In the context of increased global integration and the digital economy being the dominant trend, Logistics activities from production to consumption are becoming increasingly important in Vietnam's competitiveness—particularly in the industrial and service sectors and the economy in general. Since the 1990s, Logistics services have been available in Vietnam, and in recent years, they have assumed a more crucial role in the country's export-driven economic strategy. Recognizing the importance of Logistics centers in the Logistics industry and overall economic growth, the Vietnamese government authorized a master plan in 2017 for the establishment of a Logistics center system through 2020 and beyond until 2025 (Prime Minister, 2017). The Logistics industry in Vietnam is therefore becoming more promising and is projected to develop rapidly through the decade. Central Vietnam, situated at the terminus of the East-West Economic Corridor (EWEC) extending from Myanmar through Thailand and Laos, boasts substantial economic potential for the 14 regional provinces. This presents promising opportunities for the development of logistics services (Tuan Tran, 2022). Regarding Logistics in Danang, Danang Port emerges as a dynamic gateway connecting the region to global trade routes. Presently, the Danang Port Joint Stock Company operates two primary public warehouses: Tien Sa Port Enterprise and Danang Port Logistics Joint Stock Company, also known as Danalog (Danang web portal, 2020). Despite its advantage of deep-sea access and significant goods throughput, Danang Port faces challenges stemming from a shortage of warehouse facilities (Ho Thien Nga, 2019). In my opinion, the current development of Vietnam's import-export industry highlights the pressing need to promote warehouse services in the central region to address the increasing demand. Currently, Danalog aspires to establish itself as a professional logistics service provider in central Vietnam, serving as a trusted ally for both domestic and international customers. Therefore, during my internship here, I've opted to concentrate on the specific topic of "The process of CFS warehouse services for exporting goods at Danang Port Logistics Joint Stock Company". This choice reflects my intention to thoroughly examine and assess the current state of this process. Despite its seemingly small scope, it holds significant importance. Enhancing the management of goods within the CFS has the potential to greatly improve the effectiveness of logistics operations. 2. Objectives First, systematize theoretical knowledge about the process of CFS warehouse services for exporting goods. Second, analyzing actual steps in the process of CFS warehouse services for exporting goods of Danang Port Logistics Joint Stock Company. Third, evaluate the existing state of the company's process based on theoretical criteria and make recommendations to improve the CFS warehouse services process for exporting goods at Danang Port Logistics Joint Stock Company.
Rationale
In the context of increased global integration and the digital economy being the dominant trend, Logistics activities from production to consumption are becoming increasingly important in Vietnam's competitiveness—particularly in the industrial and service sectors and the economy in general Since the 1990s, Logistics services have been available in Vietnam, and in recent years, they have assumed a more crucial role in the country's export-driven economic strategy Recognizing the importance of Logistics centers in the Logistics industry and overall economic growth, the Vietnamese government authorized a master plan in 2017 for the establishment of a Logistics center system through 2020 and beyond until 2025 (Prime Minister, 2017) The Logistics industry in Vietnam is therefore becoming more promising and is projected to develop rapidly through the decade
Central Vietnam, situated at the terminus of the East-West Economic Corridor (EWEC) extending from Myanmar through Thailand and Laos, boasts substantial economic potential for the 14 regional provinces This presents promising opportunities for the development of logistics services (Tuan Tran, 2022) Regarding Logistics in Danang, Danang Port emerges as a dynamic gateway connecting the region to global trade routes Presently, the Danang Port Joint Stock Company operates two primary public warehouses: Tien Sa Port Enterprise and Danang Port Logistics Joint Stock Company, also known as Danalog (Danang web portal, 2020) Despite its advantage of deep-sea access and significant goods throughput, Danang Port faces challenges stemming from a shortage of warehouse facilities (Ho Thien Nga, 2019)
In my opinion, the current development of Vietnam's import-export industry highlights the pressing need to promote warehouse services in the central region to address the increasing demand Currently, Danalog aspires to establish itself as a professional logistics service provider in central Vietnam, serving as a trusted ally for both domestic and international customers Therefore, during my internship here, I've opted to concentrate on the specific topic of "The process of CFS warehouse services for exporting goods at Danang Port Logistics Joint Stock Company" This choice reflects my intention to thoroughly examine and assess the current state of this process Despite its seemingly small scope, it holds significant importance Enhancing the
2 management of goods within the CFS has the potential to greatly improve the effectiveness of logistics operations.
Objectives
First, systematize theoretical knowledge about the process of CFS warehouse services for exporting goods
Second, analyzing actual steps in the process of CFS warehouse services for exporting goods of Danang Port Logistics Joint Stock Company
Third, evaluate the existing state of the company's process based on theoretical criteria and make recommendations to improve the CFS warehouse services process for exporting goods at Danang Port Logistics Joint Stock Company.
Methodology
This research adopts qualitative methods for data collection, incorporating both primary and secondary sources Primary data collection methods involve analyzing the business performance of Danalog from 2019 to 2023, observing the actual processes in the CFS warehouse of Danalog, directly communicating with employees regarding process implementation status in the CFS warehouse, and participating firsthand in the processes to assess achievements and shortcomings Secondary data collection methods entail gathering information from articles, websites, and research pertaining to service marketing, logistics, and CFS Additionally, annual reports on the business performance of Danalog from 2019 to 2023, the Danalog website, and operational documents from the CFS are also utilized for data collection purposes.
Scope
The scope of this study encompasses the operations of Danang Port Logistics Joint Stock Company within the specified timeframe of the internship period, spanning from January 2nd, 2024, to May 5th, 2024
Research structure
The report is structured into four chapters as follows:
Chapter 1: Theoretical basic of CFS warehouse service for exporting goods Chapter 2: Overview of Danang Port Logistics Joint Stock Company
Chapter 3: The process of CFS warehouse services for exporting goods at
Danang Port Logistics Joint Stock Company
Chapter 4: Evaluations and recommendations to complete the process for exporting goods at Danang Port Logistics Joint Stock Company
THEORETICAL BASIC OF CFS WAREHOUSE SERVICES FOR
Service
According to (Kotler, P & Armstrong, G., 2007), “Service is any act or performance that one party can offer to another that is essentially intangible and does not result in ownership of anything Its production may or may not be tied to a physical product”
“Services are economic activities that create value and provide benefits for customers at specific times and places as a result of bringing about a desired change in – or on behalf of – the recipient of the service.” (Lovelock & Patterson, 2015)
(Lehtinen, 1983) defined services as “an activity or a series of activities which take place in interactions with a contact person or a physical machine and which provides consumer satisfaction.”
Services are economic activities that provide intangible benefits to the first purchaser, such as convenience, amusement, timeliness, comfort, safety, and health They are not physical products or constructions (Quinn, J.B et al., 1987) and (Lancaster,
G & Massingham, L., 2001) define a service as an intangible product involving a deed, procedure, or effort that cannot be physically possessed
In short, a service is a non-material, intangible offering made by one party (the service provider) to another (the customer or client) to meet a need or desire Services, unlike physical things, cannot be touched, felt, or stored Services are consumed at the time they are created and are frequently distinguished by experiences, performances, or activities
According to (Lovelock, C H., 2001), service has four characteristics: intangibility, inseparability, variability, and perishability
● Intangibility - Services are intangible It implies that services cannot be seen, tasted, felt, heard, or smelled before they are purchased
● Inseparability - Services are generated and used simultaneously, and they cannot be detached from their suppliers, whether humans or machines
● Variability - The quality of services depends on who offers them, as well as when, where, and how they are delivered
● Perishability - Services cannot be stored in inventory for future use or sale, hence they can never become invalid It also means that the services cannot be returned or refunded once delivered.
Less-than-Container load goods
LCL stands for the phrase “Less than Container Load” It refers to situations where the goods has small quantities or dimensions and will not fill the container In this case, the shipper might choose LCL, which consolidates their shipment with other smaller goodses This is also known as a consolidated container, in which numerous smaller goodses are integrated and shipped in the same container (Allgoods, 2021)
LCL goods (also known as retail goods or consol goods) differs from FCL (full container load) goods, which is a full container load that does not need to be coupled with other shipments
Less than Container Load can streamline and optimize supply chains from the manufacturing line to the customer's shelves According to logistics magazine Global Trade (Greg Scott, 2021), LCL shipping saves shippers both money and time For many firms, LCL is a service used to enter new markets, access new client groups, and experiment with new product categories This strategy enables businesses to do so in a cost-effective, just-in-time manner, keeping inventory levels to a minimal and avoiding potentially overcommitting to higher amounts early on
In addition, Less than container load shipping has numerous key advantages for small-volume shippers Key benefits include:
Cost-Effective for Small Volumes - Price is an extremely essential factor
Optimized small-volume shipments are advantageous since firms only pay for the space used for what they ship, resulting in significantly lower fees than a conventional FCL shipment
Flexibility - Less than Container Load provides businesses with many alternatives for collection and delivery at specific locations, as well as a variety of timings As a result, firms can send goods with greater flexibility because they can ship smaller quantities (such as small boxes and pallets) regularly without having to pay for a whole container if it is not required
Enhanced Inventory Management - LCL allows firms to better manage their inventory, lowering storage costs and improving supply chain efficiency
Convenient pairings - Additionally, Less than Container Load (LCL) can be seamlessly integrated with other services or modes of transportation, enhancing its versatility and convenience even further These combinations may include air freight, consolidation (merging multiple shipments into a single truck or container), deconsolidation (separating LCL goods and delivering it to its final destination individually), insurance coverage, customs clearance assistance, visibility services, and various other options.
Container Freight Station (CFS)
According to Clause 4, Article 4 of the (Customs Law, 2014), “Container freight station means depots used for receiving or breaking bulk containerized goodses of many consignees”
A CFS is often located near a port and handles goods loading and unloading from containers ((1LO), 1995) ((UNTCD), 1991) defines a CFS as a shed that receives and consolidates break bulk goodses from several consignors into a container or unpacks goodses for multiple consignees before delivery CFSs are responsible for delivering import goods to inland transit and temporarily storing import and export goodses during the unloading and loading process, as well as completing necessary paperwork ((1LO),
The term "CFS warehouse service" refers to the range of logistical services provided by a Container Freight Station (CFS) warehouse A CFS warehouse serves as an intermediate facility for the temporary storage, consolidation, deconsolidation, and handling of goods shipments transported in containers The services offered by a CFS warehouse are designed to facilitate the smooth and efficient movement of goods
7 between different modes of transportation, such as ships, trucks, and trains, as well as to assist with customs clearance procedures Typical services provided by a CFS warehouse include:
● Receiving and Unloading - Receiving goods from trucks, rail, or other modes of transportation and unloading it at the CFS for further processing
● Goods Inspection - Inspecting received goods to ensure it matches the supporting documentation and meets regulatory standards This may include physical inspection, documentation verification, and compliance inspections
● Sorting and segregation - Organizing incoming goods according to destination, consignee, or other criteria Separating goods according to kind, size, or other pertinent variables to promote efficient handling and storage
● Consolidation and deconsolidation - This involves combining smaller shipments into bigger containers or pallets for outbound shipping In contrast, bigger shipments are deconsolidated into discrete parts for distribution or further processing
● Packaging & Repackaging - The process of packaging or repackaging commodities to ensure their safe and secure storage or transit This could include labeling, palletizing, shrink-wrapping, or other packaging methods
● Storage and Warehousing - Placing incoming goods in specific locations of the
CFS facility Ensure correct organization, stacking, and inventory management to maximize space use and expedite retrieval
● Customs clearance - The process of facilitating the clearance of imported or exported goods Coordinating with customs officials to ensure regulatory compliance, documentation submission, duty payments, and inspection procedures
● Documentation and record-keeping - This involves keeping correct records of every incoming and outgoing goods, such as shipping documentation, invoices, customs declarations, and inventory logs Ensure that documentation is complete, up to date, and accessible for auditing purposes
● Value-added Services - Offering additional services such as labeling, barcode scanning, quality inspection, reworking, or kitting based on customer specifications
● Dispatch and Transportation - Organizing the subsequent transportation of goods to their final destination, whether by road, rail, sea, or air To ensure prompt delivery, we coordinate with carriers, freight forwarders, and logistical partners
3.3 Roles of Container Freight Station
(Ihenacho, 2005) reports in his narration that the essential role of CFSs is to supplement port facilities by offering services such as handling, storage, and customs inspection, ensuring that all containers entering the terminal are prepared for export In terms of imports, containers can be transferred to a CFS, thereby easing congestion at the terminal and enabling it to handle a higher volume of goods
According to the International Labour Organization (ILO) in 1995, Container Freight Stations (CFS) are specifically designed to cater to the needs of consignors and consignees who transport goods in break-bulk form and aim to capitalize on the benefits of containerized, intermodal transport to the fullest extent possible The roles of CFS, as outlined by the ILO, include the following: receiving, sorting, and consolidating export break-bulk goodses from various modes of transportation such as road vehicles, rail wagons, and inland waterway craft; packing export goodses into containers for loading onto vessels; unpacking import containers, sorting and separating the unpacked goodses into break-bulk consignments for distribution to consignees; delivering import goodses to various modes of inland transport including road vehicles, rail wagons, and inland waterway craft; temporarily storing import and export goodses between unloading and loading times while completing various documentary and administrative formalities such as customs inspection, settling charges for packing, unpacking, and storage, and arranging transport
As per the Report by the (Inter Ministerial Group Report, 2005), a Container Freight Station (CFS) is essentially an extension of the Port/ICD/Airgoods Complex, serving as a holding facility where import/export goods are stored until they undergo examination and clearance processes Importantly, goods imported into the country can be swiftly transferred from the port to the CFS, contributing to the alleviation of congestion at the port Various activities related to the clearance of goods, including those destined for home consumption, warehousing, temporary admissions, re-export, temporary storage for onward transit, outright export, and transshipments, are carried
9 out at these stations Consequently, the clearance of goods from CFS holds significant importance in trade, both for export and import goods, as it represents the final point of contact with customs authorities
In short, a container freight station's goal is to improve the effectiveness, security, and dependability of global trade by offering necessary services that facilitate the efficient movement of goods between seaports and land-based locations.
Overview of Freight Forwarding Services and Freight Forwarders
According to the Model Rules of FIATA - Federation of Freight Forwarders Associations, “Freight Forwarding Services means services of any kind relating to the carriage, consolidation, storage, handling, packing or distribution of the goods as well as ancillary and advisory services in connection therewith, including but not limited to customs and fiscal matters, declaring the goods for official purposes, procuring insurance of the goods and collecting or procuring payment or documents relating to the goods.”
According to Vietnam (Commercial Law, 2005), Freight Forwarding Services are commercial activities whereby traders organize the performance of one or many jobs including reception, transportation, warehousing, yard storage of goodses, completion of customs procedures and other formalities and paperwork, provision of consultancy to customers, services of packaging, marking, delivery of goods, or other services related to goods according to agreements with customers in order to enjoy service charges
According to the Model Rules of FIATA - Federation of Freight Forwarders Associations, “Freight forwarder means the person concluding a contract of Freight Forwarding Services with a Customer.” In addition, (Paul R Murphy & James M Daley, 2001) define a freight forwarder as a trade specialist who facilitates shipment movement through various functions The freight forwarder has traditionally been seen as a significant intermediary involved solely in the conveyance of goodses from a point of origin (the shipper) to a point of destination (the consignee) A freight forwarder's primary business is to purchase transportation services from many carriers and consolidate small shipments from multiple shippers into larger shipments heading to a certain location at a lesser cost Some freight forwarders even own their own equipment and transportation providers A freight forwarder's typical activities include preparing
10 required documentation, paying freight rates, arranging inland transportation services, and so on
Freight forwarders' liability refers to the legal responsibilities and obligations they face while carrying out their services These liabilities may differ based on the terms of the contract, the type of goods being transported, and the applicable laws and regulations Generally, freight forwarders' obligations include according to the Model Rules of FIATA - Federation of Freight Forwarders Associations:
The Freight Forwarder's liability (except as principal)
● The Freight Forwarder is liable if he fails to exercise due diligence and take reasonable measures in the performance of the Freight Forwarding Services, in which case he, subject to Art.8, shall compensate the Customer for loss of or damage to the goods as well as for direct financial loss resulting from breach of his duty of care
● The Freight Forwarder is not liable for acts and omissions by third parties, such as, but not limited to, Carriers, warehousemen, stevedores, port authorities and other freight forwarders, unless he has failed to exercise due diligence in selecting, instructing or supervising such third parties
The Freight Forwarder's liability as principal:
● The Freight Forwarder is subject to liability as principal not only when he actually performs the carriage himself by his own means of transport (performing Carrier), but also if, by issuing his own transport document or otherwise, he has made an express or implied undertaking to assume Carrier liability (contracting Carrier) However, the Freight Forwarder shall not be deemed liable as Carrier if the Customer has received a transport document issued by a person other than the Freight Forwarder and does not within a reasonable time maintain that the Freight Forwarder is nevertheless liable as Carrier
● With respect to services other than carriage of goods such as, but not limited to, storage, handling, packing or distribution of the goods, as well as ancillary services in connection therewith, the Freight Forwarder shall be liable as principal:
+ When such services have been performed by himself using his own facilities or employees, or
+ If he has made an express or implied undertaking to assume liability as principal
4.3 The Freight Forwarders’s exclusions and Limits of Liability
According to the Model Rules of FIATA - Federation of Freight Forwarders Associations, the Freight Forwarder shall in no event be liable for:
● Valuables or dangerous goods unless declared as such to the Freight Forwarder at the time of the conclusion of the contract,
● Loss following from delay unless expressly agreed in writing,
● Indirect or consequential loss such as, but not limited to, loss of profit and loss of market,
● Loss of or damage to the goods due to inherent defect of the goods,
● Acts or omissions of Customer, its agents or any third party that the Customer employs,
● Improper packing or marking of the goods, unless the Freight Forwarder is liable as principal for such services under Art 7.2.
Process
In ISO 2000:2005, a process is defined as “a set of interrelated or interacting activities which transforms inputs into outputs.”
According to Davenport T.H., a business process is an organized and measured set of operations that produce a certain outcome for a customer or market The business process prioritizes organizational processes over product-centric approaches A process is a sequence of actions with defined beginning and end points, inputs, and outputs, forming the structure of an action A process approach involves aligning with the customer's perspective Processes are the frameworks that enable organizations to create value for their customers (Davenport, 1990)
The service process encompasses a set of tasks carried out to provide a service to clients While commonly associated with manufacturing and logistics, where it describes the conversion of raw materials into final products, it is primarily applied to
12 customer-facing operations such as offering professional services or delivering food orders, etc (Mohammad, 2022)
The service process is fundamental to the success of a business and is characterized by five main attributes according to (Mohammad, 2022):
● Divergence - Divergence occurs when service providers tailor their offerings to meet the unique needs of individual customers, rather than adhering strictly to standardized procedures This customization ensures that customers receive a personalized service that aligns with their specific requirements
● Complexity - Service processes may involve numerous steps or interactions, leading to complexity However, it is essential to simplify the process to manage customer expectations effectively and ensure seamless service delivery
● Service Location - Services can be delivered through various channels, including in-person, online, or via phone Consideration of the service location is crucial for ensuring accessibility and convenience for customers
● Customer Participation and Interaction - Customer involvement is integral to the service process, as their participation is necessary to receive the service This interaction can occur through face-to-face meetings, online platforms, or telephone conversations, depending on the nature of the service
● The Service Itself - Ultimately, the service provided is the cornerstone of the service process Customers expect the service to meet their needs and preferences, and it is essential for businesses to deliver a quality service that meets or exceeds these expectations
In "Fundamentals of Business Process Management" by (Dumas, 2018), the author proposes four criteria which are time, cost, quality, and flexibility for evaluating business processes These criteria are essential for assessing the effectiveness, efficiency, and performance of processes within an organization
Time is frequently the first performance metric that comes to mind when examining processes More specifically, cycle time—also known as throughput time— is a widely used process performance metric Cycle time is the amount of time needed to complete a single case from beginning to end When considering the parts of cycle
13 time, there are various aspects of time dimension Processing time, also known as service time, is the amount of time that resources—such as participants in the process or software programs—spend working on the case Waiting time is the amount of time a case is idle Waiting time encompasses two types of waiting times: queuing time, which occurs when there aren't enough resources to handle the case, and other types of waiting times, as when synchronization with another operation is required or when input from a customer or external actor is anticipated
Cost is an important consideration when analyzing processes since it directly impacts an organization's financial success and overall efficiency Cost evaluation is determining how much a process will cost to run and examining how well resources are being used Here are some crucial cost factors to consider while evaluating processes Fixed costs are overhead expenses that are mostly unaffected by processing intensity Standard fixed costs result from information system maintenance and infrastructure use Variable costs have a positive correlation with some variables, including sales, purchases, and new hires Operational cost is a cost concept that is directly linked to productivity Operational costs are directly tied to the results of a business process A significant element of operational cost is usually labor cost, the cost associated with human resources in manufacturing a good or delivering a service
A business process's quality can be assessed from the viewpoints of the client and process participants, to name at least two distinct perspectives This is sometimes referred to as the internal versus external quality distinction External quality refers to client satisfaction with the product or process Satisfaction with the product can be defined as the extent to which a client believes that the delivered product meets the specifications or expectations However, a client's pleasure with a process depends on its execution A common challenge is providing clients with timely, relevant, and high- quality progress updates On the other hand, a business process's internal quality is linked to the perspectives of its participants Internal quality concerns often include how much a process participant feels in control of the job completed, how much variety is encountered, and whether or not working within the framework of the business process is perceived as difficult
The flexibility of a business process is often overlooked when evaluating the impact of a redesign In general, flexibility is the ability to respond to changes Another approach to the performance dimension of flexibility is to differentiate between runtime and construction time flexibility Run time flexibility refers to the ability to adapt to changes during a business process Build time flexibility refers to the ability to adjust the business process structure It is becoming increasingly crucial to distinguish between a business process's flexibility and its other elements
OVERVIEW OF DANANG PORT LOGISTICS JOINT STOCK
Overview of Danang Port Logistics Joint Stock Company
● Company name: Da Nang Port Logistics Joint Stock Company
● Address: 97 Yet Kieu Street, Tho Quang Ward, Son Tra District, Da Nang
● Email: sale@danalog.com.vn
Figures 2.1: Company logo (source: danalog.com.vn)
Danang Port Logistics Joint Stock Company, located in the bustling coastal city of Danang, the center of the economy of Central Vietnam, is an important crossroad point for the nation and the surrounding countries Located on the East-West Economic Corridor (EWEC) and the road to Tien Sa Port, 14B Nation highway The transportation system connecting Danalog to Tien Sa Port, the Da Nang International Airport, 1A Nation highway, the Danang railway station, and the industrial zones create favorable conditions for transporting goods by land way, and railway
Danang Port Logistics Joint Stock Company was established and developed in the following major stages:
● 2006: Da Nang Port Warehousing Station was established This was the forerunner of Danalog Company, which operated as a logistics unit for Danang Port
● 2009: Following the policy of renovating state-owned enterprises and the development plan of the leaders of Danang Port Limited Liability Company, Danang Port Logistics Join Stock Company was established and granted Business registration certificate No.0400999731 by the Danang Department of Planning and Investment on March 5th, 2009
● October 12th, 2009: The corporation amended its Business License for the first time
● August 18, 2011: The company was listed on the UpCom trading floor with the stock symbol DNL
● 2014: Marks the establishment of CFS and Bonded warehouses
- The first Depot Container was established
- Vietnam Container Joint Stock Company acquired 30.83% of DANALOG's charter capital and became a major shareholder They also served on the company's Board of Directors, Supervisory Board, and Executive Board
● November 2, 2017: The Company changed the Business License for the eighth time, increasing the charter capital to VND 43.1 billion, with Da Nang Port Joint Stock Company accounting for 45.1% of charter capital and Vietnam Container Joint Stock Company accounting for 30.91%
Danalog is doing business in many areas Currently, Danalog provides the following services:
● Trading, exploiting warehouses, and freight forwarding services
● CFS and Bonded Warehouse services
● Domestic transport agent, Container agent
● Transporting goods by sea and road
List of major partners of the company
Tables 2.1: Major partners of the company
Organizational structure of the company
(Source: Human Resource Department) Figures 2.3: Organizational structure of Danalog
- Members: Mr Tran Le Tuan (Chairman) and four commissioners
● Establishing long-term strategies, development plans, and annual business plans for the company;
● Supervising and directing daily operations of the board of directors and other managers;
● Monitoring business activities, internal controls, and risk management;
● Establishing organizational structure and management regulations; establishing subsidiaries, new branches, and representative offices
- Member: Mr Tran Phuoc Khuong (Head of Supervisory Board)
● Supervising the Board of Directors, Director, or General Director's management and operations of the organization
● Evaluate the company's business reports, annual and six-month financial reports, and management assessment reports from the Board of Directors
● At annual meetings, submit reports on financial statement evaluation, the company's annual business reports, and management assessment reports from the Board of Directors to the General Meeting of Shareholders
Chief Executive Officer (CEO): Mr Tran Phuoc Hong
● Researching and proposing business development strategies for the organization and creating plans for each cycle and time of operation
● Supervising subordinate operations and implementing firm standards, norms, and financial accounting policies
Human Resources and Administration Department
- Head of Department: Mr Nguyen Ouoc Khanh
● Establish training and retraining plans to increase staff qualifications
- Head of department: Mrs Trinh Thi Bich Tram
● Organize accounting activities following the company's corporate structure
● Organize to record, compute, and reflect the company's entire assets precisely, honestly, rapidly, and thoroughly, as well as analyze its business performance
● Calculate and promptly subtract all taxes paid to the budget and cash left by the company; pay loans, receivables, and payables on time
● Accurately and immediately reflect the results of periodic asset inventory and provide ways to handle losses
● Complete and timely accounting and settlement reports under current regulations
● Securely store accounting documents and confidential data
- Head of Department: Mr Vu Huy Binh
● Develop company-wide customer service policies, implement management, and oversee customer service operations
● Plan for research, data, and evaluation of markets, customers, and rivals
● Receiving, checking, and processing CFS Bonded warehouse plan information
● Receive and reply to consumer comments; take care of customers
- Head of Department: Mr Nguyen Tran Khoi Binh
● Handling business-related papers and procedures, such as customs declaration procedures, quarantine agency fees, and shipping lines
● Communicate and share information with shipping lines and partners; quote and notify customers of time and location
● Collaborate closely with the company's truck fleet to schedule trips to the port to pick up or export containers of products
The company’s resources
2.4.1 Infrastructure a Infrastructure of the company
Domestic warehouse: 8.200㎡: Equipped with an automatic fire suppression system, surveillance cameras, and guaranteed security
(Sources: Company’s website) Figures 2.4: Danalog’s domestic warehouse
Bonded warehouse: 10.000㎡: Equipped with an automatic fire suppression system, surveillance cameras, and guaranteed security and customs availability
(Sources: Company’s website) Figures 2.5: Danalog’s bonded warehouse
CFS warehouse: 3000㎡: Equipped with an automatic fire suppression system, surveillance cameras, and guaranteed security and customs availability Selective Pallet Racking Systems, plastic pallets, and forklifts are all available
(Sources: Company’s website) Figures 2.6 Danalog’s bonded warehouse b Facilities in CFS warehouse
The forklift system undergoes regular maintenance and is cleaned twice a week to ensure optimal performance and efficiency This proactive approach helps prevent potential issues and ensures smooth operations within the warehouse
Danalog employs a selective pallet racking system, a widely used method for organizing pallets This system, arranged in a wide aisle pattern, does not require specialized handling equipment, offering versatility in warehouse operations Each pallet has a load capacity ranging from 500kg to 1500kg, providing flexibility for various types of goods Additionally, the double-deep pallet racking system enhances storage density compared to single-deep systems, maximizing space utilization within the warehouse
The warehouse is divided into two main areas: one for exported goods and another for imported goods With a total of 14 racks, including 5 dedicated to the import area and 9 for the export area, Danalog ensures efficient organization and management of inventory
Furthermore, the security system in place includes various measures to safeguard the warehouse and its contents This includes a comprehensive fire-fighting system, round-the-clock security guards, a burglar alarm system, and a CCTV surveillance system These security measures provide comprehensive protection against potential threats and ensure the safety and security of stored goods
As of the end of 2023, Danalog employed a total of 151 individuals, distributed across various departments and teams:
● The current executive board includes 1 director, 1 deputy director, and 1 chief accountant
● Four departments: Human Resources and Administration Department, Finance and Accounting Department, Transportation Sales Department, Warehouse Sales Department
● Container depot team, CFS warehouse, domestic warehouse, mechanized team, worker team, technical team
THE PROCESS OF CFS WAREHOUSE SERVICES FOR
Description of the process of CFS warehouse services for exporting goods at
In fact, Less than Container Load (LCL) shipments arrive at varying times and originate from various sources Consequently, prior to consolidation, these goods are gradually accumulated and stored at the CFS warehouse, requiring a waiting period of several days until a sufficient quantity of goods is amassed The overall process of CFS warehouse services for exporting goods at Danalog encompasses a total of 8 sequential steps, divided into 2 distinct phases: phase A - the initial phase entails receiving goods for storage, while phase B - the subsequent phase involves the stuffing of goods into containers Notably, this process involves the active participation of three key entities:
● Forwarders who directly cover the expenses for Danalog's CFS services on behalf of the goods' owners Goods shipments to Danalog may originate from either goods owners or forwarders, hence within phase A, they are broadly categorized as Danalog's customers
● Tallymen assume the crucial responsibility of overseeing the reception and stuffing of goods within the warehouse premises
● Sales staff primarily manage goods based on documentary procedures
Plan to receive export goods
• Forwarders register Warehouse Entry Plan
• Sales staff receive and verify the registration email
Import cargo into CFS warehouse
• Tallyman checks Receiving order and prepares tally documents
• Notify customer representatives about defective goods to check (if any)
• Record the defective units (if any)
• Confirm completion of warehouse entry
Phase A - Detailed description of the process of receiving goods for storage
Tables 3.1: Phase A - Receiving goods for storage
Step Party Phase A - The process of receiving goods for storage
Phase A consists of four primary steps: Plan to receive export goods; Issue the
"Receiving order"; Import goods into the CES warehouse; and Confirm and report
Detailed steps must be followed in a specific sequence:
● To preserve the data, forwarders are required to submit their booking note, customs declarations, and packing lists ahead of time to Danalog's sales department
● Danalog confirms the booking and Forwarders deliver goods to Danalog, providing paper documents for verification
● If documents are valid, the sales department issues a "Receiving order" for the customer to import goods into the CFS warehouse
● At the CFS warehouse, tallymen ensure customers have the Receiving order and import shipments
● Tallymen notify customer representatives of any defects in shipments, recording them if immediate fixes are not possible
● Once the shipment is in the CFS warehouse, tallymen and customer representatives confirm related documents
● The sales department saves and transfers the report to the Forwarders' offices to signify completion of receiving procedures for their shipments
3.2.1 Plan to receive export goods
Forwarders register Warehouse Entry Plan
At present, Danalog adopts a procedure whereby goods reception is aligned with the number of booking notes furnished by Forwarders to the goods owners Consequently, Forwarders must furnish their booking notes, and customs declaration to Danalog well in advance, along with any specific requirements on goods reception, via email at least 1 day before the scheduled delivery date This information is then cross- referenced with the current warehouse capacity by Danalog's team, thereby enabling them to assess whether there is sufficient redundant capacity within the CFS facility to accommodate the incoming shipment Subsequently, this information is diligently documented and tracked by the sales staff for reference and monitoring purposes In instances where the anticipated arrival date of the commodities exceeds the scheduled closing time, proactive communication channels are established by the sales staff to promptly liaise with the Forwarders and seek resolution
Figures 3.1: Booking note and customs declaration Sales staff receive and verify the registration email
The sales staff reviews incoming emails, examining the attached delivery documents, which typically encompass booking notes, customs declarations, and packing lists if provided Should any essential information be found missing or incomplete, the forwarders are promptly contacted to solicit additional clarification and ensure comprehensive documentation Conversely, if the submitted information is deemed complete and valid, the sales staff proceed to initiate the declaration process within the VASSCM system, and Receiving order will be issued
Note: The details provided on the booking note play a pivotal role in the storage and stuffing processes Each shipment is allocated a unique booking note number, thereby facilitating clear differentiation among various consignments When multiple orders are consolidated within the same booking note, the distinctiveness is further enhanced through the utilization of Purchase Order (PO) numbers Furthermore, in instances where diverse types of goods are encompassed within a single order, differentiation is achieved through the utilization of Item/Material codes, in addition to any shipping marks imprinted on the packaging Additionally, descriptions of the goods, such as the total number of goods units, Gross Weight (GW), and Cubic Meter (CBM),
29 as outlined on the booking notes, prove immensely beneficial This information aids the warehouse department in accurately estimating the needed number of pallets for storage, facilitating the meticulous preparation of Pallet ID and Tally sheets, which in turn expedites the receiving process, rendering it more efficient and convenient
3.1.2 Issue Receiving order when goods delivered to Danalog
Typically, once factories complete the production of shipments, they deliver them to Danalog in accordance with the instructions outlined on the booking note issued by the Forwarder (with Danalog serving as the stuffing location) Then, customer representatives are required to visit the sales department and present paper documents for verification These documents include a booking note, a packing list (if provided by the Forwarder), and two customs declaration forms
➢ Note: Upon the arrival of trucks at Danalog's gate, security guards promptly record the license plate and pertinent contact details Until the completion of the delivery process at the CFS warehouse, customer representatives are required to retain the check-in paper issued by the security guards Although this document is not directly associated with the goods receiving and tallying procedures, it serves as evidence of the customer's presence when utilizing Danalog's services
Receiving orders are exclusively issued by Danalog when customers furnish valid documentation for their shipments The sales staff is tasked with verifying the information contained within the paper documents To qualify as valid, the details on the booking note and packing list must align with the information previously conveyed by the forwarder via email Additionally, customs declaration forms are deemed valid only if they bear the requisite customs certification stamps If there are any problems or shortages in the document set, Danalog will contact Forwarders to resolve and swiftly supplement
Upon confirmation of a valid document set, the sales staff will utilize the available information to issue 3 Receiving orders The documents retained at the sales department comprise 1 Receiving order, 1 Booking note, and 1 Customs declaration form Customer representatives will be provided with 1 Packing list (if applicable) and
1 Receiving order, authenticated by the sales manager, for submission to the tallyman
30 at the CFS warehouse Additionally, they will receive 1 Customs declaration form, verified by Danalog, and an optional extra Receiving order for their records
Following the completion of the "Receiving order-making" procedures at the sales department, customers proceed to the CFS warehouse area to store their goods, accompanied by the returned documents Subsequently, the tallymen at the CFS warehouse import the goods by the information provided on the Receiving orders
3.1.3 Import goods into CFS warehouse
Tallyman checks Receiving order and prepares tally documents
Customers utilizing the CFS warehouse are required to present the Receiving order validated by the sales department before a tallyman authorizes the unloading of goods from the vehicle Tallyman verifies the goods' information against the details outlined on the Receiving order, encompassing PO, Items, Style, Destination, Packing List, and other pertinent information In the event of any discrepancies or errors, they promptly notify the sales staff for further action and resolution
Using the data provided in the order, including details such as the owner's name, forwarder's information, booking note and PO numbers, and the total quantity of units, the tallyman will prepare the pallet ID and Tally sheet:
➢ The Pallet ID (Appendix): serves as a vital document affixed to each pallet, containing essential information such as details of the goods owner and forwarder, along with the booking note and PO number Clear and legible numbering is particularly crucial during the stuffing phase (phase B) when locating shipments stored on racks Ensuring legible and sizable numbers on the Pallet ID is imperative for efficient retrieval of goods during the stuffing process Moreover, the Pallet ID also specifies the number of units per pallet Tallymen meticulously count the goods units on each pallet before attaching the Pallet sheet, ensuring accurate tallying of the total number of goods received Additionally, the bottom of the Pallet sheet includes the name of the tallyman receiving the shipment, providing accountability in case of any issues with the shipment
➢ The Tally sheet (Appendix): serves as a comprehensive record of the inventory process Alongside basic shipment details like the Pallet ID, it contains more detailed information about the goods receiving procedure This includes specifics such as the gate through which the goods are imported, as well as the start and end times, facilitating the retrieval of CCTV footage in case of customer complaints Additionally, the Tally sheet logs the goods units per pallet, the total number of pallets utilized, and calculates the actual total quantity of goods received This enables comparison with the total quantity stated on the Receiving order provided by the customer
Figures 3.5 Tally Sheet Tally goods
As goods are offloaded from the trucks, they are arranged onto pallets by forklift drivers and workers The workers strategically position the item units on each pallet for optimal arrangement Meanwhile, the tallymen tally the quantity of units on each pallet, recording this information on the Pallet sheet before affixing it to the goods block Forklift drivers transport the pallets to the racks designated for the Forwarder of the respective shipment Following this, the tallymen document the tally results on the Tally sheet This process is repeated until all goods has been completely unloaded In cases where there are multiple Purchase Orders (POs) within the same shipment, tallymen must communicate this information to the workers beforehand This ensures that the workers can select the goods according to each PO, thus preventing the mixing of different types of POs on the same pallet
Figures 3.6: A pallet of goods tallied by a Tallyman Danalog’s CFS warehouse
➢ Note: Apart from tallying the quantity of goods, tallymen are also tasked with noting the sizes of each goods unit This is essential for calculating the total Cubic Meter (CBM) occupied by the entire shipment, particularly in cases where the factories have not measured the size of the shipment beforehand The accuracy of CBM measurements is crucial for optimizing the containerization process in the future Precise CBM values are necessary to ensure that shipping containers are utilized efficiently while also guaranteeing the safety of the goods during transport, preventing tilting or damage
Notify customer representatives about defective goods to check (if any)
Phase B - Detailed description of the process of stuffing of goods into containers
• Forwarders send container loading plan
• Send plan to CFS warehouse to prepare resource
Prepare empty containers and seals
• Get empty containers and seals
• Check condition of empty containers and seals
• Sales department save container loading report
• Transfer full container, report and invoice to Fowarders
Tables 3.2: Phase B - Stuffing export goods into containers
Step Party Phase B - The process of stuffing export goods into containers
Phase B encompasses four primary steps, including Container Loading Planning, Preparation of empty containers and seals, Stuffing, and Reporting and Invoicing Within this phase, Forwarders take the forefront in direct interaction with Danalog Acting on behalf of goods owners, they execute procedures with shipping lines and customs at the port, functioning as exporters of Full Container Loads Detailed steps must be followed in a specific sequence:
● Forwarders send Container Loading Plans (CLP) to Danalog beforehand via email, allowing the sales department to cross-reference with warehouse shipment data At day's end, sales staff consolidate CLP files and send them to the CFS team for resource preparation
● Before goods stuffing at the CFS warehouse, the sales department arranges empty container delivery and seal retrieval
● Tallymen inspect containers upon arrival; if all is well, they load goods
● Upon loading sufficient goods, tallymen inform the CFS team and sales department, who records the information After handing over full containers to Forwarder representatives at CFS, the sales department emails the Container Loading Report, service statistics, and issues an invoice to the Forwarder's office
Forwarders send container loading plan
Forwarders typically submit their stuffing requests via email ahead of time, usually around one week before the Estimated Time of Departure (ETD) indicated on the booking note Within each submission, they provide comprehensive documentation, including their Container Loading Plan (CLP), along with the relevant booking note issued by the shipping lines The CLP is required to contain detailed information regarding the component shipments slated for loading into a singular container Essential information such as the booking note number, the total quantity of units, as well as the overall gross weight (GW) and cubic meters (CBM) of the goods, must be specified within the CLP
Figures 3.8: Container Loading Plan (CLP) Sales staff check information
Upon receipt of requests from Forwarders, the sales department conducts a thorough comparison of the shipment details listed on the CLP with the actual data of imported shipments at the CFS warehouse When they discover that any shipments have not been received, they will notify the forwarders right away so that they can handle It is the responsibility of the Forwarders to coordinate with factories or traders to ensure timely replenishment of goods, thus preventing schedule delays and overtime charges Prior to the stuffing process, the sales department must request that Forwarders confirm CLP once more, aiming to avoid any additional customer requests
Send plan to CFS warehouse to prepare resources
Once all shipments have been received at the CFS warehouse, the sales team consolidates the container loading orders for the following day into a unified file, forwarding it to the warehouse department beforehand The warehouse department relies on this file to organize freight and allocate human resources for the stuffing process
Figures 3.9:Container Loading plan in file
3.3.2 Prepare empty containers and seals
Get empty containers and seal
The transportation team collaborates with the sales department to transport empty containers to the CFS warehouse If Danalog is tasked with managing the procedures for retrieving empty containers, they must adhere to the details outlined in the booking note exchanged between the Shipping lines and the Forwarders, which were provided in advance alongside the CLP The process for applying for a customs seal follows a similar protocol
When the Shipping lines release empty containers, the sales department proceeds to update pertinent details such as the container number and seal numbers provided by the shipping line into the CLP Sales staff then print two copies of the final updated CLP: one designated for tallymen to monitor the stuffing process and another utilized as a "picking list" for forklift drivers This approach facilitates the location tracking of each shipment within the warehouse by tallymen, enabling forklift drivers to retrieve goods more efficiently
Check condition of empty containers and seals
After the arrival of empty containers and seals at the CFS warehouse, tallymen undertake a comparison between the actual container numbers and seal numbers with the information provided on the CLP They proceed to open the containers, inspecting their condition to ascertain whether the ceiling, floor, and walls meet the requisite
41 standards for sea freight If there are any problems, tallymen are obligated to promptly report to the sales department, necessitating notification to the shipping line for replacement with an alternative container Assuming all conditions are satisfactory, tallymen proceed to capture 11 photographs of the empty containers for inclusion in reports following the completion of the stuffing process These photographs encompass images of the ceilings, floors, and walls of both the front and rear halves of the containers, as well as comprehensive shots of the containers in their entirety
➢ Note: Additionally, it's noteworthy that each Forwarder may necessitate distinct documentation about container inspection For instance, Expeditors mandates a VGM document, which denotes the verified gross mass of the container for international transport Alongside this requirement, Expeditors also utilizes their container checklist, titled "Container trailer security and agricultural contaminant checklist" DHL, another Forwarder, employs its unique container inspection record However, other Forwarders do not require these documents
Figures 3.11: Container trailer security and agricultural contaminant checklist (of
Figures 3.12:Container Inspection Record (of DHL)
According to the CLP, tallymen load goods based on the specified number of booking notes, POs, or items, ensuring the accuracy of the quantity of goods Given that multiple shipments are consolidated into a single container, tallymen coordinate with forklift drivers to pick up goods sequentially according to each booking note or PO number Notably, forklift drivers are instructed to pick up pallets of the designated shipment only, facilitating tallying by the tallymen This process continues until the entirety of a particular shipment is loaded onto the container, after which the forklift driver proceeds to pick up the next shipment
➢ Note: For DHL and Expeditors, their customers mandate that Danalog loads shipments sequentially from top to bottom as outlined in the CLP Conversely, other Forwarders don't impose such requirements, allowing Danalog to select shipments in any order as long as it's feasible for forklift drivers to handle while ensuring adequate goods quantity is loaded
During the tallying process, if the quantity of units on each pallet matches the count specified on the Pallet ID, tallymen are authorized to remove the corresponding Pallet sheet from the pallet These sheets are then retained for reporting purposes after the process
The amount of units in that pallet must then be noted by tallymen on the tally sheet Upon notification from a forklift driver that all pallets for a particular loading shipment have been picked, tallymen calculate the total number of units tallied for that shipment Loading of the next shipment is only permitted when this tally matches the information specified on the CLP However, if the outcome differs, they have to cease loading to ascertain the cause A miscalculation, incorrect tallying, missing pallets, etc could be the causes Tallymen and forklift drivers collaborate to resolve these issues, ensuring that each shipment has the required quantity of units before proceeding to load another shipment Finally, once all shipments are loaded, tallymen conduct a final recalculation They verify whether the total number of loaded units recorded on the Tally sheet corresponds to the total quantity on the CLP, and confirm whether the number of Pallet sheets pulled out matches the result on the Tally sheet If all figures align, tallymen sign both the Container Loading Plan and Container Loading Tally Sheet, affirming the completion of the CLP
EVALUATIONS AND RECOMMENDATIONS TO COMPLETE
Evaluation
The accomplishments in the CFS warehouse service process at Danalog include prompt handling of requests from Forwarders by the Sales staff The duration for receiving export LCL shipments is contingent upon factors such as the quantity and complexity of the shipments However, the timeframe allocated for stuffing LCL shipments into containers of various sizes, including 20'DC, 40'DC, and 40'HC, is standardized to range from 2 to 3 hours This standard timeframe is implemented to uphold accuracy in the process while avoiding any disruptions to the customers' schedules
However, in reality, there are notable deficiencies in the process that lead to a longer order cycle time than anticipated:
- The absence of advanced technological support in warehouse operations can significantly contribute to operational sluggishness:
● Manual tallying of goods units by tallymen, without much support from identification technology, poses challenges Tallymen must determine the total number of units on a pallet, considering multiple layers and varying unit counts per layer This requires expertise in assessing different packaging styles, sizes, and loading patterns to estimate goods quantities accurately and swiftly However, dealing with shipments containing various package sizes can be challenging, even for experienced staff, resulting in prolonged tallying times to ensure accuracy
● Numerous procedures within the warehouse still heavily rely on paper documentation, such as verifying booking notes, and customs declaration forms, and preparing Pallet sheets and Tally sheets for the tallying process The reliance on manual handling of paper documents proves to be inherently more time- consuming compared to streamlined processes facilitated by computerized systems
● The lack of dedicated warehouse management software worsens operational inefficiencies, especially in tracking shipments When the tallyman responsible for stuffing differs from the one who received the shipment, the lack of prior experience can cause delays in identifying and locating the relevant shipment
- Limited in terms of human resources and facilities,
● Despite the current sufficiency of tallymen, there is a shortage of forklift drivers
In instances of high shipment volumes, multiple tallymen may have to share a single forklift driver, leading to potential delays in service provision and longer waiting times for customers
● When Forwarders send an excessive number of shipments, the CFS warehouse at Danalog faces a space shortage As a result, shipments may be placed in the aisles or on the racks of other Forwarders, posing challenges in terms of picking and locating goods
Efficient transportation of containers to the container depot is facilitated through well-planned scheduling, ensuring timely arrangements that circumvent the expenses associated with storing containers at the port and potential traffic congestion Given the unique nature of the route, effective time management plays a pivotal role in mitigating costs In Da Nang City, container transport routes become particularly critical, especially during peak tourist seasons, underscoring the significance of implementing a methodical and rational container transport schedule Such an approach not only aids in minimizing costs linked to port storage and slow delivery but also fosters smoother operations amidst the bustling urban landscape
The aging warehouse infrastructure poses challenges in maintaining the integrity of goods, particularly during adverse weather conditions such as the rainy season The prevalence of humid conditions within these warehouses increases the risk of water leakage, rendering imported goods, which often constitute a substantial portion of warehouse inventory, particularly vulnerable The lack of adequate preservation measures results in the emergence of issues like moldy goods and compromised packaging, leading to additional costs arising from customer complaints and subsequent remedial actions
Furthermore, during peak seasons characterized by heightened workload and increased pressure, employees are more susceptible to errors Common risks include stuffing the wrong goods or experiencing delays in deliveries As a consequence, the company is compelled to retrieve and rectify these errors, incurring additional delivery costs in the process These challenges underscore the importance of modernizing warehouse infrastructure and implementing robust quality control measures to enhance operational efficiency and mitigate financial implications associated with errors and damages
While CLPs are typically completed punctually, occasional delays may arise, attributable to various factors, be it internal constraints like resource shortages or external influences stemming from partners Nevertheless, Danalog exhibits a proactive stance, demonstrating readiness to extend working hours, including overtime and night shifts, to uphold customer schedules and mitigate the risk of shipment dropouts, thereby ensuring smooth freight operations and minimizing disruptions in export processes bound for foreign destinations This commitment underscores Danalog's dedication to delivering reliable and customer-centric services, prioritizing timeliness and operational excellence in meeting client requirements
Shipments are securely stored at the CFS to minimize loss or shrinking due to the strict security procedures in place for vehicles entering and leaving Danalog
Multiple parties oversee and verify the detailed procedures and thorough documentation:
● Danalog consistently requests customers to submit plans in advance and confirm them for each phase, enabling adequate preparation of resources for implementation This proactive approach minimizes the risk of resource shortages when needed
● Throughout the processes of receiving and stuffing goods, Danalog ensures the presence of customer representatives at the warehouse, guaranteeing that customers are fully informed about the condition of their goods upon entry and departure from the CFS Additionally, following the completion of each phase, Danalog preserves specific images and detailed reports, which include confirmation from all parties involved This commitment to transparency serves to enhance reliability and facilitates the division of responsibilities in the event of errors
● Despite limited equipment support during tally operations, Danalog's staff meticulously undertake counting procedures with great care to ensure accuracy Should discrepancies arise between the results and the Receiving order or Container loading plan, the process is promptly paused to conduct thorough checks and identify the root cause Danalog demonstrates a willingness to accept a slower order cycle if it translates to achieving a higher level of accuracy, underscoring their commitment to delivering precise and reliable services
Due to the predominantly manual nature of operations, the potential for errors remains a concern For instance, unskilled forklift drivers may inadvertently cause goods to fall during transport, tallymen might miscount the number of goods units, and workers could make errors in classifying goods These mistakes can compromise both the safety and accuracy of operations However, due to the tight processes in place, which include meticulous verification and comparison procedures, such errors are either rare or easily addressed
Danalog is prepared to cater to the unique demands of each forwarder, such as specific preferences for receiving or stuffing goods, fixing defects, or altering plans, provided these requests align with Danalog's internal regulations Additionally, Danalog demonstrates flexibility by accommodating customer requests for changes in plans, such as adjusting the timing for receiving or stuffing shipments, as long as it remains feasible within operational constraints
The complexity of Danalog's process, involving numerous steps and documents across various departments, often leads to customer frustration and dissatisfaction Many, particularly new clients, find Danalog's procedures overly intricate and challenging to navigate Customers are required to undergo documentation procedures in the office area before proceeding to the CFS, which may be geographically distant, to complete the remaining steps involving the actual goods
Recommendations
Improving process quality in the CFS warehouse service at Danalog is not solely dependent on Danalog's efforts but also requires coordination from multiple partners involved Furthermore, Danalog's financial capacity must be expanded to facilitate investment in process enhancements Considering the following recommendations may prove beneficial in enhancing the performance of certain steps in the process:
➢ Promote the application of information technology in the CFS warehouse service
To ensure the efficiency of both process operations and warehouse management, it's essential to invest in warehouse management software and upgrade equipment and infrastructure These investments are crucial for minimizing human errors and optimizing operational processes
- RFID technology: As Danalog expands, the company may consider adopting
RFID (Radio Frequency Identification) technology instead of traditional barcode scanners for scanning shipments The feasibility of this transition depends on whether manufacturers in Vietnam begin incorporating RFID chips into their packaging If RFID technology becomes more prevalent in Vietnam in the future, it could offer several advantages, including improved accuracy and speed in tallying shipments With RFID technology, as shipments pass through the warehouse door, the RFID readers can quickly capture detailed information about each pallet without the need for manual scanning Within seconds, the computer system can retrieve all relevant goods data, eliminating the necessity for Tallymen to use paper-based documents such as Tally sheets and Pallet sheets This transition to RFID technology could streamline the tallying process, reduce reliance on manual documentation, and enhance overall efficiency in the warehouse operations
- Electronic documents: To enhance efficiency in the supply chain, it's crucial for all parties involved to coordinate and implement specialized software for generating and transmitting electronic data By utilizing such software, businesses can significantly reduce the reliance on paperwork, leading to streamlining of various steps in the process that involve checking paper documents Additionally, the adoption of specialized software facilitates faster processing of documents, thereby expediting overall workflow and improving operational efficiency
- Upgrade the website: The company's website still contains outdated information that hasn't been updated, potentially leading to confusion and a lack of information for customers It's essential to regularly update the website with new content and enhance its features to provide customers with accurate and up-to-date information This includes redesigning the website, adding new items, and integrating additional features to enhance functionality and user experience By doing so, customers will perceive the company as more reliable and professional, leaving a positive impression and bolstering trust in its services
➢ Investment in infrastructure and facilities
- Increase service area: Expanding the warehouse infrastructure through the construction of additional warehouses or the installation of more warehouse doors is essential to elevate the level of service delivery and minimize waiting times for
52 customers In addition to this expansion initiative, Danalog should consider investing in additional racks or adopting an advanced automatic racking system Such technological upgrades not only optimize space utilization within the warehouse but also cater to the individualized needs of each customer, ensuring efficient and tailored storage solutions
- Upgrade equipment used in the warehouse: Enhancing the warehouse's operational efficiency involves upgrading various equipment components, including shelf systems, electric lights, pallets, automatic fire protection systems, and electric forklifts These improvements aim to modernize the warehouse infrastructure, optimize storage capabilities, enhance safety measures, and streamline material handling processes
- Conduct regular safety monitoring activities: The company must conduct regular safety monitoring activities, administer vehicle and warehouse inspections, and consider replacing outdated vehicles These measures are essential to uphold the safety and well-being of employees and ensure that operational activities adhere to established safety protocols and standards
➢ Increase human resources and improve the quality of labor resources
- Increase human resources: The company should focus on recruiting additional forklift drivers and implementing comprehensive training programs to enhance their skills This approach will enable drivers to swiftly acclimate to their roles, mitigate errors during goods handling, and ensure operational efficiency Moreover, integrating picking robots into the workflow can significantly enhance the picking rate and minimize the risk of accidents associated with manual goods movement
- Train and improve the quality of labor resources: Enhancing employees' proficiency in English is crucial, especially considering that most import and export documents are in English, including specialized terms related to warehouse and shipment information Employees must be able to comprehend these documents effectively to minimize errors and complications in their work To address this, Danalog can implement several strategies:
● Organize skill development programs: These programs can focus on enhancing employees' understanding of transportation, machinery maintenance, foreign languages, and office computer skills This comprehensive approach ensures that employees are equipped with the necessary knowledge to excel in their roles
● Collaborate with external training centers: Partnering with external training centers to offer basic English courses for employees can help improve their language proficiency These courses can be tailored to the specific needs of warehouse staff, focusing on relevant vocabulary and terminology
● Establish a routine training schedule: Implement a structured training schedule to ensure that all staff members receive regular and relevant training This schedule should include initial onboarding instruction for new employees, ongoing training sessions, and specialized staff training involved in specific warehouse procedures Regular training ensures that employees stay updated on industry best practices and company policies.
As Vietnam's economy integrates into the global economy, import and export activities become increasingly diverse, complicated, and dynamic As a result, logistics services play a significant role in assisting Vietnamese firms in more conveniently importing and exporting commodities CFS storage service is a solution for efficiently distributing and circulating commodities Business operations at CFS warehouses have been designed to be consistent, well-organized, and interconnected in order to save time, money, and effort