Scope of Space: The report focuses on the process of delivering LCL garment products exported by sea at The Blues One Member Company Limited, especially within the Export-Import Department of the company. Scope of Time: The report concentrates on data collected between 2021 and 2023 at The Blues One Member Company Limited. Scope of Content: The report is limited to the business operations of The Blues One Member Company Limited, emphasizing the procedures related to garment products delivery exported by sea, along with proposing improvement solutions.
THEORETICAL FOUNDATION
Overview of export activities
Exporting goods, as outlined in Article 28 of the 2005 Commercial Law, refers to transporting goods outside Vietnam's borders or to designated special customs zones within the country This process facilitates international trade, allowing domestically produced products to be sold abroad, thereby generating foreign currency and fostering local production growth Ultimately, this transformation of the economic structure aims to enhance the standard of living for the population Exports involve the exchange of both tangible and intangible goods, expanding production and beneficial trade beyond national borders into international markets and domestic export zones.
Export is vital for boosting national income, enhancing livelihoods, and fostering economic growth In the first quarter of 2024, Vietnam's trade surplus in goods and services contributed 19.16% to the country's GDP, highlighting the importance of export growth Additionally, Vietnam's export turnover reached an impressive USD 34.01 billion in March, marking a significant increase in international trade.
2024, and is projected to reach USD 93.06 billion in the first quarter of 2024, creating new opportunities and boosting economic growth (Tho, 2024)
Exporting plays a crucial role in boosting national income and generating numerous job opportunities As of September 2023, approximately 12.5 million Vietnamese workers, representing around 30% of the total workforce, are engaged in export-related activities (Nguyen, 2023) These statistics highlight the significant impact of exports on the Vietnamese economy.
5 substantial employment opportunities generated by the export sector, highlighting its pivotal role in providing livelihoods for a significant portion of the population
Exporting is vital for economic restructuring, enabling domestic enterprises to access international markets and drive technological innovation and competitiveness The processing and manufacturing sector's export value share has surged from 53.6% in 2010 to 88.1% in early 2024, highlighting Vietnam's shift towards industrialization and modernization.
Exporting is crucial for Vietnam's integration into the global economy, as the country has engaged in numerous free trade agreements that facilitate access to major international markets Since 2000, Vietnam's export turnover has surged twenty-fold, reflecting significant growth and diversification in its export markets across various countries and regions worldwide.
Direct export is a straightforward transaction where sellers and buyers negotiate terms and obligations directly, adhering to their respective countries' laws This method allows exporting companies to independently conduct market research, choose products, negotiate contracts, and manage all export tasks While it offers the potential for higher profits and helps build an international reputation, it also demands significant investment and carries inherent risks.
Indirect export involves a partnership where a domestic company, lacking the resources or expertise for international trade, collaborates with a specialized foreign trade entity This arrangement allows the domestic company to delegate its export responsibilities to the foreign trade representative, facilitating access to global markets.
Negotiating with foreign buyers, signing contracts, and completing export procedures are crucial steps for domestic companies, referred to as principals These companies compensate foreign trade entities with a commission fee outlined in the outsourcing contract While this arrangement can lower risks and transportation costs, it also requires businesses to share a portion of their profits with intermediaries, as stipulated in Commercial Law (2005).
On-site export refers to the production of goods intended for foreign traders, with delivery occurring within Vietnam to a designated unit chosen by the foreign buyer This method allows exported goods to remain in Vietnam while still being available for foreign customers to purchase and use On-site export is increasingly popular as it helps lower transportation and procedural costs, streamlining the transaction process (Ministry of Finance, 2015).
Temporary import for re-export
Temporary import for re-export in Vietnam allows traders to import goods temporarily without domestic consumption, with the intention of re-exporting them to a third country for profit This process requires two distinct contracts: one with the foreign supplier for purchasing the goods and another with the foreign buyer for selling them It is crucial to differentiate this method from direct export, as the goods are not meant for local use but are instead in transit through Vietnam to their ultimate destination (Commercial Law, 2005).
Contract manufacturing, as defined in Article 178 of the 2005 Commercial Law, is a business practice where the service recipient uses some or all of the materials and resources supplied by the contracting entity to execute certain production stages These stages are conducted according to the specifications set by the contracting party in exchange for payment for the services provided.
Overview of Less than container load (LCL)
According to Nguyen et al (2003), LCL refers to shipments that are not enough to fill a whole container or are relatively large but involve multiple senders or recipients
LCL shipping, or Less than Container Load shipping, involves cargo consolidators, such as carriers or freight forwarders, who manage the loading and unloading of goods into containers This shipping method is ideal for shippers with volumes that do not fill an entire container, allowing them to combine smaller shipments to maximize container space and minimize shipping costs, unlike Full Container Load (FCL) shipments where one shipper occupies the whole container.
LCL shipments provide significant advantages for businesses and individuals, primarily through cost efficiency, as shippers only pay for the space they utilize in the container, making it a budget-friendly choice for smaller loads This shipping method also offers flexibility, allowing companies to send smaller quantities without the need to wait for a full container Furthermore, LCL reduces sourcing risks by enabling smaller initial orders from multiple suppliers without the obligation of large commitments Finally, LCL shipments often lead to faster delivery times, as they allow for quicker dispatch and transport compared to full container loads.
LCL shipments, while beneficial, have notable drawbacks, including an increased risk of damage to goods from consolidation, which can lead to contamination and spillage Additionally, the per-unit costs for LCL shipments are generally higher than FCL shipments due to the complexities of logistics and management involved Transit times for LCL shipments can also be longer, attributed to the deconsolidation process at Container Freight Station (CFS) warehouses and the coordination of multiple shipments Furthermore, managing inventory for LCL shipments can be more challenging.
8 be more complex due to the smaller volumes of goods and the need to coordinate arrivals from multiple suppliers.
Overview of process
The International Organization for Standardization (ISO) defines a process as a series of interconnected activities aimed at achieving a specific objective Each process involves at least one input and can produce one or more outputs, often incorporating activities that convert inputs into outputs.
Business processes consist of a series of interconnected events, activities, and decision points that engage various participants, including organizations, software systems, and individuals such as suppliers, employees, and customers These processes also involve multiple objects, such as products, materials, and documents, with the ultimate goal of delivering a valuable outcome to at least one customer (Dumas et al., 2013).
According to Dumas et al (2013), it suggests that the process always includes the following ingredients:
Figure 1-1: Ingredients of a business processes Source: Fundamentals of Business Process Management (Dumas et al., 2013)
Business process consists of events, activities and decision points:
- Events correspond to things that happen atomically, meaning that they have no duration This event may trigger the execution of a series of activities
- Activities are tasks that involve multiple steps
- Decision points are moments when a decision is made that influences how the process is carried out
A process involves a number of actors and objects:
- Actors encompass human actors, organizations, or software systems acting on behalf of human actors or organizations
- Objects are divided into physical objects such as equipment, materials, products, paper documents, and immaterial objects like electronic documents and electronic records
The execution of a process yields outcomes that ideally benefit all parties involved; however, sometimes this value is not fully realized, leading to negative results The customer plays a crucial role in this process, as they are the ones who evaluate the value of the outcome and share their feedback In many cases, multiple customers are involved, including both buyers and sellers, while other participants contribute various services.
1.3.3 The evaluation criteria of process
Key performance indicators (KPIs) can be derived from four essential performance dimensions: time, cost, quality, and flexibility, as outlined by Ishaq Bhatti et al (2014) These process performance measures are crucial for evaluating and enhancing organizational efficiency.
Time is recognized as a crucial factor in gaining competitive advantage and serves as a key metric for assessing manufacturing performance It frequently emerges as the primary aspect to consider when evaluating processes.
10 performance measure for processes is cycle time (also called throughput time) Cycle time is the time that it takes to handle one case from start to end
Process selection is often driven by the ambition to reduce cycle time, and there are many different ways of further specifying this aim
Other aspects of the time dimension come into view when considering the components of cycle time, namely:
Processing time, often referred to as service time, is the length of time that resources, including process participants or software applications involved in the process, are actively engaged in managing a case.
The waiting time refers to the duration a case remains inactive, incorporating both queueing time—when resources are unavailable—and additional delays caused by synchronization needs with other processes, as well as waiting for input from customers or external parties.
Another common performance dimension when analyzing and redesigning a business process has a financial nature and process redesign is more often associated with reducing cost
There are different perspectives on cost In the first place, it is possible to distinguish between fixed and variable costs:
Fixed costs are overhead expenses that remain largely unchanged regardless of processing intensity These costs typically arise from the utilization of infrastructure and the maintenance of software systems.
- Variable costs are positively correlated with some variable quantity, such as the level of sales, the number of purchased goods, the number of new hires, etc
Operational costs are closely tied to productivity and can be directly linked to a business process's outputs A significant portion of these costs typically consists of labor expenses, highlighting the importance of managing these costs effectively for overall efficiency.
11 related to human resources in producing a good or delivering a service Within process redesign efforts, it is very common to focus on reducing operation costs, particularly labor costs
The quality of a business process can be viewed from at least two different angles: from the client's side (external) and from the process participant's perspective (internal)
External quality is gauged by client satisfaction with both the product and the process Satisfaction with the product reflects how well the delivered item meets the client's specifications and expectations.
Client satisfaction is closely tied to the execution of processes, particularly regarding the quantity, relevance, quality, and timeliness of information provided throughout the progress.
The internal quality of a business process is influenced by the perspectives of its participants Key aspects of internal quality include the degree of control participants feel over their tasks, the amount of variation they encounter, and the perceived challenges associated with working within the business process.
This performance dimension can be defined in general terms as the ability to react to changes These changes may concern various parts of the business process, for example:
- The ability of resources to execute different tasks within a business process setting
- The ability of a business process as a whole to handle various cases and changing workloads
- The ability of the management to change the structure and allocation rules
- The organization's ability to change the structure and responsiveness of the business process to the wishes of the market and business partners
The process of delivering LCL goods exported by sea
The delivery process is crucial in the export of LCL goods via sea freight, involving various tasks from the shipper to the consignee This report focuses on the booking step and highlights the importance of efficiently executing the LCL delivery process to ensure smooth and secure export operations Understanding and effectively carrying out the steps in this delivery process creates favorable conditions for the subsequent stages of exporting goods.
Effective cargo transportation by sea relies on a structured delivery process, which minimizes risks and creates favorable conditions for exporters and importers alike The following outlines the steps involved in delivering LCL (Less than Container Load) products through maritime export.
Figure 1-2: Process of delivering LCL goods exported by sea
The sea export delivery process consists of interconnected steps that begin with booking shipments and culminate in notifying the importer of the completed shipment Each stage is essential for ensuring a smooth and efficient export operation.
Step 1: Arrange booking with the carrier
1 Arrange booking with the carrier
2 Pack and transport goods to the Container Freight Station (CFS)
5 Send documents to the importer
Booking, or reservation, is the initial step in the delivery process following the signing of a sales contract The party responsible for freight payment is determined by the incoterms (such as EXW, FOB, CIF), whether it be the shipper or consignee The exporter sets the expected shipment time to inform both the forwarder and consignee If the seller acts as the charterer, they must reach out to forwarding companies to find the most cost-effective option Upon receiving the booking note from the forwarder, the exporting company must meticulously verify details including the departure and destination ports, sender's name, goods description, quantity, warehouse location, and estimated departure and closing times.
Step 2: Pack and transport goods to the Container Freight Station
Upon receiving the booking note, the exporting company promptly organizes the production and packaging of goods, ensuring they are ready at least one week prior to the vessel's departure This advance preparation allows for the resolution of any potential issues For LCL shipments, goods are packaged directly at the factory and labeled with shipping marks as per the importer's specifications.
Transporting goods to the consolidation warehouse is a crucial step in the LCL export delivery process After packaging, the shipper coordinates with transportation providers to ensure secure and timely transit to the designated warehouse, requiring careful planning to meet the booking note's location and timeline Depending on logistical needs, the shipper may choose to work with a forwarder or use internal resources for transportation Upon arrival at the consolidation warehouse, the goods are sorted and prepared for consolidation with other shipments.
Step 3: Conduct export customs procedures
Submitting an electronic customs declaration is a crucial stage in the export procedure This entails utilizing the electronic customs declaration software known as
To submit a declaration to customs authorities using "ECUS5 - VNACCS," employees must first gather all essential documents, including the contract, commercial invoice, packing list, booking note, and any other required paperwork.
After submitting the electronic customs declaration The system randomly sorts the flow:
Most export shipments are designated for the green channel, which typically applies to goods that meet export criteria, excluding restricted items or those under strict management The allocation to the green channel is random, ensuring that compliant goods benefit from a streamlined export process.
- Yellow channel declaration: Customs will request the exporter to present the export documents for verification, including (Booking Note, Purchase Order, Packing List, Invoice, Customs Declaration Form, etc,)
When a red channel declaration is made, the exporter's goods are sent to the inspection and customs control area for evaluation to ensure compliance with export criteria The inspection of goods is conducted randomly, which can lead to delays in the shipping process Therefore, exporters should account for potential inspection times to ensure they meet their shipment deadlines effectively.
Once the goods reach the port and clear customs, the shipper must send the Shipping Instruction (SI) to the shipping company before the Cut-off Time It’s essential for the shipper to confirm with the forwarder that the SI has been received by the deadline The carrier will then issue a draft Bill of Lading (B/L) based on this information The shipper should meticulously review the draft B/L and promptly coordinate with the shipping company for any necessary additions or corrections.
When completing an export shipment, preparing essential documents like the Certificate of Origin (C/O) and Marine Insurance Policy is crucial for efficient processing The Certificate of Origin is vital as it officially confirms the origin of the exported goods Additionally, the timing of its preparation is critical; it should ideally be completed within one day after the vessel's departure to match the actual sailing date This promptness ensures the accuracy of information, especially concerning the sailing date on the Bill of Lading, as any discrepancies can lead to complications.
15 the C/O information, differing from the sailing date specified on the Bill of Lading, could pose significant challenges for the consignee in utilizing the C/O effectively
Step 5: Send documents to the importer
The exporting company will notify the consignee upon the successful completion of the shipment and will directly send all necessary documents, including the Invoice, Packing List, Bill of Lading, and Certificate of Origin This essential paperwork enables the importer to efficiently initiate customs clearance and meet regulatory requirements, thus streamlining the overall import process.
Required documents used in the process of delivering LCL goods exported
According to Article 3, Clause 8 of the Vietnam Commercial Law 2005, a sales contract is a bilateral agreement where the seller is obligated to deliver goods and transfer ownership to the buyer in exchange for payment Concurrently, the buyer is responsible for making payment, accepting delivery, and acquiring ownership as per the agreed terms This provision highlights the mutual obligations and responsibilities in sales transactions, emphasizing the necessity of mutual consent and adherence to terms for the effective execution of commercial dealings under Vietnamese law.
The Commercial Invoice, as defined in Article 3 of Decree No 119/2018/ND-
A Commercial Invoice is a crucial accounting document used by businesses and individuals involved in selling goods or providing services It records essential details of the transaction, confirming payment between the seller and buyer Additionally, this document is vital for customs clearance in both exports and imports, as it serves as the foundation for calculating various fees associated with the transaction.
A Packing List serves as a comprehensive inventory of goods specified in the contract, closely resembling an invoice but excluding payment details, unit prices, and currency Issued by the seller to the buyer after fulfilling delivery obligations, it enables the buyer to verify the actual quantity of goods received (Nguyen et al., 2003).
The Bill of Lading is a crucial legal document provided by a carrier to the shipper, detailing vital information about the shipment such as the type of goods, quantity, origin, and destination For Less than Container Load (LCL) shipments, a House Bill of Lading is issued by a freight forwarder or carrier, which is signed and delivered to the shipper, also referred to as the consignor or cargo owner.
The House Bill of Lading is a crucial document that governs the transportation of goods based on the sales contract between the buyer and seller It is issued after the shipper packs and delivers the goods to the freight forwarder, completes export customs procedures, and pays necessary fees This document includes vital information, such as the shipper and consignee details, a description of the goods, their quantity, weight, and destination.
A Booking Note is a vital agreement between the vessel charterer and the charter provider, outlining the loading arrangements onto the ship By signing this document, the shipowner or carrier commits to offering the shipper the designated cargo space in the hold or the specified number of containers as indicated by the cargo owner (Ngo, 2017).
A customs declaration is a mandatory document that must be completed by the owner of goods or the operator of a vehicle before crossing national borders, as required by international conventions and Vietnamese law This declaration is essential for vehicles entering or leaving national border checkpoints, and any violations, including failure to declare or inaccurate declarations, may lead to legal actions by customs authorities in accordance with current legislation.
Shipping Instructions (SI) are essential documents provided by the shipper to the carrier after booking freight services They detail crucial information, including the quantity and names of goods being shipped, the mode of transport, the preferred type of Bill of Lading, and any additional requirements for the Bill of Lading.
A certificate of origin is a crucial document that specifies the manufacturing location of goods and is issued by the exporter, who completes and signs it, with authentication from the relevant authority in the exporting country This document plays a vital role for customs authorities in assessing tariff preferences based on the importing country's policies and is also important for managing quota regimes Furthermore, it can indicate the quality of goods, as local characteristics and production conditions significantly impact product quality (Nguyen, 2017).
OVERVIEW OF THE BLUES ONE MEMBER COMPANY
Introduction of The Blues One Member Company Limited
Figure 2-1: Logo of The Blues One Member Company Limited
Source: https://thebluesonline.com.vn/ (2024)
Company name: The Blues One Member Company Limited
Address: Road No.2, Hoa Khanh Industrial Zone, Hoa Khanh Bac Ward, Lien Chieu District, Da Nang City, Vietnam
Head office: 84 Le Duan, Hai Chau District, Danang City
Business area: Manufacturing ready-made garments Purchasing and selling fabrics, raw materials for the garment industry
Website: https://thebluesonline.com.vn/
Type of business: Private limited companies
Managed by: Danang Tax Department
The Blues One Member Company Limited, founded in 2017 in Da Nang City, Vietnam, emerged as a spin-off from Quang Nam Blue Way One Member Company Limited, building on the latter's successful track record in the garment industry.
2009, The Blues was formed with the aim of continuing the spirit of creativity and
19 commitment to quality The company decided to spin off to facilitate innovative and dynamic development while inheriting all obligations and assets from its parent company
The Blues specializes in garment manufacturing, producing a wide range of apparel including jeans, jackets, polo shirts, sportswear, and trousers for both domestic and export markets Their competitive pricing has fostered trust among buyers, enabling rapid growth in both local and international sales.
The Blues is a manufacturing facility dedicated to producing garments under its own brands, The Blues and Blue Exchange In addition to its manufacturing efforts, the company has successfully expanded its market overseas, particularly in neighboring countries Leveraging Vietnam's deep integration into regional and global economies, as well as international trade agreements like the CPTPP and CEPT, The Blues has seized opportunities to grow its export market, reaching countries including Hong Kong, China, Thailand, Singapore, Canada, Sweden, and the United States.
In 2022, The Blues enhanced its manufacturing capabilities by opening a new branch in Quang Ngai, a pivotal development that reflects the company's growth in human resources and business scale Guided by Mr Lam Quang Thai and his committed team, The Blues has established itself as a prominent and reputable garment manufacturer in Vietnam.
The Blues stands out as a leading garment manufacturer in Vietnam, embodying innovation and growth within the industry With a clear vision and unwavering commitment, the company has established itself as a trusted partner in both local and global markets.
Main business sectors
The Blues primarily focuses on the manufacturing and trading of garment products, excluding fur clothing Their core business involves organizing the production and distribution of various garments made from fabric, wool, fiber, and other materials The company offers a diverse range of products, including daily wear, office attire, and sportswear, to meet customer needs Specializing in items like jeans, jackets, polo shirts, t-shirts, and sportswear, The Blues caters to a wide market audience.
The Blues excels in catering to both domestic and export markets by importing and exporting garment products and raw materials essential for production and machining With a strong emphasis on quality and innovation, the company offers a diverse array of garment products that adapt to changing consumer preferences, ensuring a competitive edge in the ever-evolving garment industry.
The Blues has diversified its business activities beyond garment production and trading, expanding into sectors such as supermarkets, tourism, hotels, cargo transportation, real estate, construction, clean water exploitation, solar power production, and retail By leveraging its expertise, the company strategically enhances its competitiveness and market presence while maintaining its core focus on garment manufacturing.
Organizational structure and functions of departments
The Blues One Member Company Limited features a hierarchical organizational structure with various departments, each designated to enhance the company's overall operations At the helm is Director Mr Lam Quang Thai, who brings over 20 years of industry experience and is instrumental in guiding the company's strategic direction and development Key departments within the organization play vital roles in supporting its mission and objectives.
Figure 2-2: Organizational structure of The Blues One Member Company
Limited Source: Human Resources Department (2024)
The Director of The Blues holds a crucial position within the organization's structure, overseeing management and guiding strategic development Key responsibilities include establishing long-term business goals that align with the company's vision and core values, as well as making strategic decisions to drive success and growth Ultimately, the Director is accountable for the company's overall performance and operational results.
The Deputy Director is essential to the management team, assisting the Director in overseeing company operations and ensuring compliance with legal frameworks that align with the organization's values By analyzing financial data, she strategizes improvements to optimize business performance Additionally, she actively builds and maintains partnerships with clients and stakeholders, contributing to the company's growth and expanding its network.
The Technical Department at The Blues plays a crucial role in maintaining high-quality product development and efficient production processes By conducting in-depth research, it designs products that align with customer preferences and market needs This department optimizes production performance and product quality through effective oversight of technological processes and collaboration with other departments to set material consumption standards Additionally, it manages product quality inspections, equipment maintenance and repair, while also proposing enhancements to improve overall performance and quality.
The Sales Department conducts market research and analysis to identify opportunities and trends, playing a crucial role in developing sales forecasts and revenue goals By coordinating with other departments within The Blues, the team ensures that business strategies align with the company's objectives This collaboration fosters a comprehensive and effective plan that not only capitalizes on opportunities but also supports the company's revenue targets and sustainable development goals.
The Quality Assurance Department plays a crucial role in planning and organizing quality inspections throughout production units, ensuring compliance with established quality standards from cutting to finished products They work closely with Technical and Business Planning departments to resolve quality-related issues and implement corrective actions Additionally, they manage customer complaints about product quality, providing appropriate solutions Their responsibilities also include synthesizing, analyzing, and reporting monthly quality inspection statuses to the board of directors, supporting informed decision-making in line with the company's goals.
The Import-Export Department oversees all aspects of import and export operations, including documentation, shipping logistics, and customs clearance They collaborate with essential partners like shipping lines, agents, forwarders, and buyers to coordinate transportation efficiently Their responsibilities encompass preparing and verifying documents to ensure regulatory compliance and completing necessary import and export procedures.
At The Blues, monitoring the transportation of goods from the warehouse to their final destination is essential This role involves addressing document errors and collaborating with various departments to resolve issues effectively Furthermore, they ensure compliance by storing and managing documents according to regulations, which promotes transparency and completeness in the process.
The Human Resources Department at The Blues One Member Company Limited is essential for effective company operations, focusing on recruiting, training, and managing staff They develop and implement HR policies to ensure compliance and promote a positive work environment Additionally, the department addresses employee relations and dispute resolution while managing payroll, benefits, and other critical HR functions to ensure fair compensation and support for employees.
The Accounting Department oversees essential financial tasks such as invoicing, billing, and financial reporting, while diligently tracking and reconciling company expenses and revenues They collaborate with other departments on financial issues and prepare comprehensive financial statements and reports for management's review.
The Blues manufacturing plant focuses on producing high-quality garments that adhere to the company's specifications and standards while ensuring efficient manufacturing processes It emphasizes creating a safe and healthy work environment for all employees and implements effective production schedules and targets to meet customer demand.
Business resources
The Blues, located at 2nd Street in the Hoa Khanh Industrial Zone of Da Nang, boasts modern facilities and equipment to enhance its manufacturing and business operations The office provides a fully equipped workspace for employees across various departments, featuring meeting rooms and dedicated workspaces Additionally, the company's factory, also situated at this address, serves as the primary production site with advanced machinery for efficient manufacturing With two main factories on-site, the company ensures streamlined management and operational efficiency.
Office equipment, including computers, printers, photocopiers, and scanners, plays a crucial role in supporting employee tasks Additionally, essential office amenities like furniture and air conditioning contribute to a comfortable and productive work environment.
Furthermore, the company owns a business premises at 84 Le Duan, Da Nang, which serves not only as a trading office but also as a point of sale for The Blues products
To support transportation activities, the company currently owns several transport vehicles, including three light trucks and two medium trucks, ensuring convenient and efficient transportation of goods
The number of employees working at The Blues One Member Company Limited is as follows:
Table 2-1: Human Resource Statistics at The Blues One Member Company
The workforce exhibits a significant gender imbalance, with females constituting 73.99% and males only 26.01%, highlighting a strong female presence in the company This disparity may stem from the demands of The Blues' operations, which require precision, meticulousness, and high accuracy in garment manufacturing.
The Blues employs a predominantly unskilled workforce, with 86.61% of its employees lacking formal education, while only 5.29% hold college or university degrees This indicates that the company's roles primarily demand a large labor force rather than advanced educational qualifications, focusing on efficient production processes.
Approximately 92% of The Blues' workforce is dedicated to direct production, highlighting the company's emphasis on its core manufacturing processes A smaller segment of employees works in support roles, contributing to the overall efficiency of the organization.
26 accounting, human resources management, and other departments not directly related to the production process.
Situation and results of the company's business activities
2.5.1 Results of the company's business activities
From 2021 to 2023, The Blues experienced notable fluctuations in business indicators, with revenue consistently increasing despite variable profit levels that included both declines and sharp rises Total expenses also rose significantly during this period The revenue growth was largely driven by the economic recovery post-COVID-19 and internal restructuring efforts, while the cost of goods sold surged due to escalating raw material and transportation costs.
Table 2-2: Business Performance Results of the Company for the Period 2021 – 2023
Unit: Billion Vietnamese Dong (VND)
In 2021, The Blues experienced a revenue decline to 265.803 billion VND, marking the lowest point between 2021 and 2023 This downturn was largely attributed to the significant global and domestic economic challenges brought on by the COVID-19 pandemic, which adversely affected not only Vietnam's economy but also numerous businesses across various sectors.
Despite facing significant challenges, the company successfully met its obligations during this period, avoiding financial losses from economic downturns and achieving a remarkable profit of 2.52 billion VND.
In 2022, the company reported a revenue of 344.257 billion VND, marking a 30% increase from 2021; however, profits fell to 2.038 billion VND, resulting in a profit margin decrease to 0.59% This decline in profitability was primarily driven by a substantial rise in the cost of goods sold, influenced by escalating raw material prices, increased transportation costs, and other expenses stemming from the broader economic climate.
In 2023, The Blues achieved impressive profit growth, reaching 7.216 billion VND and a profit margin of 1.83%, reflecting a significant enhancement in business operations This represents a remarkable 253.07% increase from the previous year, the highest growth rate between 2021 and 2023 The surge in profit can be attributed to the company's strategic focus on enhancing business activities amid a stabilized economic environment Key developments included the completion of a warehouse and product showroom at Hoa Khanh Industrial Zone, as well as attracting foreign partners through factory visits and improvements in employee welfare and the working environment.
2.5.2 Export situation of the company's garment products
Table 2-3: Export Revenue of Garments from 2021 – 2023
From 2021 to 2023, The Blues One Member Company Limited saw a consistent rise in garment exports, growing from around 1.2 million units to over 1.5 million units, indicating stable growth in the industry.
The company's production scale has expanded significantly, driven by the overall economic recovery post-COVID-19 This resurgence has led to heightened demand for textile and garment products in the global market, fostering favorable conditions for the company's export initiatives.
The company experienced a substantial increase in export revenue, rising from approximately 165 billion VND in 2021 to nearly 274 billion VND in 2023 This growth can be attributed to higher raw material prices and transportation costs, which boosted export value through both increased production volume and pricing Garment exports play a crucial role in the company's financial success, consistently representing over 63% of total revenue annually, underscoring its strong position in the global market.
In summary, The Blues experienced significant growth in garment exports, both in volume and value, from 2021 to 2023 This steady upward trend highlights the company's ability to meet market demands effectively and indicates strong potential for further expansion in the garment industry.
THE PROCESS OF DELIVERING LCL GARMENT PRODUCTS
Process of delivering LCL garment products exported by sea at The Blues
This article outlines the LCL garment delivery process at The Blues, using a specific example of a scarf shipment from Da Nang Port to Thailand, with Fjallraven (Sweden) as the importing company and Sawasdeesophonpichit Co., Ltd (Thailand) as the consignee.
To clarify The Blues' responsibilities under the Free On Board (FOB) delivery condition as per Incoterms 2010, their obligations conclude once the goods are loaded onto the vessel at the port of shipment Prior to this point, The Blues must ensure the preparation, packaging, and delivery of the goods, as well as provide a commercial invoice, complete export procedures, and supply necessary delivery documents They remain liable for any risks, damages, or losses until the goods are handed over to the vessel Additionally, The Blues are responsible for costs such as customs clearance fees, delivery expenses to the port, and loading charges Ultimately, they must provide the buyer with proof of delivery and all relevant documentation.
A shipment consisting of a carton containing 60 scarves from Vietnam, weighing 4.48 kg and valued at 254.4 USD, will be exported from Da Nang Payment for this batch will be processed through Telegraphic Transfer (T/T) The transportation will involve collaboration with Quanterm Logistics to package the LCL goods into containers at Danalog's CFS warehouse.
Below is a diagram that specifically describes the process of delivering LCL garment products exported by sea at The Blues One Member Company Limited:
Figure 3-1: Process of delivering LCL garment products exported by sea at The Blues
Analysis of the steps in the process
Under FOB delivery terms, the buyer, Fjallraven (Sweden), is responsible for arranging sea freight, including vessel booking However, for this shipment, the transportation must be organized according to the buyer's specifications Consequently, Fjallraven has requested The Blues to book LCL cargo for more efficient transportation The Blues will reserve a portion of a container for this small LCL batch through the forwarder, Quanterm Logistics, which consolidates goods from various shippers into a single container The forwarder will provide essential details such as vessel name, departure date, expected arrival date, receiving location, and cut-off time through the booking process, enabling The Blues to deliver the goods accordingly.
CFS warehouse for the forwarder Hence, this is the initial and critical step as the
2 Pack cargo and prepare documents
4 Delivery cargo to Container Freight Station (CFS)
Booking is a critical step in the shipping process, requiring precise information to ensure smooth operations The Export-Import team at The Blues submits essential booking request details for new shipments to their forwarder, Quanterm Logistics.
- Estimated time of departure: 26-Jan-2024
After collecting all necessary shipment details, Quanterm Logistics communicates with The Blues to clarify any uncertainties and issues the Booking Note Subsequently, the Export-Import team reviews the Booking Note and monitors shipment progress to verify the accuracy of all information This crucial step ensures that goods are dispatched as scheduled, preventing any disruptions during transportation.
3.2.2 Pack cargo and prepare documents
The company is currently focused on exporting packaged goods, following a three-step preparation process: conducting quality inspections of finished products, suitable packaging, and labeling To ensure compliance with contract requirements, the company thoroughly inspects scarves for defects and adherence to original designs before packaging Once the products pass inspection, they are securely packed in cartons at The Blues warehouse to protect against transportation damage Each carton is labeled with essential product information and a shipping mark to comply with international import and export regulations, facilitating proper identification.
To prevent counterfeit goods and ensure effective quality and safety management, it is essential to implement stringent measures Affixing Shipping Marks plays a crucial role in streamlining the loading, unloading, transportation, and storage of shipments, allowing forwarders to efficiently manage LCL consolidation This practice significantly reduces the risk of confusion and mix-ups within containers, thereby minimizing errors, loss, and damage during transit It is vital that Shipping Marks clearly display essential details such as the consignee's name, address, and package specifications.
Once the warehouse staff finalizes the packaging and measures the goods, they must report the gross weight and dimensions to the import-export department at least 3 to 4 hours before the customs deadline The Export-Import team then prepares essential documents, including an Invoice and Packing List, based on the final information and the contract This meticulous documentation process ensures that all details accurately represent the value, quantity, and specifications of the exported goods, facilitating smooth customs clearance and adherence to contractual obligations.
The export-import team at The Blues will generate invoices using Microsoft Excel, adhering to the company's established format Each invoice will be presented in English and will include essential details such as the buyer's and seller's information, a description of the goods, and the total amount due.
- Invoice Reference number: FJ-BL-016-23-TL02
- Port of loading: Da Nang, Viet Nam
The Packing List, prepared by the export-import staff, is similar to an Invoice and includes essential details from the contract along with accurate quantities, weights, and volumes from other departments Key information on the Packing List typically features Gross Weight, Net Weight, Measurements in cubic meters, a Description of Goods, Number of Packages, Consignee details, Port of Loading, and Final Destination.
The Invoice and Packing List are essential documents in the goods export process, created simultaneously to ensure accuracy and completeness A Commercial Invoice specifies the payment amount due from the importer and serves as a reference for export staff to determine the goods' value and facilitate export procedures Conversely, the Packing List details the packaging of goods, listing all items within each package, such as a carton weighing 4.48 kilograms and measuring 0.02 cubic meters Careful attention to these documents guarantees the integrity of the export process, optimizes customs procedures, and minimizes risks in international trade.
3.2.3.1 Check export documents set for customs declaration:
Before initiating the customs declaration for a shipment, the import-export department compiles essential export documents, including the Contract, Booking Note, Commercial Invoice, and Packing List The staff then prints and verifies these documents for accuracy and consistency, ensuring that all information aligns correctly During this process, they meticulously review the Contract for critical details such as the importer's address, unit price, and item name, cross-referencing these with the Invoice This thorough verification guarantees that the documents accurately represent the agreements between the involved parties, eliminating any inconsistencies.
When managing contracts, it's crucial to ensure that the shipment description and total value align with the invoice and Packing List The contract date should be the same as or earlier than the invoice date to avoid discrepancies from outdated forms For shipments like the Scarf, which only has one line item, there's no need to verify individual values; however, for shipments with multiple line items, it's essential to confirm that the total value matches the invoice Additionally, comparing the Port of Loading and Final Destination on the booking with those on the invoice is vital for consistency.
Customs clearance procedures for the shipment
The Blues boasts years of expertise in managing customs procedures, with a skilled export-import department that efficiently handles customs declarations internally, eliminating the need for forwarders and resulting in significant time and cost savings Utilizing ECUS5 - VNACCS software for electronic customs declaration, The Blues streamlines the process for their Scarf shipments, ensuring a smooth and efficient operation.
Step 1: Start the ECUS5 VNACCS electronic customs declaration software system
Step 2: On the menu tab, select "Customs Declaration Form" and then choose the function "Register new export declaration (EDA)" to bring up the Export declaration screen The Export declaration screen consists of 3 pages: General Information, Container Information, and Item List After entering the information for each page, click
"Record" to save the information
In the export declaration process, the E62 category code signifies that the company focuses on exporting manufactured products This classification is essential for customs purposes and ensures a seamless declaration process.
The customs declaration for the Scarf shipment is managed by the 34NG - Hoa Khanh Industrial Zone Customs Branch in Lien Chieu, ensuring efficient processing within its jurisdiction Since the shipment is transported via sea freight as LCL cargo, it is crucial to accurately use transportation mode code 3, which indicates sea transportation for bulk or loose cargo This precise coding not only complies with regulations but also streamlines the customs declaration process.
Figure 3-2: Details of category group declaration
GENERAL EVALUATION AND RECOMMENDATIONS ON THE
General evaluation
A practical examination of The Blues.'s LCL export shipment process, alongside theoretical research, demonstrates that the company has successfully navigated the complexities of exporting goods The analysis reveals that The Blues effectively meets customer requirements while adhering to contractual obligations The company's export process includes timely coordination with forwarders and the preparation of complete, valid documentation within specified deadlines, ensuring a smooth and efficient shipment experience.
While the company's export shipment process shows promise, it is essential to acknowledge its limitations to improve efficiency Key areas requiring enhancement include document preparation, customs declaration, and cargo transportation A thorough evaluation of the delivery process for LCL garment products reveals specific criteria that need attention for better overall performance.
The Blues has a well-organized structure with clearly defined tasks for each department, enabling effective management and streamlined execution Their export shipment process for LCL garments via sea freight is systematically arranged, covering everything from booking information submission to delivery notification Each workflow step is clearly assigned, fostering inter-departmental collaboration that boosts efficiency and reduces wait times.
With years of expertise in the garment import-export industry, The Blues has established strong, trustworthy connections with shipping agents and customs authorities, facilitating quick and efficient information exchange By utilizing its extensive experience and broad network, the company has streamlined the booking and Bill of Lading (B/L) issuance processes.
47 significantly shortened This ensures that shipments are handled promptly, meeting importers' demands quickly and efficiently
In today's dynamic manufacturing landscape, The Blues prioritizes flexibility and rapid task execution, particularly during the customs declaration phase Each shipment is managed by an import-export specialist skilled in ECUS5_VNACCS software, enhancing the efficiency of the customs process This expertise in document preparation not only accelerates customs declarations but also maintains transport schedules, ensuring timely delivery and operational effectiveness.
The Blues has optimized its delivery process by leveraging strong relationships with importers, eliminating unnecessary steps to reduce delivery times and avoid capital congestion This efficiency not only boosts profitability but also accelerates capital recovery By scanning and sending shipment loading documents directly to importers via Gmail, The Blues enables quick preparation for importation, saving time for both buyers and sellers Additionally, when importers authorize The Blues to handle bookings, the process is expedited further, significantly reducing waiting times compared to self-booking.
Many employees in sales and export-import departments are highly skilled and experienced, adept at tasks such as document preparation and C/O procedures However, new employees often lack the same level of proficiency, resulting in delays and potential errors This can lead to necessary revisions of documents, wasting time during verification and customs declaration processes Additionally, ineffective communication between new hires and other departments further exacerbates workflow delays.
Additionally, there are occasional rare cases, such as when customs declaration results are categorized into "green lane" or "red lane," requiring additional documents
48 for inspection or verification and awaiting approval from the Customs authorities, which can disrupt the delivery process and lead to delays
The Blues' export-import team is expertly trained in essential shipping procedures, ensuring a seamless process from coordinating with shipping agents to managing customs and sending Shipping Instructions (SI) This professional handling of each stage minimizes outsourcing costs, bolstering the company's reputation and enhancing profitability Additionally, owning a warehouse and domestic transportation vehicles significantly reduces expenses related to warehouse rentals and forwarder fees for transporting goods to the port or Container Freight Station (CFS).
The majority of garment product customs declarations at the company are accurate and compliant, allowing most to pass through the green channel for efficient processing However, occasional random checks or employee errors may result in declarations being classified into the yellow or red channel, which delays processing as documents must be uploaded and containers inspected Such delays can extend shipping times for exporters, resulting in late deliveries and incurring additional costs like storage and inspection fees.
The Blues One Member Company Limited leverages its well-established brand and stable capital to invest in advanced infrastructure, including a state-of-the-art manufacturing plant This strategic investment enables the company to deliver high-quality garment products while adhering to delivery timelines and locations, resulting in positive feedback from buyers.
The Blues prioritizes product quality and customer satisfaction by meticulously managing every aspect of the supply chain, from preparation and packaging to documentation and customs declaration, ensuring timely delivery to importers This commitment to excellence has resulted in high satisfaction ratings from buyers, bolstering the reputation of The Blues brand.
The Blues One Member Company Limited is dedicated to maintaining high-quality goods and accurate labeling, ensuring compliance with export and import regulations This meticulous attention to labeling allows forwarders to easily identify The Blues's products among other LCL shipments, minimizing the risk of mix-ups and misdeliveries As a result, the export-import staff report a seamless and error-free transportation process, with no issues of mixed or lost shipments impacting deliveries.
The company maintains a fleet of modern transportation equipment that is regularly upgraded and repaired, ensuring efficient operations Employees in the export-import department are highly satisfied with The Blues' trucking team, which consistently delivers goods punctually to the port and CFS warehouses This reliability fosters a coordinated workflow, significantly enhancing the efficiency and quality of the company's export delivery process.
The Blues benefits from the extensive experience and competence of its Director and Chief Accountant, who have been with the company since its inception Their stable leadership ensures effective management of the delivery process, fostering a secure work environment for employees in the export-import department With strong support from top management, employees appreciate the transparency in the company's operations and customs declarations, which comply with international regulations This confidence enables them to handle unexpected situations, such as customs inspections, without fear.
The import-export department staff expressed feeling overwhelmed by their workload, as the preparation and inspection of shipment documents are typically managed by a single employee This practice raises the risk of errors, as relying on one person for document inspection can lead to overlooked or misinterpreted information Such mistakes may cause unintended complications in the delivery process, ultimately jeopardizing the relationship with the importer.
Proposing some recommendations
Training and supporting office employees is essential for improving the quality and efficiency of the export transportation process Regular short-term vocational training courses for new hires are vital, as they help employees master procedures and gain a deeper understanding of export regulations Additionally, pairing new employees with experienced staff promotes knowledge exchange and enhances practical skills, facilitating quick integration and task comprehension while fostering mutual learning among employees of different generations.
The company should actively promote employee participation in seminars and specialized programs offered by reputable organizations like the Danang Customs Department and the Vietnam Industry Support Alliance Engaging in these events enables employees in the import-export department to stay informed about the latest industry knowledge, comprehend regulations, and adopt best practices, ultimately reducing risks and minimizing errors in customs procedures.
To ensure efficient operations and legal compliance, company leadership and staff must stay informed about relevant state policies, laws, and regulations related to import and export This ongoing education helps prevent errors and supports The Blues in maintaining its reputation while promoting sustainable development in the market.
4.2.2 Strengthening interdepartmental collaboration and support
To enhance workplace communication and collaboration, the company should implement regular meetings that foster interaction between new and existing employees These gatherings will facilitate knowledge sharing, enabling newcomers to acclimate swiftly to their roles while providing a platform for all team members to address and resolve workplace challenges collectively.
52 experiences from senior employees will help new employees learn many valuable things, while also creating solidarity and cooperation within the team
To foster a positive work environment, the company should arrange sports and outdoor activities that encourage participation from all employees These initiatives not only enhance interdepartmental relationships but also promote a friendly atmosphere Engaging in extracurricular activities like football, volleyball, outdoor excursions, and team-building exercises helps employees relieve stress and cultivates team spirit, understanding, and camaraderie among staff.
To effectively manage the challenges of overlapping truck schedules and vehicle shortages during the import and export process, The Blues should develop a comprehensive transportation plan that anticipates potential emergencies By creating a strategic shipping plan, the company can explore partnerships with dependable transportation providers, allowing for the outsourcing of shipping needs This approach ensures a consistent availability of transportation resources to meet the demands of both exports and imports.
Partnering with a transportation provider offers numerous advantages, including enhanced flexibility in meeting delivery needs, which reduces the risk of delays and improves delivery accuracy Additionally, leveraging the extensive network and expertise of transportation partners allows companies to streamline their logistics processes and reduce costs, especially in unforeseen circumstances.
Having a single employee manage document preparation for each export shipment can lead to overload and a higher risk of errors To mitigate this risk, The Blues should allocate tasks efficiently and reasonably Furthermore, effective coordination between the import-export department and other departments, such as sales, is crucial, allowing for cross-checking by two individuals to enhance accuracy and efficiency.
53 verify documents together, helping to reduce errors in the document checking process This cross-checking not only enhances accuracy but also fosters consensus and trust in teamwork
Shipping LCL goods plays a vital role in the supply chain, greatly enhancing the international business operations and profitability of Vietnamese enterprises As competition intensifies and market dynamics evolve, both businesses and import-export companies must strive to quickly adapt and enhance their competitive edge for sustainable growth.
The Blues One Member Company Limited was founded during a time of economic openness and technological advancement, yet it faced challenges from global economic fluctuations The company's current success is attributed to the strategic insights of its board of directors and the dedicated efforts of its employees In the realm of LCL garment exports by sea, the company possesses notable strengths that should be leveraged, while also addressing existing weaknesses for further improvement.
During my internship at The Blues One Member Company Limited, I gained valuable insights into the sea export delivery process of LCL garments My experience allowed me to learn extensively from the team, and I am eager to share recommendations aimed at enhancing the efficiency of this delivery process I sincerely hope that my suggestions will contribute to the company's growth and overall improvement.
This graduation report presents my findings, though time limitations have prevented a comprehensive exploration of certain topics, leading to some shortcomings I genuinely welcome feedback from respected faculty members to enhance and refine the report further.
Quy trình xuất khẩu hàng hóa bằng đường biển (LCL) là một phần quan trọng trong thương mại quốc tế, giúp tối ưu hóa chi phí và thời gian vận chuyển Theo Advantage (2020), quy trình này bao gồm nhiều bước từ chuẩn bị hồ sơ xuất khẩu đến thực hiện các thủ tục hải quan Bade (2005) cũng nhấn mạnh tầm quan trọng của việc nắm rõ các quy định và tài liệu cần thiết để đảm bảo xuất khẩu diễn ra thuận lợi Việc hiểu rõ quy trình này sẽ giúp doanh nghiệp nâng cao hiệu quả kinh doanh và giảm thiểu rủi ro trong xuất khẩu hàng hóa.
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