinery, the working environment during the production process, and finally the finished product, storage conditions, transportation (outputs of this production process) to ensure that these factors are always implemented correctly according to the established procedures."

Overview of Quality Management System

According to information from the American Society for Quality (asq.org), a Quality Management System (QMS) is defined as a formal system that records processes, procedures, and responsibilities to achieve quality objectives and quality policies The QMS helps coordinate and direct organizational activities to meet customer requirements while enhancing organizational capability and performance

According to information from the American Society for Quality (asq.org), a Quality Management System (QMS) is defined as a formal system that records processes, procedures, and responsibilities to achieve quality objectives and quality policies The QMS helps coordinate and manage organizational activities to meet customer requirements while enhancing organizational capability and performance

The elements and requirements of a Quality Management System: Each element and principle of a QMS helps organizations achieve common goals by meeting customer and organizational requirements A QMS addresses the specific needs of the organization; however, common elements of all systems include: Quality policy and quality objectives; Quality manual; Procedures; Work instructions; Records of results; Data management; Internal processes; Customer satisfaction comes from product quality; Improvement opportunities; Quality analysis

2.2.2 ISO 22000:2018 – Food Safety Management System

ISO 22000:2018 is a set of standards, principles, and procedures for controlling food safety issued by the International Organization for Standardization (ISO) ISO 22000:2018 is similar to ISO 9001:2015 as it has all the principles of this quality management system and incorporates the Hazard Analysis and Critical Control Points (HACCP) program to provide a framework for operating, monitoring, and continuously improving the Food Safety Management System (FSMS) o History of development:

In 1969, prerequisite standards for food safety and usage were established HACCP, the first system to analyze risks and control critical points, was introduced HACCP was combined with prerequisite standards and based on the foundation of the ISO 9000 quality management system In 2005, the International Organization for Standardization (ISO) officially released the first version of ISO 22000, providing a food safety management framework for businesses in the food industry

To ensure compliance with modern food safety standards, ISO released the latest version of ISO 22000 on June 19 th , 2018, replacing the previous version from 2005 Organizations certified according to ISO 22000:2005 have a 3-year period to update and transition to the new version, ISO 22000:2018, and re-register their certification All certifications under ISO 22000:2005 will expire after June 18, 2021 The new version ISO 22000:2018 has many changes compared to the old version, especially the use of the High-Level Structure (HLS), which facilitates integration with other management systems such as ISO 9001, ISO 14001, ISO 45001, ensuring consistency and international uniformity in the field of food safety

17 o Benefits of Applying for and Obtaining ISO 22000:2018 Certification:

Businesses can easily meet legal requirements With ISO 22000:2018 certification, it can replace food safety certification and many other international standards such as GMP, HACCP, etc

Ensures product quality and safety, minimizing the risk of food poisoning, thereby reducing costs associated with defective or poor-quality products

Provides satisfaction for customers by offering quality, safe, and reliable products

Internationally recognized as a reputable supplier, enhancing opportunities for exporting products to international markets

2.2.3 Quality management system according to METRO standards

This standard sets minimum requirements for the handling and commercialization of food for customer consumption, providing them with safe and legal products The quality management system according to METRO standards is a collection of quality management and food safety standards for food service distribution companies within the METRO group framework These standards outline the structures of the quality management system and requirements for developing private label products, supplier quality, customer complaint management, and warehouse storage The content of the quality management system standard according to METRO that the company is developing and implementing includes:

1/ Quality management system a/ Quality Policy: Board of directors must develop a quality policy; The policy must align with the organization's purpose and comply with Metro's Quality Policy; The policy must ensure at least the following commitments: Safety, legality, and quality of products and services; Focus on customers; Continuously improve the effectiveness of the quality management system; The policy needs to be: Reviewed to ensure continuous suitability; Signed and endorsed by senior management; The policy needs to be communicated and understood throughout the organization; The policy must provide a basic framework for establishing and reviewing quality objectives; And most

18 importantly, the quality policy needs to be updated at least once a year (QA ST132, 2023) b/ Document control

Document Control Procedure needs to be established to identify the requirements for control:

Approve documents before release; Review and update documents as necessary and re- approve documents; Ensure that changes and current status of documents are identified; Ensure that the correct version of applicable documents is available at points of use; Ensure documents are easily readable and identifiable; Ensure documents from external sources are identified, updated, and controlled for distribution; Prevent unintended use of outdated documents and ensure they are appropriately identified c/ Resources management

Competence: All employees performing activities affecting product safety and quality must have sufficient competence, qualifications, training, and relevant experience Training: There needs to be a specific procedure to identify individual training needs and measure training effectiveness; The company's Quality Assurance (QA) department must identify quality-related training needs at defined intervals; An annual training plan needs to be developed, including required competencies for each specific role; The training plan must be reviewed annually, and corrective actions implemented if necessary; Training materials need to be reviewed and updated periodically; The effectiveness of training must be evaluated to ensure full understanding before training completion, and if training effectiveness does not meet requirements, corrective measures must be taken (QA ST132, 2023) d/ Analysis, Measurement, Improvement

The contents of Analysis, Measurement, and Improvement include: (QA ST132, 2023): Management of Non-conformities: The company must establish a system to identify and control non-conformities, including procedures for products, services, and related

19 processes For products, this involves isolation, risk assessment, identification, decision on further use, responsibilities, and corrective actions

Management of Customer Complaints: There needs to be a documented procedure for managing customer complaints, including collection, investigation, monitoring, recording, and management of complaints This procedure should assess the severity of complaints and have early warning measures, set response times for serious and minor complaints, corrective/preventive actions, management of received sample products, and handling of customer assets including data Clear responsibilities should be assigned to each department of the process

Corrective, Preventive Actions, and Data Analysis: Corrective and preventive actions should be appropriate to the severity of the complaint; Complaint data will be monitored to identify trends and based on analysis results and related risks, corrective actions will be taken

Management of Incidents, Product Recalls: An emergency and product recall management procedure must be developed, including recall management steps, assignment of responsibilities, contact lists, communication plans, customer monitoring, and final reporting with corrective actions

Internal Assessment: Develop, implement, and maintain a quality internal assessment process; The internal assessment program must include the scope and frequency of audits based on risks; Assessments must be conducted at least twice a year without prior notice; Assessors must have the competence and independence, having the necessary knowledge and skills to conduct quality internal audits; Assessment reports must be communicated to those responsible for the assessed activities and other relevant individuals

Continuous Improvement: Identify, monitor, and periodically analyze KPIs reflecting

QA activities and responsibilities Based on analysis and evaluation results, identify improvement needs or opportunities and plan/implement improvement actions

Quality control by statistical tools

The Pareto chart is named after the Italian economist Vilfredo Pareto and consists of columns representing independent values arranged in descending from left to right, accompanied by a line graph showing cumulative totals

Ta Thi Kieu An, et al (2010) described: "The Pareto chart is designed as columns arranged in descending order, with each column representing an element (which could be an incident or a cause of the incident ) The height of the column reflects the contribution of that element to the whole, based on criteria such as frequency of

24 occurrence, cost incurred from the element, or other outcome-related indices In addition, a cumulative chart line is used to show the cumulative contribution of the elements."

James Freeman (2021) described the Pareto chart as an important tool for classifying issues from most important to less serious, enabling users to prioritize addressing them effectively by allocating resources appropriately Previously, the main purpose of the chart was to identify the primary causes of defects or shortcomings However, today it is primarily used to pinpoint the major causes of significant issues The chart displays the key factors affecting quality along the horizontal axis and shows their occurrence frequency on the left vertical axis, as well as the cumulative percentage represented on the right vertical axis

Steps to develop pareto chart:

1 Define problem and Collect data

Identify the objective of the Pareto chart, which may relate to quality issues, wait times, product defects, and then collect relevant data concerning the identified issues, including the number of occurrences of each issue or their severity level

Classify data by type of problem or cause Sort the data in descending order of frequency or severity

Calculate the total number of occurrences for each issue and calculate the percentage total for each type of issue This percentage will show how much each issue contributes to the total issues

Draw a bar chart with issues arranged in the order determined in Step 2 The horizontal axis (x) represents the types of issues, and the vertical axis (y) represents the quantity or frequency Draw a line representing the cumulative percentage total of the issues, using a second vertical axis

Use the chart to identify the main issues or causes responsible for the majority of problems These issues typically appear on the left side of the chart and represent a large cumulative percentage

Ta Thi Kieu An, et al (2010) describe a cause-and-effect diagram as a tool that supports inference and illustrates the linkage between an effect and the underlying causes, categorized into primary and secondary groups, represented in a fishbone structure

A cause-and-effect diagram is a visual representation of factors leading to a specific problem or outcome It serves as a tool to classify the underlying causes of a problem in detail, thereby identifying specific root causes Typically set up from right to left, with each "rib" representing a factor, smaller branches stemming from the main rib address root causes or contributions Factors in the diagram can include methods, materials, people, environment, and equipment Subsequently, root causes and contributing causes are attached to the ribs Developing this tool benefits quality improvement processes by identifying multiple factors influencing quality, contributing to a specific impact (Picarillo, 2018)

Steps to develop Fishborn diagram:

Ask: "What is the main issue?" Clearly define the specific problem to be analyzed for its causes

Identify the branches of the fishbone, typically corresponding to the 5Ms or 4Ms depending on the actual error

Draw smaller bone lines with smaller causes by exchanging, working

Bước 4: Assess and Prioritize Causes

Prioritize causes based on their impact on the problem

Define necessary solutions to minimize or eliminate the identified causes

Implement actions and monitor progress Ensure that implemented solutions are bringing desired results

The term "Gemba," as per Liker (2004), refers to the "actual place" and is understood within Toyota's production system as the act of going there to observe the actual situation In summary, Gemba walk involves going down to the factory floor where products are manufactured to directly observe the current situation

The significance of the Gemba walk tool is to provide managers with the opportunity to observe and better understand the real situation Through this, managers can quickly and accurately identify specific issues Gemba walk helps check if processes are being executed correctly if workers' operations meet standards, and if machinery is functioning properly Additionally, Gemba walk aids in deep analysis of actual activities taking place in the factory

There are three important factors in Gemba walk: observation, always asking "why," and respecting employees Below are the most basic steps to effectively conduct a Gemba walk:

Planning: Identify the purpose and theme of the visit to focus resources and prepare a set of questions in advance

Monitor workflow: Interact and ask employees in the area to gain a deeper understanding of work processes This way, issues within the process can be detected and addressed

Focus on Processes: The purpose of Gemba walk is to observe and understand, not to evaluate Inform employees of your presence and ask questions to identify areas for improvement

Record Observations: Document observations by taking photos and videos, along with summarizing key points in a notebook

Ask Questions: Compare current work status with established standards and use tools like "5Why" to inquire about daily practices

Regular Gemba Walks: Return to check and see if the issue has been improved Gemba walk is a simple yet effective tool that helps eliminate organizational obstacles related to meeting discussions for problem-solving.

AHP Method

The Analytic Hierarchy Process (AHP) proposed by Saaty (1980) is a widely applied method for evaluating choices and making decisions involving complex criteria, and determining the weights of those criteria

Application of AHP in Supplier Selection: The AHP method is commonly used in deciding supplier selection, focusing on identifying important criteria to choose the best supplier Besides common factors such as price, product quality, delivery time, and flexibility, environmental factors, risks, and logistics need to be considered when assessing suppliers

The steps of the Analytic Hierarchy Process (AHP) are as follows:

Step 1: Conduct interviews with experts to identify the criteria to be evaluated

Step 2: Establish pairwise comparison matrices

Step 3: Perform calculations for the weights of each criterion

Step 4: Calculate the Consistency Ratio (CR) to assess the consistency in experts' decisions

According to Liu Yang, et al (2020), the AHP method provides experts with an overview of the complex relationships inherent in the context and helps them evaluate whether comparable elements are at the same level The elements are then paired for comparison using a 9-level scale to calculate their weights

ANALYSIS OF QUALITY MANAGEMENT SYSTEM AT

Quality Management System

Quality policy has been issued since the early days of the company’s operations There are 2 main commitments: ensuring food safety and service quality to customers Specifically:

✓ The company is committed to complying with current laws and regulations, importing and distributing products with the highest quality, and ensuring food safety

✓ With continuous improvement efforts, the company is committed to focusing on providing the best services to customers, including response time, delivery time, and effective inventory management

At the company, quality policy is being glued at the in-out warehouse door – the key operating area with the aim that it will be widely spread, all the staff must be aware of the content, understand, and commit to keep deploying

In 2023, the Quality assurance department proposed specific objectives to implement strategies and commitments which the board of directors is looking forward to The company’s quality policy in 2023 includes 4 main contents that are highly feasible and measurable, specifically:

Table 3.1 Quality Objectives in 2023 QUALITY OBJECTIVES IN 2023 CLASSIC FINE FOODS COMPANY LIMITED

1 Maintain food safety management system certification for 4 branches (HAN, DAN, NHA, HCM)

2 Achieve a minimum 80% points with the audit program of Metro

4 Enhance supplier’s capability through annual audit and based on risk level to take corrective actions for at least 80% of supplier’s scope

At Classic Fine Foods, document system structure is divided into 3 main types:

Policy: Policies are quality policies and quality objectives of the company that are updated annually according to the business activities and direction of the company

Procedure: Procedures are documents describing the sequence of steps to carry out an activity or process with the requirements or standards for the company's control activities

Guidelines, forms, reports: These are pre-established templates used to record and collect information during the operation of company activities These documents are retained as objective evidence of the company's activity information and data

Need to revise or write new a document

Keep original version & post it on public drive

The document control process within the company is established to determine necessary control purposes:

• Approve new documents before issuance

• Ensure changes and latest versions of documents are identified

• Ensure similar versions of documents are available at points of use

• Ensure the legal compliance of documents

• Prevent unintentional use of outdated documents

• Documents must be presented in bilingual format

All employees working and interacting directly with the product must be trained in relevant programs annually

Trainning by internal Training by external

Yearly training plan: The QA Department must develop a training plan for employees based on the training needs, but it must minimally cover topics such as food safety risk handling, related sanitation procedures, HACCP plans, infection control procedures, and department-specific work guidelines Additionally, depending on the requirements, the

QA department may plan training on workplace sanitation, personal hygiene, waste handling, management of allergens, etc

Training resources: The QA Department can either internally train employees or hire external experts to conduct corresponding training programs Training should be conducted annually for employees working in areas with exposed food and every three years for employees working in product packaging areas

3.1.4 Analyze, measure and improve a Internal audit procedure

Now at the company, the frequency of internal audit is at least once a year, based on the status of previous audit BOD will approve internal audit information proposed by QA department and then, communicate this to relevant department Internal audit procedure is shown below:

Internal Audit Plan: Before conducting the audit, QA will develop an Internal Audit Plan using the Internal Audit Plan template to designate auditors, the department to be audited, activities to be audited, audit timeline, criteria, and submission for BoD’s approval The audit plan will be communicated to auditors for implementation

Approval of Audit Schedule: The specific audit schedule must be approved by the Board of Directors

Set up internal audit schedule

Carry out an outside visit

Issue CAR (if any), implement action

Preparation for Audit: Auditors prepare necessary information for the audit, including collecting procedures and forms from the entity being audited before conducting the audit The audit method depends on the purpose and scope of the audit, and the following methods can be employed:

System audit (such as ISO certification, HACCP certification)

Deficiency point audit (according to GMP & hygiene regulations)

Process performance audit (such as tracing or recall)

Conducting Audit: During the audit process, auditors seek objective evidence to determine whether the activities audited comply with the requirements of the established quality management system documented, the requirements of standards, and the effectiveness of the system Evidence is gathered through observation, interviews, and examination of records QA will organize a closing meeting for all audit teams to finalize the audit results and classify any findings if yes Types of findings are illustrated in the table below:

Table 3.2 Classification of detection points Observation Minor Non-conformity Major Non-conformity

+ Insufficient evidence to conclude it is a major NC

+ Auditor’s proposal related to specific problems

+ Observations from the previous audit

+ Failure to implement a certain requirement of the system

+ Evidence demonstrating that the system is out of control

+ Deviation of a process, procedure, or operation of the company

+ Multiple findings occurring within the same clause or area

Activities after audit: Within 10 days, the audited department must respond to all CAR (Corrective Action Request) forms by analyzing the root causes, proposing corrective measures, and specifying the completion time Minor issues must be rectified within 30 days, and major issues within 7 days QA and the audit team conduct a review of the implementation and effectiveness of corrective measures, recording the review results in the CAR form b Customer complaint management

When receiving customer complaints, all parties must notify the Sales staff Sales staff will contact the customer within 24-48 hours to gather as much information as possible and fill out the Microsoft Forms portal The complaint information may be filled out by Sales staff, Customer Service department, and branch Managers Afterward, these involved parties will assess the seriousness of the customer complaint and report it to the Quality Manager to find a solution Information about customer complaints needs to be forwarded to the quality department within 48 hours Specifically, the customer complaint management procedure is shown below:

Figure 3.6 Customer complaint management procedure

Fill data into MS Forms

Assess severity Inform region QA

The severity of complaints will be divided into two main levels:

+ Complaints that may damage the company's image (through communication activities)

+ Complaints that may cause injury or illness

+ Complaints from government agencies (regarding test results, labels) or related to regulations (containing prohibited substances, )

+ Complaints that may lead to product recalls

Non-serious complaints: Cases do not fall under the serious complaints mentioned above

Products that customer complains may be requested to be returned for investigation and root cause analysis Returned complaint products are stored in a separate area and labeled for identification

For complaints unrelated to product quality such as delivery or packaging issues, the quality department will not be responsible for resolving the issue Still, it will be delegated to the Warehouse and Delivery department for resolution

For complaints related to product quality issues, the quality department will directly handle them by investigating the root cause and implementing corrective measures The root cause investigation will be conducted by contacting the supplier The supplier investigates the root cause of the issue and provides feedback, and the responsibility of the quality department is to approve the feedback and keep records of it

The quality department will respond to customer complaints through the Sales staff The maximum response time for the first response to customers is:

Non-serious complaints: 48 working hours

For the corrective action implementation, if the customer's complaint about product quality is verified by the quality department to be valid, the Sales Director will proceed with exchanging the product for a new one for the customer The quantity of products complained about by the customer will be dealt with by the quality department, which will work with the supplier to negotiate refunds or discounted purchases for future collaborations c Non-conformity product management

WH leader update information to the system

QA investigate and come up with solution

Figure 3.7 Non-conformity product management procedure

In addition to the QA department, warehouse staff are also responsible for inspecting the quality of products in their respective warehouses If any product defects are detected, they must report them to both the QA department and their warehouse leader All defective products must be isolated from the quality-assured products in designated areas, with identifying labels to prevent mix-ups The warehouse leader or supervisor will be responsible for isolating the defective products and reporting the information to the Quality Assurance department, including product codes, quantities, types of defects, and the bin type for transfer, then warehouse leaders will update the quantity and storage location of the isolated products in the warehouse management system

Figure 3.8 Form explaining issues in bin quarantine and bin dent

The isolated products will be transferred to two different bins:

Product management

As an importing and distributing company of food products, Classic Fine Foods recognizes the crucial role and importance of suppliers for their operational efficiency Therefore, the company has a clear supplier audit procedure, outlining the responsibilities and roles of the QA Manager in supplier evaluation Specifically, the company's supplier evaluation process is explained below:

• For suppliers in Viet Nam:

Annually, the QA department conducts planning and audit for potential domestic suppliers who may collaborate in the future and performs reassessment for long-term domestic suppliers who have received numerous customer complaints about product quality in the previous year

QA compiles a list of suppliers for evaluation: Based on data from the previous year's activities, the QA department plans to evaluate domestic suppliers This list includes data from previously audited suppliers, names of suppliers to be audited, addresses, certifications, and risk assessments This list must be updated annually if there are any changes in collaboration status Suppliers to be audited may include:

QAM conducts supplier audit: Depending on the audit requirements, QAM will perform technical assessments directly at the supplier's production facility/warehouse The content of the audit criteria will depend on the company's actual needs for that supplier and will be based on the QAM's experience

QAM conducts supplier quality audit: Based on the actual audit situation and business collaboration opportunities, the QA department will write a report and make decisions on whether to collaborate, continue collaboration, or temporarily suspend collaboration with the supplier based on the department head's experience For suppliers with ongoing collaboration but not meeting all the criteria mentioned above, the QA department will conduct a risk assessment before the products are supplied and ensure remedial measures from the supplier before the company purchases from them

Suspension of collaboration: If a supplier no longer meets the quality assurance and food safety hygiene requirements, the QA department will proceed to suspend collaboration with the supplier and report the results to the BoD and the purchasing department

Continued collaboration and annual reassessment: If the supplier meets all the quality and food safety hygiene requirements, the QA department will report to the BoD and the purchasing department to continue collaboration If the supplier has not fully met the criteria for quality assurance and food safety hygiene or lacks certifications, the QA department will advise the necessary steps for the supplier and set a deadline for them to complete the deficiencies Until all criteria are met, the QA department will report to the BoD and the purchasing department to continue collaboration Annual reassessment will be conducted for suppliers showing signs of declining product quality or other criteria

The QA department cannot directly assess the production facility/warehouse of overseas suppliers Currently, in the company, the Purchasing department is responsible for sending online evaluation forms to overseas suppliers to gather additional information from them The evaluation content includes 6 main criteria:

+ Hygiene conditions during the manufacturing process

+ Conditions for controlling metal, glass, etc

+ Conditions for using preservatives and usage levels

The evaluation of overseas suppliers will depend on the need for additional information from CFF when unexpected incidents occur or when the company observes signs of declining product quality over time The Purchasing department will send evaluation templates, and overseas suppliers will self-assess according to the criteria required by CFF, then the Purchasing department will transfer all information obtained from overseas suppliers to the QA department, where QAM will evaluate and make the final decision

Operational quality management

In order to optimize quality control during operations, Classic Fine Foods consistently establishes criteria that need to be monitored and sets specific requirements for each criterion Responsibilities are allocated to employees in various positions to ensure operations consistently achieve the highest quality Firstly, the company sets requirements for uniforms and handwashing procedures to ensure that employees always follow all necessary steps before entering operational areas

Figure 3.9 Requirements for protective equipment and hand washing procedures

More importantly, to ensure that operations are always carried out with the highest quality, the company sets requirements for 7 key criteria below:

Figure 3.10 Criteria need to be controlled

Controlling the quality of incoming products is a highly essential process at the company to ensure that the products prepared for storage are met the highest quality At Classic Fine Foods, the inspection process for receiving goods is divided into 2 main stages: receiving at the port/airport and receiving goods at the CFF warehouse For the receiving process at the port/airport:

For receiving goods at port/airport procedure:

Figure 3.11 Receiving goods at port/airport procedure

The Logistics department will receive notification from the Purchasing department regarding the time, location, and list of goods to be received They will then arrange for the receiving team to carry out the task and notify the warehouse manager The driver will prepare the vehicle with suitable temperature conditions, ensuring the vehicle is clean for storing goods during transportation from the port/airport to the CFF warehouse The driver will inspect the unloading process onto pallets performed by the port/airport

Inform to WH manager Nok

Ok service and directly check the products based on two criteria: visual inspection and quantity verification during unloading If there is an unusual problem during inspection or transportation to the warehouse, the driver will notify the warehouse manager

For receiving goods at warehouse procedure:

Figure 3.12 Receiving goods at warehouse procedure

For receiving goods at the warehouse, after transporting the goods from the port/airport to the CFF warehouse, the warehouse manager will assign staff to inspect the batch of goods The tasks assigned to warehouse staff for batch inspection:

Put into appropriate storage area Inform to WH manager

Table 3.3 Contents of inspection at the warehousing process

- Check and take pictures of container doors, container numbers, and seal numbers before opening Take pictures of the car after opening

- Check container/truck temperature, and loading area temperature/product surface temperature Take pictures of the tested temperatures

- Check the recorder and press the stop button before checking the goods

- Check the vehicle's cleanliness Do not allow strange odors, insects, or dirt to appear on the vehicle

- Take random photos of pallets, take photos of incident pallets (if any)

- Count the actual number of boxes received with incoming goods information

- Count each actual unit and compare it with the theoretical unit

+ Is the product type correct?

+ Labels (torn, unclear, incorrect information)

+ Packaging (packaging specifications, packaging condition)

+ Goods appearance (broken, dented ) + Product temperature

To maintain product quality, the maximum allowed time for the receiving and inspection process before placing goods into storage is 30 minutes In case of any issues with defective or damaged goods, employees will take photos of all problematic items: record product information, capture the original labels of the goods, then take direct photos of the products and provide feedback to the Quality Assurance department The QAM will review and confirm solutions for these cases There are three commonly applied solutions in the company: returning goods to the supplier, selling at a discounted price, and disposing of the goods

Overall, the goods receiving and inspection process at the company is quite refined The company clearly divides the process into two stages: from the port/airport and before entering the warehouse, with specific steps and criteria to be checked With over 10 years of operation, the process has been reviewed and improved based on data and is well-suited to the currently available resources The warehouse staff have thorough training and demonstrate a high level of dedication and responsibility in their work

For controlling temperature in food storage warehouses, which is an extremely crucial process and even the most important aspect of food quality control, the temperature must always be maintained at the standard level for each different warehouse and for each different food group At Classic Fine Foods, the regulations regarding storage temperature for each warehouse and each food group are shown in the table below:

Describe Frozen Chill Ambient Temporary are

Cheese curds, butter, cakes, frozen fruits

Frozen meat of all kinds: beef, chicken, lamb,

Cold meat products: beef, chicken, pork

Cold cheeses, Cream, Yogurt, Butter, Caviar

Baking powder, cakes, syrup, tea, nuts, dried fruit, cereals, peanut butter, jam, dried mushrooms, canned fish, green tea powder, juice, canned duck, mustard, processed chili…

Noodle products, UHT milk, jam, nut powder, chocolate, baking

Canned and glass bottled water products, vinegar, syrup, honey, olive oil, oil soaked products,

Bread, duck liver, sausage, additives, baking powder, sauce, processed potatoes, turmeric nuts, etc

Temperature checks are conducted twice a day: in the morning between 7:30 and 8:30, and in the afternoon between 13:30 and 14:30 The person responsible for monitoring and recording warehouse temperatures is the warehouse staff All temperature data must be documented in a checklist and undergo verification by the warehouse supervisor If the supervisor observes that the temperature does not meet the standards, an immediate notification is sent to the Warehouse Manager and QAM Additionally, staff must close doors and limit activities in temperature-controlled areas

The company has consistently applied the standard temperature regulations effectively over the years The plans and procedures have been well-suited for monitoring the temperature required for food preservation Throughout the author's working time at the company, no significant issues have been detected in the temperature control process

For warehouse sanitation, the warehouse supervisor will plan cleaning schedules on a weekly, monthly, and yearly basis, and must communicate them to all employees in the warehouse areas The cleaning process is applied to each specific area within the warehouse and must clearly show the requirements:

+ Identify specific areas, tools, and equipment to be cleaned

+ Classify specialized utensils and utensils for cleaning activities

+ Specific responsibilities for each staff

Cleaning activities will be carried out by warehouse staff in rotation and must be recorded in form The QA department is responsible for visually inspecting the cleanliness status of the warehouse, checking the progress of the warehouse cleaning plan, and taking corrective actions if any non-conformity

For the food storage area, cleaning and disinfection activities need to be controlled to maintain hygiene standards at all times Cleaning activities in this area are closely monitored to ensure they do not affect product quality Staff performing cleaning tasks must receive regular training and have a high level of expertise Supervision should be conducted daily, and there should be a sampling schedule to check and measure the effectiveness The sampling frequency is once per year

For waste management, there must be a system of regulations in to ensure that waste is identified, collected, sorted, disposed of, and processed correctly to prevent contamination of food, food storage areas, and packaging materials This includes the following requirements:

+ All legal requirements regarding waste disposal must be complied with

+ In cases where waste removal is outsourced, external third-party contractors must be licensed/authorized by the competent authority

+ Waste must not accumulate and must be stored in designated, marked areas and must not pose a food safety risk

+ Transporting waste to collection points must not pose a risk of contamination

+ Waste collection containers must be marked and in appropriate condition

+ The waste storage area must be kept as clean as possible and not attract the habitation of harmful insects and animals

Overall, the company has comprehensive requirements for each category and area that needs to be cleaned, and who is responsible for it The company does a good job of maintaining sanitation control, and there are no related issues

Evaluate the current status of applying the quality management system

according to Metro standards at the company a) Advantage

Firstly, the company's current quality management system is quite comprehensive, with basic procedures related to warehouse operations and quality control fully established, meeting the minimum requirements of Metro Secondly, the company is always striving for continuous improvement Each year, there is an internal audit program in place Moreover, Metro Group audits the quality management system annually to identify areas for improvement and determine necessary changes to align with the company's

57 operational strategy Thirdly, the Quality Assurance Manager (QAM) is highly experienced in implementing and maintaining the quality management system They have received direct training from Metro, making it easier to build and improve the quality management system b) Disadvantage

Overall, the current quality management system at the company meets the minimum requirements of the Metro Group However, the company is currently focusing only on operational control for efficiency rather than completely addressing issues for thorough improvement Some common defects persist, and there are areas within the quality management system that need attention:

Firstly, the company's quality policy is outdated, having been published only once and not updated despite significant changes in the company's operational direction This fails to meet Metro's requirement for annual updates Additionally, the quality policy has not been widely communicated throughout the company

Secondly, in 2023, the company had four main objectives in place However, the company lacks a process for establishing specific objectives for each relevant member of the department This will make it difficult to implement the objectives and there is no accurate measurement scale for assessing the effectiveness of achieving these four objectives

Thirdly, concerning the customer complaint handling process, the Quality Assurance department is only operating reactively, addressing complaints as they arise and providing compensation accordingly Without continuous improvement efforts and identifying the root causes to thoroughly handle customer complaint issues, the company may incur significant compensation costs, impacting its business operations

Fourthly, concerning the supplier audit evaluation process, the company lacks a consistent audit procedure, and the criteria for assessment have not been clearly defined as essential or not Additionally, the supplier audit process does not have full participation from relevant departments, particularly the Purchasing department, leading to a lack of objectivity in the evaluation process

Fifthly, according to the author, controlling warehouse quality, processes, operations, or products through actual observation is more effective and objective than control through images or videos However, the current Quality Assurance Manager (QAM) only visits the warehouse once every three months This will make improvement efforts less effective because the less frequent the actual observation, the fewer opportunities there are to identify areas for improvement.

SOLUTIONS TO IMPROVE THE EFFICIENCY OF THE

Improve quality policy and quality objectives set procedure

4.1.1 Improve quality policy a) Basis for proposed solution

From author’s perspective, the quality policy must be closely aligned with the company's objectives and core activities, reflecting the company's direction The company's direction is always changing to meet market needs However, the company's quality policy, since its early days, has only been published once and has not been updated despite numerous changes in operational direction Furthermore, the quality policy must be communicated to all members of the organization, explaining its significance and how it applies to daily departmental work, which the company has not done effectively Moreover, to meet Metro's standards regarding the quality policy section, the author proposes updating the quality policy to reflect the direction the company is heading towards b) Solution content

The quality policy must be concise, accurately describing what the organization is aiming for and fitting the organization's context The quality policy provides direction for establishing quality objectives From the contents of the quality policy, objectives

59 will be identified and implemented to ensure that the organization is following the intended direction as outlined in the quality policy

Figure 4.1 Old version quality policy

In Figure 3.2.1, the company's old version of the quality policy dated before August

2023 has not been updated despite the company's new directions and objectives The quality policy, with two main contents, ensures compliance with legal regulations on food safety and hygiene and ensures that the company's services always meet customer needs regarding delivery time, customer care services, etc From the author’s perspective, to align with the organization's new context and direction, BoD and the quality department should meeting and revise a new policy and communicate it widely to everyone

In Figure 3.2.2, the new quality policy has been updated since September 2023 with newly revised contents, clearly demonstrating the quality directions that BoD is aiming for

4.1.2 Improve the procedure of setting quality objectives a) Basis for proposed solution

In 2023, for the company in general and the Quality Management Department in particular, 4 main quality goals can be seen in the table below:

Table 4.1 Control the progress of implementing quality objectives

Maintain food safety management system certification for 4 branches (HAN, DAN, NHA, HCM) In progress

Archive minimum of 80% on Metro's audit program In progress

Improve customer satisfaction to 96% In progress

Enhance Supplier capacity through annual audit and based on risk level take corrective action for at least 80% of Supplier scope

Setting clear quality objectives will help the QA department have clear plans and operational directions However, according to the author, to achieve the four objectives mentioned, the participation of members from other departments is necessary, not just the Quality Assurance department alone If only general objectives are set, it will be challenging to identify specific tasks and objectives for each member to accomplish, and measuring effectiveness in achieving objectives in activities will be difficult The company lacks procedures for setting and monitoring objectives Therefore, the author proposes establishing a process for setting specific objectives for each member of the department

First of all, the author proposes the procedure of setting quality objectives as below:

Figure 4.3 Procedure of setting quality objectives

(Source: Synthesize by the author)

The objectives set must be feasible compared to the company's existing resources, specific, clear, and measurable The author proposes the following template to track the progress of achieving the objectives:

Table 4.2 Table of monitoring quality objectives

Person in charge Deadline Implementation Status

(Source: Synthesize by the author)

Set specific task for each relevant department

Set specific task for each relevant personal

Table 4.3 Example of monitoring objectives

Quality Objectives Archive minimum of 80% in the Metro Audit

Department in charge Person in charge Deadline Implementation Status

Warehouse Mr Vuong Chi Cuong 30/9/2023

Training staff Deploy non- conformity points from the last assessment 50%

(Source: Synthesize by the author)

In addition, the company should establish a reward policy for employees and departments that achieve the set objectives At the end of each year, an evaluation should be conducted, and those who accomplish their objectives should receive corresponding rewards to incentivize their motivation Furthermore, for employees or departments that fail to meet their objectives, the company should devise plans to identify the reasons and propose improvement solutions If an employee or department fails to meet objectives repeatedly despite the implementation of improvement measures, the company should apply disciplinary actions such as department transfer, demotion, or dismissal This approach serves as both motivation for employees and departments to strive and exert effort and as pressure for them to take responsibility for their roles in the company.

The solution applies statistical tools to quality control

Currently, in the customer complaint handling procedure, the QA department is only collaborating with other departments or suppliers to provide solutions when quality

63 issues arise The solutions mainly involve temporary measures such as replacing the product for customers or refunding the product cost, but there are no strategic solutions to address recurring issues due to limited company resources Therefore, the author proposes applying statistical tools to identify frequent defects and determine the root causes of defects in the product storage or transportation process b) Solution content

After synthesizing customer complaints about the number of each type of defect in 2023 until the end of September, the author compiled the following data table:

Table 4.4 Statistical table of defect types

Defect Total number of complaints Total % % Accumulate

(Source: Synthesize by the author)

From the data table above, the author used the Pareto method to determine the defect frequency and obtained the chart below:

Figure 4.4 Pareto chart statistics types of defects

(Source: Author synthesized from Excel)

Based on the statistical results from the Pareto chart, the author identified 5 defects accounting for over 80% of the total defects, including:

Appearance: Products not fresh, meat products damaged, excessive fat, broken eggs, foreign objects inside

Moldy: Product surface with black, white, or green spots Damp moldy smell causing discomfort

Strange smell: Products with foul or different smells compared to the original

Discoloration: Products with altered colors are not consistent with the original color Worms: Moving worms found inside meat products

Among these 5 defects, the author observed that the appearance of the products not meeting quality standards accounts for the highest proportion Therefore, the author proceeded to use an Ishikawa diagram to analyze the causes of this defect in the products

Figure 4.5 Ishikawa diagram lists the root causes

(Source: Analyze by the author)

From the Ishikawa diagram analyzed above, the author identified the root causes that have the most significant impact on causing the appearance-related defect in the product, including:

Man: Carelessness of warehouse staff when picking items for delivery, excessive force leading to products being crushed or damaged Inspection by staff before delivery fails to identify external defects in the products

Method: After picking items, staff tend to temporarily place them on wooden pallets, which poses a risk of contamination from small wood splinters For distant delivery orders, it takes a considerable amount of time, and some types of packaging materials used in the company do not ensure optimal temperature control, leading to a loss of product freshness

Figure 4.6 Wooden pallets temporarily store products

(Source: Synthesize by the author)

To construct a reasonable, reality-aligned, and budget-appropriate solution, the author employs the 5W1H method to identify the comprehensive landscape of the construction and implementation solution For the root causes identified above, the author proposes two main solutions for these issues Firstly, implement a checklist and provide training for warehouse staff before delivery Secondly, replace wooden pallets with plastic pallets in the product storage area and foam boxes with olivo boxes

• Why implement the solution (Why?):

Because the company's resources are limited, the author only focuses on fixing the most frequently occurring defect, which is the product's appearance, and from the identified root causes, the author proposes to implement solutions to completely fix it

• Objective of the solution (What?):

The solution of implementing a checklist to control the factors that need to be checked before delivering goods to customers will help ensure that warehouse staff do not miss any factors during inspection and serve as evidence to track when quality issues occur

As for the solution of changing wooden pallets to plastic pallets and foam boxes to olivo boxes, the goal of the solution is to increase the utilization rate of plastic and olivo boxes to 100% to eliminate the risk of foreign objects in the products and improve the product preservation process during delivery

• How to implement the solution (How? Who? Where? When?)

+ For the solution of applying checklist to check before delivery:

Location: Pre-delivery inspection area

The QA department will be responsible for creating a checklist for inspecting goods, including the controlled factors: product name, quantity, inspection time, delivery order number, list of detected defects Before implementing this solution, the QA department will train for checker on the criteria to be checked and how to conduct inspections (visually, using temperature guns, etc.)

+ For the solution of changing wooden pallets into plastic pallets and foam boxes into olivo boxes:

Implementation Time: Whenever there is a need to store goods and preserve products for delivery

Personnel in Charge: Staff responsible for storing products in the warehouse and staff responsible for packaging to preserve products before delivery

Location: In warehouse storage areas containing pallets and in packaging areas before delivery

The QA department will be responsible for notifying the Warehouse Operations department about the activity of replacing wooden pallets and foam boxes The Warehouse will carry out this replacement and must document work instructions, provide training for staff on how to use them, and outline usage requirements Once a sufficient quantity of plastic pallets and olive boxes is available, all wooden pallets

68 should be completely removed, and foam boxes should be retained as reserves for when olive boxes are insufficient

Evaluate the feasibility of the solution:

Economic Feasibility: The cost per plastic pallet is 585,000 VND Currently, the company has 10 wooden pallets in the storage and labeling area that need replacing, total cost of 5,585,000 VND For Olivo boxes, the cost for a 64-liter box is 2.5 million VND, and for a 32-liter box is 1.5 million VND Currently, the company is using 20 foam boxes of 64 liters and 20 foam boxes of 32 liters If the solution to replace the boxes is implemented, the total cost would be 80 million VND The total cost for both solutions is 85,585,000 VND

Below is a comparison table of compensation costs for customers from January 2023 to the end of August 2023 and the costs reimbursed to the company from the supplier

It can be seen that excluding revenue from reselling returned products to employees, the difference is 101,699,948 VND

Figure 4.7 The gap between the cost of compensation to the customer and the cost received from the supplier

(Source: Synthesize by the author)

FOC for customer Credit note

The gap between the cost of compensation to the customer and the cost received from the supplier

The cost to implement the author's solution is significantly lower than the damages the company has to suffer, which is 16,114,948 VND As of October 15, 2023, the company has implemented the solution of replacing foam boxes for one month The table below compares the number of external defects and the costs the company has to bear across the months:

Figure 4.8 Compare the number of appearance defect and compensation costs from January 2023 to September 2023

(Source: Synthesize by the author)

Based on the table above, it can be seen that the implementation of the solutions to replace the boxes and pallets has had a positive impact on the number of customer complaints and the compensation costs incurred by the company Specifically, in September, since the implementation of this solution, the company only received 1 customer complaint due to external defects, with a compensation cost of 548,327 VND Overall, it is still too early to assess the absolute effectiveness of this solution due to limited data However, this implementation solution is relatively simple and has shown positive signs in the initial stages, so the author highly values the feasibility of this solution.

Solution to develop supplier audit criteria according to the AHP method

Jan Feb March April May June July August Sep

Appearance defect and compensation costs from 1/2023 to 9/2023

Number of issues identify FOC

Firstly, according to the author, supplier audit activities should involve multiple departments, especially the procurement department - the department that directly deals with suppliers Currently, in the company, supplier audit is the only responsibility of the

QA department, leading to a lack of objectivity in the audit process, with opinions coming from only one side without involvement from various members from different departments

Secondly, the criteria for audit have not been validated to determine their impact on the necessity of the audit process or whether they truly reflect the effectiveness of supplier audit, as the criteria being audited by the QA department are based on the QA Manager's experience Moreover, these criteria lack clear weighting factors to facilitate the scoring and evaluation of suppliers b) Solution content

To select the necessary factors and determine appropriate weights for supplier evaluation, the author employs Thomas L Saaty's Analytic Hierarchy Process (AHP) method

Based on real-world conditions, the author conducted interviews with 8 experts: QA Manager - Mr Ha Quang Bao Thinh and members of the Procurement Department Based on this, the author identified 8 criteria for supplier evaluation and ranked the importance of these criteria, including Documentation, Price, Production process, Delivery time, Defective rate, Compensation capability for defects, Supply responsiveness, and Payment policy

Figure 4.9 Criteria may affect on supplier quality

(Source: The author references expert)

The content of the questionnaire revolves around ranking the priority levels of the factors From the synthesized results of the priority levels, the author proceeds to construct pairwise comparison matrices with n=9, as shown in the table below:

Table 4.4 Pairwise comparison matrix of criteria

Documentation Price Production process Delivery time Defective rate Compensation capability Supply responsiveness Payment policy

Sum of each column in the matrix:∑ aij = 2.3 8.3 7.1 26.5 14.0 17.3 24.3 55.0

(Source: Synthesize by the author)

From the pair comparison matrix, the author continues to calculate the weights for each criterion and obtains the results in the table below:

Table 4.5 Summary table of criteria

(Source: Synthesize by the author)

From the table summarizing the weights of the criteria, the author proceeds to check for inconsistency for each criterion using the Consistency Ratio (CR) index, calculated by the formula CR = CI/RI If this index falls within the range of 0.1 to 0.2, it indicates relatively consistent evaluations of the criteria by the interviewees After performing the calculations, the Consistency Ratio (CR) is 0.1367425 Compared to the condition, it can be seen that the consistency of the evaluations by the interviewed experts is acceptable

Based on the application of the AHP method to the calculation results, the author draws the following conclusions:

Regarding the evaluation of the effectiveness and quality of suppliers, the factor that experts are most concerned about is the documentation factor A reliable food supplier must first meet basic requirements regarding documentation, such as business licenses, food safety certificates, ISO certification, Halal certification, microbiological test results, etc Next is the equally important factor of the production process As a food supplier, the production process is crucial, especially in terms of factory hygiene, food preservation methods, measures to control factors directly affecting food safety, etc Next are factors such as price, defective rate, and supply responsiveness - factors that influence the company's business capabilities and reputation in the eyes of customers

The factor of payment policy has an impact but does not significantly affect the experts' choices It can be seen that the application of the AHP method has helped the author build a criteria table regarding the factors to evaluate the effectiveness and quality of suppliers, and has provided an objective approach with the participation of members from various departments, especially those directly involved with suppliers.

Gemba walk

Currently, upon receiving notifications of defective products from the warehouse, due to various subjective and objective reasons, the QAM rarely goes down to the actual site for investigation and assessment, relying mostly on images, videos, and indirect information to resolve issues The QA department should establish a minimum frequency of on-site visits to the warehouse, at least once a week, to observe and understand the issues at hand or seek improvement opportunities b) Solution content

The Quality Assurance department needs to plan before conducting Gemba walks, specifying the content, categories to observe, time, scope, and participants of the Gemba walk The proposed on-site survey plan is as follows:

(Source: Synthesize by the author)

During the Gemba walk, it is essential to continuously observe the processes, activities taking place in the warehouse, the working conditions of the workers, and the condition of machinery and equipment to identify potential risks and areas for improvement Additionally, interacting and exchanging ideas with the workers, those directly involved in the observed area, is crucial as they have the most profound understanding of the area, know the existing issues, and can propose improvement suggestions The author proposes some exchange questions as shown in the table below:

1 Is there any deterioration in the warehouse that needs to be repaired?

2 Does the working procedure cause difficulties, is there any point in the procedure that is unreasonable, causing waste?

3 Is the placement of the devices convenient, is there any waste of movement noticed?

4 Is there any additional training needed to do the job well?

(Source: Synthesize by the author)

After conducting the Gemba walk and evaluating the situation, engaging in discussions with workers directly involved in the surveyed area to gather opinions and information, along with subjective self-assessment, QAM should proceed to write a report on the production site:

Table 4.7 Gemba report Point Observed Are Corrective action Photo

1 Water remains on the floor, unsafe for employees and risky for products

Ambient - Report to the warehouse, plan with the warehouse and maintenance to carry out repairs

Point Observed Are Corrective action Photo

2 The paper cutter is rusty, risk affecting the product

- Plan with the Purchasing department to make another knife purchase

3 The hand forklift was greasy, not cleaned, and the paint was old

WH - Report to warehouse manager

- Plan maintenance and new paint for hand forklifts

(Source: Synthesize by the author)

After making the report, the QAM will plan to notify relevant responsible departments and monitor the progress of the work:

Point Corrective action PIC Deadline Status

1 - Transfer information to maintenance department

- Report to the warehouse, plan with the warehouse and maintenance to carry out repairs

- Plan with the Purchasing department to make another knife purchase

Point Corrective action PIC Deadline Status

3 - Report to warehouse manager and maintenance department

- Plan maintenance and new paint for hand forklifts

(Source: Synthesize by the author) c) Benefit of the solution

Conducting Gemba walks provides managers, especially the head of the Quality Assurance department, with the opportunity to observe and understand the actual situation in the warehouse From there, valuable information can be gathered, such as identifying areas that need improvement and areas for enhancement If implemented according to the true definition of Gemba, managers will also gain a deeper understanding of their employees, understanding both their advantages and challenges they face This understanding enables managers to propose appropriate improvement solutions, enhancing the morale of employees and fostering trust between employees and their managers

The quality management system at the company is already quite comprehensive in terms of the number of required procedures However, during daily operations, there are still some procedures that are not fully optimized and present opportunities for improvement to enhance the effectiveness of product quality management The Quality Assurance department may consider allocating additional resources to implement improvements to further refine and strengthen the quality management system

The author conducted the research based on the company's existing data (documents, procedures, data, etc.) and combined it with various statistical methods and tools researched by different authors to accurately identify existing issues and propose feasible solutions to enhance operational quality and contribute to the overall improvement of the company's quality system

Overall, the company's quality objectives have been and are being implemented well, and the evaluation indicators of third-party units regarding the company's quality management system are consistently at an acceptable level However, in the author's opinion, there is still room for improvement for the company and the Quality Assurance department to perform even better Ultimately, the author hopes that with these proposals, the company's quality management system will continue to improve and deliver the highest quality products/services to its customers

1) Công ty Trách nhiệm hữu hạn Thực phẩm Ngon Cổ điển (Truy cập tại: classicfinefoods.vn)

2) Ái Lê (02/12/2018) Gemba – Công cụ Lean hữu ích (Truy cập tại: https://vietquality.vn/gemba-cong-cu-lean-huu-ich/)

3) Hồ Thị Thuỳ Dương (2017) Hoàn thiện hệ thống quản lý chất lượng theo tiêu chuẩn ISO/TS 16949:2009 Khoá luận tốt nghiệp, Đại học Sư phạm Kỹ thuật

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5) Tạ Thị Kiều An, Ngô Thị Ánh, Nguyễn Thị Ngọc Diệp, Nguyễn Văn Hóa, Nguyễn Hoàng Kiệt, & Đinh Phượng Vinh (2010) Giáo trình Quản lý chất lượng Hồ Chí Minh: NXB Thống Kê

6) Ngô Phúc Hạnh, (2011) Giáo trình Quản lý chất lượng NXB: Tài chính

7) Phạm Huy Tuân & Nguyễn Phi Trung (2016) Giáo trình Quản trị sản xuất và chất lượng TP Hồ Chí Minh: NXB Đại học Quốc gia TP Hồ Chí Minh

8) Đặng Ngọc Sự & Nguyễn Đình Phan (2017) Quản trị chất lượng Hà Nội: NXB Đại học Kinh tế Quốc dân

9) Tiêu chuẩn quốc gia TCVN ISO 9000:2015 về Hệ thống quản lý chất lượng – Cơ sở và từ vựng.(2015) Truy cập tại: Tiêu chuẩn quốc gia TCVN ISO 9000:2015 (ISO 9000:2015) về Hệ thống quản lý chất lượng - Cơ sở và từ vựng

10) Tiêu chuẩn ISO 22000:2018 – Hệ thống an toàn thực phẩm (Truy cập tại: Tiêu chuẩn ISO 22000:2018 - Hệ thống an toàn thực phẩm (vnce.vn))

11) Tài liệu nội bộ (2023) Quality standard for FSD company, công ty Trách nhiệm hữu hạn Thực phẩm ngon cổ điển

1) Philip B Crosby (1979) Quality Is Free New York: McGraw – Hill Book

2) A.V Feigenbaumn (1983) Total Quality Control, third edition

3) Kaoru Ishikawa, et al (1985) What is Total Quality Control? The Japanese Way 4) Juran, et al (1998) Quality control handbook, manuals, etc., 98-43311

5) Liu Yang et al (2020) A review of fuzzy AHP methods for decision-making with subjective judgments

6) Saaty T.L (1995), "Decisions Making for Leaders: The Analytic Hierarchy Process for Decisions in a Complex World"

7) ASQ (1946) What is quality management system (QMS)? Retrieved March 20,

2024, from: https://asq.org/quality-resources/quality-management-system

8) FAO organization (1945) What is quality? Retrieved March 20, 2024, from: https://www.fao.org/4/w7295e/w7295e03.htm