Course name supply chain management choose a real business (product) and analyze its supply chain

Vinamilk milk production process with modern technology .... Reason why we choose fresh milk products of Vinamilk Nowadays, the demand for milk and milk products in Vietnam is growing ra

HO CHI MINH UNIVERSITY OF BANKING

BUSINESS ADMINISTRATION

COURSE NAME: SUPPLY CHAIN MANAGEMENT Choose a real business (product and analyze its supply chain )

Teacher: Nguyễn Văn Thích

Group: 6 Team’s members’ names and IDs:

1 Bùi Hương Xoan - 050609211762

2 Võ Hoàng Phương Uyên - 050609212320

3 Nguy n Th Y n Phễ ị ế ương - 050609211150

5 Nguy n Th Hoa Mai - 050609212035 ễ ị

TP Hồ Chí Minh, January 202, 4

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1 Reason why we choose esh milk products of Vinamilkfr 3

2 The supply chain process of Vinamilk 3

2.1 Supplier 4

2.2 Producer 5

2.2.1 Scale production 5

2.2.2 Vinamilk milk production process with modern technology 6

2.2.3 Production location strategy 9

2.2.4 What production stages Vinamilk can consider to eliminate? 10

2.3 Distributors 10

2.3.1 Foreign markets 11

2.3.2 Vietnamese market 11

2.4 Retailers 11

2.5 Customers 12

1 Reason why we choose fresh milk products of Vinamilk

Nowadays, the demand for milk and milk products in Vietnam is growing rapidly and most Vietnamese people know milk as a delicious, nutritious and cheap product

The reason is due to the popularity and diversity of designs, types and brands of milk on the Vietnamese market in recent years However, to make a glass of milk

to reach the consumer is not simply a few operations, a few steps but It is a whole complex cycle, a series of multi-step activities, and contains many risks Many milk businesses have failed, but there are also many companies that have achieved a lot of success thanks to good methods of operating their supply chain and Vietnam Dairy Products Joint Stock Corporation Vinamilk is a typical example among them So what has helped Vinamilk conveniently control all stages from production to distribution to consumers to achieve the most satisfactory results? Therefore, we decided to choose Milk of Vinamilk in order

to gain a better understanding of the supply chain of Vinamilk, the leading player

in the country’s dairy industry

2 The supply chain process of Vinamilk

Vinamilk's supply chain management model includes 3 lines:

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In there:

Vinamilk Dairy Company's inputs include: imported raw materials, raw materials purchased from cow farmers and dairy farms, and equipments Raw material:

• Imported raw materials: Vinamilk chooses raw material suppliers from countries with advanced agriculture, ensuring safety and quality standards Vinamilk's current main raw material suppliers are the US, New Zealand, and Europe

• Domestic raw material sources: The company established fresh milk purchasing centers with the role of purchasing fresh milk raw materials from farmers and dairy farms and transport to the production factory

Fresh milk

• Dairy Farms Tây Ninh

How Vinamilk purchasing input materials of Fresh milk product:

Vinamilk gets its inputs from two major sources: purchasing dairy breeds for local farming and purchasing milk powder for the processing stage In order to have the highest quality of milk, it requires Vinamilk imports dairy breeds from Australia and New Zealand, while the milk powder is transported from the USA, New Zealand and Australia As can be seen, the drawback in this supply chain lies in the dependence on imported material.After having dairy breeds imported, these cattle will be distributed to local farms for husbandry Raw milk will be collected both from contracted farmers - who act as both suppliers and owners of the cooperative and from Vinamilk's own farms For the collection from local farmers, the raw milk is shipped by the farmers to the collection center twice per day There are system tests for their input and the payment will be made to farmers based on the quality and quantity of delivered milk In the next stage, the raw milk is preserved at 2 to 6 °C and transported to the factories

Equipment and facilities:

All Vinamilk products are manufactured on modern machinery and equipment from Sweden and European countries

2.2.1 Scale production

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The number of manufacturing plants Vinamilk owns a system of 13 modern : factories from North to South Among them, there is the MEGA super factory, one of the three super milk factories in the world

• North: Nghe An MF, Tien Son MF, Lam Son MF

• Center: Binh Dinh MF, Da Nang MF

• South: Truong Tho MF, Thong Nhat 12 MF, Dielac MF, Viet Nam Powdered MF, Sai Gon MF, Can Tho MF, Viet Nam Beverage Factory, Viet Nam MF

• Foreign countries: MIRAKA Factory

Investment: 6,500 billion VND to invest in building a factory with a high level of automation

Operation: Produced in an automatic, closed line

2.2.2 Vinamilk milk production process with modern technology

Vietnam Dairy Factory is equipped with a sterilized fresh milk production line with modern equipment and leading advanced production technology today The factory operates on an automatic, closed line, from input materials to product output

This is the Vinamilk production process:

Fresh milk, after being checked for quality, will be entered into the cold tank system (150 m3/tank)

From the cold tank, raw fresh milk will go through the processing steps: centrifugation, homogenization, pasteurization, cooling to C and transferred to 4º the tank ready for UHT sterilization processing

UHT sterilization: Advanced sterilization system heats milk up to 140ºC, then the milk is quickly cooled down to 25ºC, preserving the product's natural flavor and nutritional ingredients, vitamins & minerals

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Thanks to the combination of factors: advanced processing technology, UHT sterilization technology and aseptic filling technology, the product can retain its fresh flavor for 6 months without the need for preservatives Then milk is transferred to the filling machine and printed with production information LGV robots operating automatically will transfer finished product pallets to the smart warehouse area In addition, LGV also transports packaging rolls and packaging materials to the machines automatically

Vinamilk also has laboratories that are ISO 17025 certified for the fields of chemistry and biology All factories operating in Vinamilk's production sector have an environmental management system certified to ISO 14001:2004

2.2.3 Production location strategy

Viet Nam’s largest dairy producer Vinamilk, apply centralized production strategy, owns a system of 13 high-end factories across the country, which all meet the strictest international standards, producing the main product lines of the dairy industry

Vietnam Vinamilk Dairy Factory and Vietnam Powdered Milk Factory - the two largest factories specialising in the production of liquid milk and powdered milk, other Vinamilk factories are all equipped with modern lines to produce a wide range of products such as yogurt, drinking yogurt, ice cream, fruit juice and condensed milk They include Tien Son Dairy Factory in the North, Da Nang

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Dairy Factory, Binh Dinh Dairy Factory in central coastal region and Can Tho Dairy Factory in the South West

2.2.4 What production stages Vinamilk can consider to eliminate?

To increase productivity at work, Vinamilk needs to consider eliminating unnecessary milk production steps or can be done in a more efficient way A step that can be considered omitted is removing the pasteurization and intermediate steps This pasteurization step is to remove impurities and bacteria from milk and extend shelf life However, with the development of modern technology, milk can be pasteurized directly Specifically, currently The UHT 2.0 portfolio of Tetra Pak is combined with OneStep technology to processing steps out of the production line, without affecting end-product quality OneStep removes the multiple steps of pasteurization and intermediate storage in the traditional process

of preparing milk from powder before UHT treatment Therefore, In a single unbroken step, raw milk is preheated, separated, standardized and homogenized, before undergoing UHT treatment and regenerative cooling, and then transferred

to the aseptic tank By this way the processing time is shortened from as much as two days to just a few hours, and the operating costs cut by up to 50 percent compared with conventional line solutions (without OneStep technology)

However, omitting or changing milk production steps needs to be carefully considered, ensuring it does not affect the quality and food safety and hygiene of the product Vinamilk needs to conduct thorough research and testing before applying it

2.3 Distributors

Vinamilk utilizes a comprehensive distribution strategy, employing both traditional and modern trade channels, as well as key accounts

A large quantity of Vinamilk products are consumed daily not only across all 63 provinces in Vietnam but also exported to foreign markets

2.3.1 Foreign markets

Vinamilk products are exported to over 40 countries and territories worldwide, including Canada, the United States, Australia, South Korea, Japan, Taiwan, Cambodia, Thailand, Turkey, Russia, etc

Regularly exported items include infant formula, nutritional powder, condensed milk, boxed milk, soy milk, yogurt, soft drinks, etc

2.3.2 Vietnamese market

Thanks to its extensive distribution network nationwide, Vinamilk products are easily accessible to consumers across the country

The distribution channels of Vinamilk include:

• General Trade Channel - GT: A network of distribution partners

• Modern Trade Channel - MT: Nationwide supermarket chains

• Vinamilk Stores: Introducing and selling company products nationwide

• KA Channel: Direct distribution to factories, schools, entertainment areas Vinamilk's strong distribution system is underpinned by the implementation of Enterprise Resource Planning (ERP) tools These tools facilitate seamless operations as both a wholesaler and retailer, providing control over inventory, supply levels, and improving sales activities The company aims to further expand its distribution points, particularly in rural and small urban areas experiencing double-digit growth

2.4 Retailers

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An extensive sales and distribution network is essential to its operational success and allows VINAMILK to capture a large number of customers and ensure the launch of new products and marketing strategies effective nationwide Currently, VINAMILK has more than 200 distributors with more than 251,000 retail points

in all 64 cities across the country In addition, Vinamilk is also present on many online sales and delivery channels, helping customers easily access and purchase their products

Experienced sales team across the country and support distributors to serve consumers better

Customers are also a part of the supply chain, one of the fundamental factors which bring profit and also send back feedback to the company With the feedback from customers, they will show the company what they are into, what they are concerned about in the products as well as expected demand that Vinamilk may need to adjust the flexibility and improve its supply chain Besides, Vinamilk wants the customers understand more that they are not just selling the products, they also distribute to the community such as creating many funds to support the poor children from remote area and also show the care for the environment which is really big problem recently for every companies By doing that, Vinamilk not only gain the benefit from the customers but also achieve the reputation and supports from them