Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at mascot international viet nam

MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: TRAN THI THUY DUONG DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS TO IMPROVEMATERIALS INSPECTION PROCESSAND RETURNING EXCESS FABRICS INTO OFFSET STOCK AND STOCK BALANCING AT MASCOT INTERNATIONAL VIETNAM HAI PHONG – 2015 MINISTRY OF TRANSPORTATION MINISTRY OF EDUCATION & TRAINING VIETNAM MARITIME UNIVERSITY STUDENT NAME: TRAN THI THUY DUONG CLASS: GMA 02 DISSERTATION GLOBAL STUDIES AND MARITIME AFFAIRS RECOMMENDATIONS TO IMPROVE MATERIALS INSPECTION PROCESSAND RETURNING EXCESS FABRICS INTO OFFSET STOCK AND STOCK BALANCING AT MASCOT INTERNATIONAL VIETNAM Supervisor: Vu Thi Thu Hang Division: Global Studies and Maritime Affairs Faculty: Economics HAI PHONG – 2015 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam PREFACE In the integrated environment, there are numerous companies decided to invest and create their branches oversea Nevertheless, this is a big challenge for the parent companies to control all of their subcontractors because of time, distance and scale This is also a problem of Mascot International A/S which is the Danish family-owned company When managers have tried to improve Mascot’s branch in Vietnam they realized several difficulties within fabrics flowthat required to be handled This research will concentrate on analyze the drawbacks existing in inspection process and returning excess fabrics into offset stock and stock balancing which are two major steps of fabrics flow As expected result, this researchwill help managers have full vision including aspects that they have not noticed yet Furthermore, recommendations also will be conducted in this research I declare that this report is my own unaided work It has not been submitted before If violated, I am solely responsible for and bear the punishments of the Institution and University Student Name and Signature Tran ThiThuy Duong i Tran ThiThuy Duong-GMA 02 Page i Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam ACKNOWLEDGEMENT Firstly, I would like to express my sincere gratitude to my advisor Ms Vu Thi Thu Hang and Mr Vu Le Huy for the continuous support of my graduated dissertation.They helped me to have the most suitable outline and corrected errors for my assignment Admittedly, their guidance is very important to this dissertation It would be big mistake if not to mention that Mr Lars SpangKjeldsen–a director of IT and Logistics of Mascot International A/S gave me the first idea for this dissertation’s topic and supported me all the time regardless of distance He also read and gave me several precious comments on it I could not image how I could this task without his support I am very appreciated about that In addition, I also received help from all managers at Mascot International Vietnam during the internship time at related departments in this company I did not only have great opportunities to listen but also participated into the real job for intensive understanding i Tran ThiThuy Duong-GMA 02 Page ii Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam TABLE OF CONTENTS PREFACE .i ACKNOWLEDGEMENT ii TABLE OF CONTENTS iii LIST OF ABBREVIATIONS .v LIST OF TABLES vi LIST OF FIGURES vii INTRODUCTION 1.1 Supply chain management 1.1.1 Supply chain 1.1.2 Conflict in traditional system 1.2 Inventory management 1.2.1 Type of inventory according to flow of materials 1.2.2 Function of inventories 1.3 MRP (Materials requirement planning) 1.3.1 Definition 10 1.3.2 Process .10 1.3.3 Advantages and disadvantages 12 1.4 Inspection 12 CHAPTER 2: Material inspection process and returning excess fabrics into offset and stock balancing at Mascot International Vietnam 14 2.1 Mascot introduction 14 2.1.1 Mascot International A/S 14 2.1.2 Mascot Vietnam 17 2.2 Introduction of materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam 21 2.2.1 Introduction of fabrics flow at Mascot International Vietnam 21 2.2.2 Inspection process at Mascot International Vietnam 25 2.2.3 Return excess fabrics into offset stock and stock balancing process at Mascot International Vietnam .28 i Tran ThiThuy Duong-GMA 02 Page iii Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam 2.3 Evaluation and justification 32 2.3.1 Evaluation of Materials Inspection process at Mascot International Vietnam 32 2.3.2 Evaluation of returning excess fabrics to offset stock and stock balancing process at Mascot International Vietnam .36 CHAPTER 3: RECOMMENDATIONS ON MATERIALS INSPECTION PROCESS AND RETURNING EXCESS FABRICS INTO OFFSET STOCK AND STOCK BALANCING 38 3.1 Recommendations on material inspection process at Mascot International Vietnam .38 3.1.1 Human recruitment and training .38 3.1.2 Automated process 39 3.2 Recommendation on returning excess fabrics to offset stock and stock balancing step at Mascot International Vietnam .39 3.2.1 Human reassigning 39 3.2.2 Creating new transaction on SAP system 40 CONCLUSION 42 Bibliography 43 i Tran ThiThuy Duong-GMA 02 Page iv Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam LIST OF ABBREVIATIONS i BWH Bonded warehouse GR Goods receipt GI Goods issue PO Purchasing order DO Delivery order TO Transferring order LAB Laboratory Tran ThiThuy Duong-GMA 02 Page v Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam LIST OF TABLES Table 1.1: Fabrics inspection standard 13 Table 2.1: Consumption of fabrics in week 38 (on September) 23 Table 2.2: fabrics types with popular defects 28 Table 2.3: cutting’s list 29 Table 2.4: An example of SAP system relating to balancing 32 i Tran ThiThuy Duong-GMA 02 Page vi Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam LIST OF FIGURES Figure 0.1: Percentage of errors in inspection step from 2013 to 2015 Figure 1.1: Ultimate supply chain Figure 1.2: conflict objectives Figure 1.3: Simplify bill of materials 11 Figure 2.1: Mascot’s shareholders 14 Figure 2.2: Production 15 Figure 2.3: Mascot slogan 16 Figure 2.4: Mascot INT Vietnam’s Infrastructure 18 Figure 2.5: SA 8000 certificate 19 Figure 2.6: Mascot International Vietnam structure 20 Figure 2.7: Fabrics flow 21 Figure 2.8: Light table 26 Figure 2.9: Return excess fabrics to offset stock process 28 Figure 2.10: Inspection’s errors from 2013 to 2015 33 Figure 2.11: Quantity of error at light table according to experience from 2013 to 2015 35 i Tran ThiThuy Duong-GMA 02 Page vii Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam INTRODUCTION Necessity Mascot International Vietnam is an indispensable part belonging to Mascot International A/S or Mascot Denmark However it is not an easy task to control this branch because ofits own large scale, time difference and long distance between Mascot Denmark and Mascot Vietnam Managers in Mascot Denmark have tried for many years to find justification for current problem which is high lead time of fabrics flow andsolutions for it in order to improve Mascot Vietnam’s productivity but the results were not as good as expectation “I have tried for several years coming up with a solution, but have never succeeded 100% I don’t know if it is lack of time from my side when I’m in Vietnam, misunderstandings or others, but I hope when you allocate your time that we can get better outcome”,said Director of IT & Logistics in Mascot International A/S Nevertheless, this topic has ever written by anyone yet It is likely that by concentrating into two major steps of fabrics flowoccurring the most serious problems will make this assignment become more useful for company Research scope - Space of research This research has been done after being trained and observed in all related departments such as supply chain, LAB, production and so on in Mascot Vietnam - Time for research Most of the information and figures are collected in 2015 It is obvious that, company always updates to adopt the newest trend so it is necessary for this research to use the newest process procedures of this year However, in order to make this research become persuasive there are some figures came from years ago also used Research objects There are two objects that this research aims to describe, analyse and give recommendations: materials inspection process and returning excess fabrics to offset and stock balancing ii Tran ThiThuy Duong-GMA 02 Page Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam process For instance, workers make mistake on sewing leading to the products cannot be exported so the fabrics that used to make those products will be wasted and necessary to be replaced In order to meet the customers’ demands workers have to use another part of the same fabrics type to fulfill the PO with enough quantity of the final productions In this situation, the consumption of these fabrics will be higher than the first estimation It is difficult to avoid errors during producing process so consumption may change As the consequence, supply chain department needs to base on the real quantity of used fabrics to balance stock and update the real consumption on SAP As the function, this system will automatically show up the required quantity column so related departments in Mascot Denmark can see it and send fabrics to Mascot Vietnam in time for doing the other PO in the future In order to balance stock, supply chain need to several tasks as below First of all, they must correct the time when delivery order (DO) of each purchasing order (PO) is made according to “weekly overview” which is a statistic of all the information relating to purchasing orders (POs) and delivery orders (Dos) of fabrics and accessories for producing in Vietnam and Laos week by week within the year It is very important to set the correct dates of POs on SAP because the excess quantity of materials will be changed when the date of POs is changed This task is called “run ZPOCO” It will directly affect to the real consumption which must be balanced correctly After that, supply chain staff also has to look at the quantity of the rest materials after the last DO has made and then investigate to make sure that this figure is right If it is not as corrected as the real one they need to find out the justification and fix it This is pre-production process In order to investigate they may check the amount of materials at warehouse where usually stores materials after being used for producing On the other hand, they also can look at related emails because sometimes production department will send orders by mail for requiring replaced some materials if there is any problem during the producing process In addition, staff should check to make sure that they already made and packed DO with enough quantity as required and so on There are so many resources that they need to look at for investigation and update the consumption of fabrics and accessories if it is necessary to avoid any incorrect figures on the consumption list, otherwise there are some cases may occur ii Tran ThiThuy Duong-GMA 02 Page 30 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam For instance, if balancing stocks is not correct SAP system will show up the wrong quantity requirement As the consequence, Mascot in Denmark will send materials to Mascot Vietnam when it is not needed to produce any longer Company will lose money on transportation as well as inventory It also may create the opposite issue when there are not any needed fabrics or accessories left in the stock but because of the wrong consumption so Mascot Denmark did not send materials in time for producing In this case, company also gets lost because workers may have no job to and get late of delivery to customers and so on This is atheory example to explain about this balancing process.According to the table 2.4, stock 8000 including both offset stock and production stockwhich contains 15 million meter of thread.The requirement column is the quantity of thread that need to implement each specific PO For example, in order to implement PO A, million meter of thread will be used for production In the right time, supply chain department will have responsibility to make DO for PO A before sending physically that amount of materials to production.If DO for PO A is made with the correct required quantity as requirement column, million meter of thread will be added into quantity of stock 8000 (the blue figure) It means that 15 million of thread already included million for implementing PO A It is similar with another PO In fact, when all DOs were made with right amount of raw materials as requirement, the green figure which is nearly 10 million of thread should be equal to the quantity of that thread after used in offset stock However, in some cases such as supply chain made DO with higher quantity than requirement or production department use this thread more than normal consumption and so on, there is a dissimilarity compared to offset stock containing approximately million of this thread As the consequence, when Mascot Denmark look at SAP system they believe that there are nearly ten million still be available and maybe the next POs will use less than million of this thread in the future so they will not send this materials for Mascot Vietnam This is the reason why it is necessary to balance stock and remake consumption to avoid serious problems ii Tran ThiThuy Duong-GMA 02 Page 31 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam Table 2.4: An example of SAP system relating to balancing 2.3 Evaluation and justification 2.3.1 Evaluation of Materials Inspection process at Mascot International Vietnam 2.3.1.1 Advantages - This process has followed very strict principles such as four-point system as mentioning on chapter one This standard helps company not only to save time for finding an efficient solution in inspection but also can guide workers to work as a system As the result, Mascot is always successful with its own logo “tested to work” - Company invested huge amount of money in order to install so many stateof-the-art equipment for fabrics inspection in LAB department It is obvious that Mascot is very famous with high quality of work wear products so the role of LAB is crucial to bring benefits for company 2.3.1.2 Disadvantages and justifications Although this is very important stage in the fabrics flow as well as company’s development and reputation there is still drawback existing during inspection processes with its own reasons - Lacking of human resource at light table department for investing fabrics when big quantity of products is imported in the same time to Bonded warehouse At that time light table workers also have responsibility to discharge cargoes from containers It is obvious that the productivity ii Tran ThiThuy Duong-GMA 02 Page 32 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam ofinspection must be reduced For instance, if as the normal light table workers have responsibility to inspect at least 60 rolls per table or 360 per day as total, they will not able to that when they have to spend time and effort to discharge cargoes from containers That is one of the reason why the lead time for this step will be increase unexpectedly and prolong the total lead time of fabrics flow - There are errors in inspection leading to fabrics shortage for production or slowing down production process as the consequence As mentioned above, in the inspection step light table workers have responsibility not only to check fabrics’ quality but also measure quantity The quantity will be updated on SAP By this way, marker makers can see it and know how many and which fabrics’ roll needed for implementing the order and should be sent to production basing on consumption counting In fact, that consumption was always added more percent of fabrics to avoid the unexpected shortage during production process but it still happened According to statistics (figure 2.10), recording quantity of fabrics incorrectly has been the most popular mistake of light table workers with approximately 44 percent 28 percent is the figure for missing defects during inspection process There was about percent of total inspection’s errors belonging to incorrect measuring, especially fabric’s width It accounted for the lowest percentage compared to others but it still existed and needed to be considered Last but not least, the other errors accounted for nearly 22 percent Inspection's errors 22% 28% 6% 44% miss defect measure incorrectly record incorrectly The others Figure 2.10: Inspection’s errors from 2013 to 2015 ii Tran ThiThuy Duong-GMA 02 Page 33 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam To start with the first consequence is shortage of fabrics in production because workers measure fabrics’ length is bigger than the real quantity or they did not catch enough defects and send adequate fabrics to production This situation will become serious when offset stock does not have enough excess fabrics for producing, Bonded warehouse will have to send that amount of fabrics for production to avoid disruption in producing process Otherwise company will cope with loosing of money and customers It is obvious that sending materials from Bonded warehouse to the other places is complicated process with involving of many related departments and employees As the above description, first of all, supply chain needs to make DO for production department’s order After that workers in Bonded warehouse staff must confirm TOto inform supply chain that there is still enough that kind of materials in the stock before picking activities implemented On the other hand, import-export department has to make set of documents to work with customs Then arranging transportation mean is indispensable to transport those materials to cutting department It is obvious that this extra process will take time and money of Mascot Furthermore, this situation will be worse when there are no similar materials left at bonded warehouse when production need it to replace or compensate the wrong ones Nevertheless this one is more difficult to occur, except when both two steps mentioning in this research get mistake It means that at the same time when inspection is failed, stock balancing is also incorrect so Mascot Denmark cannot order and send the needed materials on time On the other hand, marker makershave to base on the data updated after inspection step so if this information is not corrected they will have to remake that charts It is time-consuming Moreover, the wrong data on SAP about fabric’s width leads to the error of ordering the appropriated rolls from marker makers to supply chain There will be one of two unexpected situations occurs Production will need to ask for another replaced ones or it will take more time and effort in cutting process For example, as counted production need 18 rolls of fabrics 60043-101-001 with the same width as 160 m (table 2.1) but workers measure incorrectly one roll: the real width is 150 but they measure 160 m When this roll is used in cutting process it creates problems as mentioned above ii Tran ThiThuy Duong-GMA 02 Page 34 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam Admittedly, the errors in inspection step are usually figured out on cutting table At that time, cutting departments will make an order for replaced fabrics If they not receiveit in the short period of time, they will have to take time to produce another urgent orderswhile waiting for materials Although all the problems were handled immediately after happening so it did not affect seriously on production, it is no denial that their reasons still should be analyzed to avoid the similar situations in the next time The major justification for this problem is human errors 60.000 50.000 Percentage of errors according to experience 55.556 40.000 38.889 30.000 20.000 10.000 5.556 000 under from to over Figure 2.11: Quantity of error at light table according to experience from 2013 to 2015 According to the statistics, it is likely that one of the reasons why workershave got mistake is because of less experience in their job Over a half of errors have come from new employees with under a year working for company meanwhile the old staff just have approximately percent of mistake Nonetheless, it does not mean when workers have long time of working in company they will not make mistake any more but with experience they are able to address problems more correctly in shorter time ii Tran ThiThuy Duong-GMA 02 Page 35 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam 2.3.2 Evaluation of returning excess fabrics to offset stock and stock balancingprocess at Mascot International Vietnam 2.3.2.1 Advantages Return excess fabrics to offset will make good condition for production and reduce the complex procedure in importing or exporting to the Bonded warehouse If there is no error in stock balancing this will be the great way to control quantity of fabrics in Mascot Vietnam and help Mascot Denmark to know when and how much quantity of fabrics should be sent to Mascot Vietnam leading to reduce some costs such as inventoryor tax and avoid disruption of production 2.3.2.2 Disadvantages Stock balancing or making consumption was not correct therefore production’s lead time became longer and increase costs First of all, when actual consumption and figure on SAP are unequal, quantity of required fabrics will not maintain correctly so Mascot Denmark may not catch corrected information and send the right quantity of fabrics in the right time In fact, Mascot is a big company having factories and distributors in many foreign nations so in order to control the fabrics flow, all the key information have to be updated on SAP system Making consumption affects directly to producing process because this step is solution for Mascot in Denmark to see the inadequate quantity and make the orders for those materials and send to Mascot Vietnam on time In addition, SAP system also supports for making documents to work directly with customs If consumption on SAP is not accurate, company will have to pay tax for customs and be considered as treating It would be even worse when products could not be exported That is the reason why if company gets mistake at making consumption the total lead time will be prolonged and cost will also increase unexpectedly One of the reasons for this error is because lacking of cooperation and sharing information clearly among related departments The information of fabrics flow is exchanged among many involved departments such as supply chain, production and even Mascot Denmark On the other hand, it may also because stock balancing has not done every day so information become increase and more complicated ii Tran ThiThuy Duong-GMA 02 Page 36 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam - Sometimes, although there are fabrics rolls existing in the offset stock, it is no longer existed on SAP In this case, that roll will stay in the offset without being noticed until the stock actual counting organized twice per year This could create a problem is that increase inventory level meanwhile transportation and purchasing costs appear for buying the similar type of fabrics Furthermore, those fabrics will not be used any more if there is no order for them in the future Overall, it is time and money consuming This problem occurred because of both human and machine’s error In fact, when production requires fabrics offset will send those fabrics to them after receiving from Bonded warehouse or receive excess rolls from production At the same time when workers dispatch materials from offset stock to storing places belonging to production, they also have to implement an action named goods issue (GI) as deleting those fabrics roll from SAP area that under control of offset However, if there are more than one similar fabrics rolls with same color and style and code when workers GI one roll by hand scan machine information of all rolls will be disappeared But in some case, although those rolls are the same fabric’s type they were stored in different location, perhaps because they were received by offset stock in dissimilar time This is the function of the machine and it requires worker to pay more attention to realize occurring problem ii Tran ThiThuy Duong-GMA 02 Page 37 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam CHAPTER 3: RECOMMENDATIONS ON MATERIALS INSPECTION PROCESS AND RETURNING EXCESS FABRICS INTO OFFSET STOCK AND STOCK BALANCING 3.1 Recommendations on material inspection process at Mascot International Vietnam 3.1.1 Human recruitment and training According to the disadvantages mentioned in the chapter of the research, human errors are the major problem in this step so it is necessary to care more about training quality as well as recruitment As far as I concerned, workers need to be trained well and encouraged to stay and grow with company Figure 2.11 at chapter is considered as evidence revealing that the longer time they work in Mascot the more experience they have and less mistake they get As the result, company could take advantage from their experience instead of wasting time for training the new employees and correcting their mistake Although inspecting fabrics is not a very difficult task and workers have great working environment in the BWH, it is required them to stand and watch carefully to make sure that all defects on fabrics rolls were caught and marked According to this feature, human resource department should recruit candidates who have strong brain and be healthy In addition, training process also should be considered Workers need to be equipped knowledge about all the consequences that will happened if they not concentrate 100% on their job and create the errors This is the first step to make them have awareness and responsibility in the job Moreover, the whole process of inspecting fabrics should be trained and reminded frequently It is necessary to allow high experience worker cooperate and support for the new one during the inspecting time On the other hand, the new worker should be encouraged to catch the errors of the high experience worker This is not only the way to help the new one remember inspection process but also reduce the errors of the others Those are some recommendations to contribute to reduce the human mistake in this step ii Tran ThiThuy Duong-GMA 02 Page 38 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam 3.1.2 Automated process It is necessary to have automated process or a special machine in unloading cargoes from containers Mascot is very big company and has invested huge amount of money on facilities and equipment Nevertheless, this research still gives an idea to maintain high productivity of fabrics inspection process at light table This machine need to be able to unload the whole heavy fabrics ballet from containers then put it into light table area with the least number of workers involved This is just an idea but it deserves to have a consideration because if company develops and implements it, this solution would help to save time and effort of light table workers As expected result, Mascot may be able to maintain productivity and short lead time of inspection step even in the busy seasons 3.2 Recommendation on returning excess fabrics to offset stock and stock balancing step at Mascot International Vietnam 3.2.1 Human reassigning Mascot should recruit or assign one person to specialize in updating consumption as well as balancing stocks frequently At the present, supply chain department has responsibility for doing this task Nonetheless, because of the over workload at supply chain department they could not balance stocksfrequentlybut twice per year so until now there is no one focusing 100 percent on it That is the reason why problems have been occurring, especially with accessories If this task is done twice per year it will require several people to involve because the data of fabrics floware changed with the passing of time when making PO and DO activities are always implemented Moreover, those employees must have knowledge of the whole fabrics flow instead of a part of it As the expectation, they will be able to picture the reasons during investigating the real consumption In addition, they should have enough experience about stock balancing so that they will know what sources they should look for information to find outthe real consumption and balance stock correctly Those employees also have to remember all special situations in the entire year to find out the correct justifications for incorrect consumption in the short time For example, there was a case: workers ii Tran ThiThuy Duong-GMA 02 Page 39 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam made mistake during inspection step leading to BWH had to send 60 m of fabrics to production as compensation This information will be revealed on emails and maybe on the others sources so experience and knowledge is necessary Nonetheless, with this solution there are still some errors occurring unexpectedly in stock balancing It will be different story when there is a person taking full responsibility for stock balancing That staff not need too much experience about stock balancing He just needs to have knowledge about materials flow to know what sources he could investigate justifications for unbalancing in the stocks Furthermore, he must be informed whenever materials quantity is changed so he should arrange them in the smart way.In fact, this task is not necessary to every single day so he also can the other task that relates to consumption such as updating information on SAP If this idea is implemented the problem as overloading or missing information will be reduced By this way, balance stock will become an easier task to As the expected result, number of errors will be eliminated 3.2.2.Creating new transaction on SAP system It is necessary to create a new transaction considered as a summary for required information which will be used for stock balancing on SAP system Accurate data need to be shared among related departments in order to serve stock balancing task It is needed to have close cooperation among departments, especial production and supply chain department because there are huge amount of information transferred within company In order to that, each related department should manage their files of information carefully It is likely that the data of used fabrics that production department recorded is the most corrected compared to the other source as the explanation in chapter II That is the reason why staff that will be in charge of balancing stock should capture this data In order to that, on Mascot’s SAP system a new transaction as the summary for materials quantity that used in producing process should be created In fact, Mascot is very big company with state-of-the-art SAP system that control from the beginning when the materials were received from suppliers until the final products were exported oversea On SAP system, company already created a transaction that allowed production staff to add the information relating to fabrics ii Tran ThiThuy Duong-GMA 02 Page 40 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam quantity which was cut for producing such as total used of fabrics, net length and so on However, in order to make the balancing stock become less complicated and more accurate to in the short period of time, the new transaction should be linked with this available transaction of production department As the result, responsible employees will not need to waste time for investigating the justifications for unbalancing of stocks in too many resource but just look at this new transaction for accurate data This is just an idea to reduce disadvantages of this step It is need to be developed and tested with real situation before applying ii Tran ThiThuy Duong-GMA 02 Page 41 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam CONCLUSION Mascot Vietnam plays a very important role in development of Mascot International A/S In order to operate efficiently this branch, parent company should control fabrics flow which run through the whole company Although those two stages have been improved and bring several advantages for company, there are weak points needed to consider.As doing research, the major errors of those steps are human mistake, data transfer and lacking of automated process The purpose of this research is to describe, reveal advantages as well as disadvantages of two steps inspection and returning excess fabrics to offset and stock balancing In addition, research also mentions about reasons for those drawbacks and gives recommendations on it There is no guarantee that all ideas given by this research will be able to address current problem successfully because of time limitation but they may contribute to it In summary, there are three chapters in this research Chapter one is theories that based on the reliable resources about related information for this research, followed by chapter which is the evaluation of company Last but not least, all the recommendation to reduce the current drawbacks in two major steps of fabrics flow will be revealed As the expectation, this research will contribute to eliminate Mascot’s weak points and make company become stronger and more developed in the near future ii Tran ThiThuy Duong-GMA 02 Page 42 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam BIBLIOGRAPHY Cooper, Martha C and Lisa M Ellram (1993) Characteristics of Supply Chain Management and the Implication for Purchasing and Logistics Strategy The International Journal of Logistics Management, 4, 13-24 Cooper, Martha C., 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Retrieved http://www.investopedia.com/terms/s/supplychain.asp Tran ThiThuy Duong-GMA 02 from Investopedia: Page 44 ... fabrics into offset stock and stock balancing at Mascot International Vietnam CHAPTER 2: Materials inspection process and returning excess fabrics into offset and stock balancing at Mascot International. .. iii Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam 2.3 Evaluation and justification... 20 Recommendations to improve materials inspection process and returning excess fabrics into offset stock and stock balancing at Mascot International Vietnam 2.2 Introduction of materials inspection