QUẢN TRỊ HOẠT ĐỘNG tại CÔNG TY cổ PHẦN sữa VIỆT NAM VINAMILK en

QUALITY STANDARD AND MAJOR PRODUCTS 6 III.1 Regulation of milk processing and product from milk 6 III.1.1 Legal regulation 6 III.1.2 Applicable Specification and standard 7 III.2.. Quali

OPERATION MANAGEMENT AT VIETNAM DIARY PRODUCTS

JOINT STOCK COMPANY (VINAMILK)

II.3 Factories and stores of Vinamilk 4

II.4 Dairy Farm 5

II.5 Organizawtion chart of Vinamilk 5

II.5.1 Chart of organization structure 5

II.5.2 Chart of management structure 5

II.5.3 Existing shareholder structure of Vinamilk 6

III QUALITY STANDARD AND MAJOR PRODUCTS 6

III.1 Regulation of milk processing and product from milk 6 III.1.1 Legal regulation 6

III.1.2 Applicable Specification and standard 7

III.2 Quality standard system of Vinamilk 8

III.2.1 Management standard and safety, sanitation 7 III.2.2 Standard of environment 8

III.2.3 Standard of technical properties of the products8 III.2.4 Other technical standards 9

III.3 Major products of Vinamilk 9

III.3.1 Market of Vinamilk 9

III.3.2 Major products 11

IV PROCEDURE OF MANUFACTURING MAJOR PRODUCTS OF VINAMILK 11

IV.1 Procedure of fresh milk production 11

IV.1.1Chart of technologh process 11

IV.1.2 Procedure of production 12

IV.2 Production procedure of powder milk 14

IV.2.1 Chart of technology process 14

IV.2.2 Manufacturing procedure 14

IV.3 Manufacturing procedure of Yogurt 16

IV.3.1 Chart of technology process 16

IV.3.2 Manufacturing procedure 17

V LONG TERM TARGET FOR PRODUCT QUALITY IMPROVEMENT 18

V.1 Concept of long term target 18

V.2 Concept of the product quality 18

V.3 Status of product quality of Vinamilk19

V.4 Long term target of Vinamilk product quality

improvement 22

VI PLAN OF LONG TERM TARGET PERFORMANCE 24

VI.1 Long term target of Vinamilk 24

VI.2 Plan of long term target performance 24

VII DIFFICULTIES, CHALLENGES AND COUNTERMEASURES 28 VIII CONCLUSION 33

1/34

I PREFACER

2/34

The enterprise operation management is the necessary management technical system

to be conducted synchronously by the enterprise managers so that the enterprise canreach the proposed strategy target The study of this system is required to closely contactfrom the scientific theory to the existing operation of a detailed enterprise so that thelearner gets the synchronous knowledge and the full awareness of the importance of thescience of the operation management in managing, executing an enterprise

From the above mentioned demand, in this material, the group 4 refers to theoperation management in Vietnam Diary Products joint stock company (Vinamilk)mentioning the long term target for improving the product quality of the company; theplan for the long term target performance and difficulties, challenges, countermeasuresupon conducting the long term target of the company

II INTRODUCTION OF VINAMILK

II.1 General 1

Vietnam Diary Products joint stock company (Vinamilk) has been established since

1976 under the name of Southern Coffee-Milk company This is a state run enterprisedirectly under General Department of Food During the development process, after manyreforms, Vinamilk became Vietnam Diary Products joint stock company in the year

2003 The transaction name in English is VIETNAM DAIRY PRODUCTS JOINT

STOCK COMPANY abbreviated as Vinamilk

The company has been sealed on Ho Chi Minh city stock exchange transaction floor

on 19 January 2006 (transaction code: VNM) At present, State Capital Trade andInvestment Corporation (SCIC) holds the ratio of 45,05% for the company chartercapital

Vinamilk is the topping enterprise of the milk processing industry accounting for75% of the milk market in Vietnam The products of Vinamilk includes the fresh milk,yoghurt, condensed milk, powder milk, nutritious milk, cream, various soft drinks Withthe diversification of the products, Vinamilk appears over 200 sterilized, pasteurized milkitems, and milk-made products

On 31 December 2012, Vinamilk has the network with 250 exclusive distributorsand over 200,000 retail points in Vietnam The Vinamilk products are exported to 26countries like America, France, Canada, Pháp, Canada, Poland, Germany, Middle-Eastregions, ASEAN etc

1 Summarized from website www. vinamilk com.vn/ and annual report of VNM 2012

3/34

After 36 years since the establishment and counted to 31 December 2012, Vinamilkhas invested 12 plants, 2 factories in which Vietnam Children power milk factory is putinto operation on 22 April 2013 and milk factory constructed by Tetra Pak group –Swedish in Binh Duong and operated on 10 September 2013 Vinamilk is executing themilk factory in Cambodia in 2014

During 17 years, from 1997 to 2013, Vinamilk is ceaselessly selected as the highquality Vietnam goods by Vietnam consumers’ association.2

Vinamilk joins the charitable activities, society in the fields: Setting up Vietnamreaching Milk Fund, providing milk for all children of the difficulty; establishing Vinamilkscholarship fund “Nursing the young talented”; Setting up 1 million of green plants forVietnam and sponsoring the solar energy lights at Con Dao

At present, Vinamilk has got the 68th rank of the world biggest 100 milk enterprises.The target of Vinamilk in the next stage is to get turnover of 3 billion USD in 2017 andTop 50 enterprise of the world milk

Business field: Food and Beverages;

Major products: Milk and milk-made products

Manpower : 4,300 persons

Website: www.vinamilk.com.vn

Email: vinamilk@vinamilk.com.vn

Logo of Vinamilk:

2 According to website http://congthongtinhvnclc.vn/ - Enterprise Association of high quality Vietnam commodity

3 Theo website www. vinamilk com.vn/ and annual report of VNM 2012

4/34

Figure 1: Logo of Vinamilk

II.3 Factories and stores of Vinamilk 4

Factories:

3) Dielac Milk factory – Bien Hoa I Industrial Park, Dong Nai

5) Sai Gon Milk factory – Tan Thoi Hiep Industrial Park, District 12, HCM city

An

city, Binh Đinh

8) Vietnam Soft Drink factory – My Phuoc II Industrial Park, Binh Duong province

9) Tien Son Milk factory – Tien Son industrial park, Bac Ninh province

11) Vietnam Powder milk factory - 9 Freedom Boulevard – Việt Nam-Singapore Industrial Park, Thuận An district, Binh Duong province

12) Vietnam Milk factory – My Phuoc II industrial park, Binh Duong province

Warehouse:

1) Depot enterprise – No 32 Đang Văn Bi, Thủ Đức district, HCM city

2) Hanoi Depot enterprise – Km 10 National road 5, Dương Xa town, Gia Lâm district, Ha Nội

Clinic :

1) An Khang General Clinic - 87A CMT8, District 1, HCM city

II.4 Dairy farm

1) Dairy farm in Tuyen Quang;

2) Dairy farm in Lam Đong;

4 Vinamilk – Incorporated finance report, year 2012

5/34

3) Dairy farm in Binh Đinh;

4) Dairy farm in Nghe An: the rest cell of cows is laid with the soft mattress, auto milking with the « super-cleaned » technology”;

5) Dairy farm in Thanh Hoa

II.5 Organisation chart of Vinamilk

II.5.1 Chart of organisation structure

Figure2 : Organization chart as per the function

II.5.2 Chart of management structure:

II.5.3 Shareholders’ s existing structure of Vinamilk 5

5 According to website: http://s.cafef.vn/

6/34

Figure 3: Shareholders’ structure

III QUALITY STANDARD AND MAJOR PRODUCTS

III.1 Regulation of milk processing and milk- made products

III.1.1 Legal regulation

Vinamilk is an enteprised operating in Vietnam Therefore, the prerequisitecondition of Vinamilk is to comply with the Vietnam legal regulations of the milkquality and milk products These regulations include:

- Law on Food safety No 55/2010/QH12;

- Law on Standard- Specification No 68/2006/QH11;

- Environmental protection law No 52/2005/QH11 dated 29 November 2005;

- Decree No 127/2007/NĐ - CP dated 01 August 2007 of Government specifyingthe details of implementing some articles of Law on Standards and technicalspecifications;

- Governemental Decree No 38/2012/NĐ-CP dated 25 April 2012 stipulating thedetails of some articles of Law on food safety;

- Circular No 30/2010/TT-BYT of Ministry of Health dated 02 June 2010 issuingthe national technical specification (QCVN 5-1:2010/BYT) to the products in the form

of liquid;

- Circular No 31/2010/TT-BYT of Ministry of Health dated 02 June 2010specifying the issuance of the national technical specification (QCVN 5-2:2010/BYT) tothe milk product of the powder form;

7/34

- Circular No 41/2010/TT-BYT of Ministry of Health issuing national technicalspecification to fermentation milk products;

- Circular No 05/2012/TT-BYT dated 01 March 2012 of Ministry of Health issuingthe national technical specification (QCVN 8-3: 2012/BYT) to the micro contamination

in the food;

- Circular No 26/2012/TT-BYT stipulating the issuance of qualified certificate ofthe food safety to the foundations of manufacturing, trading functional foods, nutritiousincreasing food etc

- Circular No 20/2012/TT-BYT issuing the national standard of the formularnutritious food for the children to 12 months ;

- Circular No 21/2012/TT-BYT issuing the national specification to forumularnutritious products with the medical purpose especially for the children to 12 months ;

- Circular No 22/2012/TT-BYT issuing the national specification to the formularnutritious product with the supplementary eating purpose for the children from 6 to 36months old

III.1.2 Governed specification and standards

What is the standard 6

The standard is to specify the technical properties and the management requirement

as the standard to classify, evaluate the products, goods, services, process, environmentand other objectives in the economic-social activities to improve the quality andefficiency of these objectives

What is the technical specification 7

The technical specification is to specify the limit of the technical properties and themanagement requirement in which the products, goods, services, the process,environment and other objectives in the economic-social activities have to comply with

to ensure the safety, sanitation, health of the human being, protecting the fauna, flora,environment, interest and national security, rights of the consumers and other necessaryrequests

III.2 The quality standard system of Vinamilk 8

6 Source : Law on Standard- Specification No 68/2006/QH11

7 Source: as above

8 Source : http://www.vinamilk.com.vn

8/34

The governed quality standard system in Vinamilk includes Vietnam andinternational standards These standards include the management standard, standard ofenvironment, food sanitation standard and standard of technical properties of theproducts

III.2.1 Management standard and safety, sanitation :

Vinamilk applies the quality management and control system of ISO-9000-2008;

Vinamilk applies HACCP as a system to control systematically the factors affecting the food safety HACCP is abbreviated by Hazard Analysis and Critical Control Point

This is the principle and analyzing method of the risks to the food safety developed byCODEX Commission (established by FAO and WHO organizations) On the foundation

of these principles, the countries and regions have developed HACCP standards inaccordance with their management requirement In Vietnam, issued HACCP standard isTCVN 5603:1998 (this standard is totally equivalent to CAC/RCP 1 - 1969 of CODEX)

At present, Vinamilk applies HACCP RvA standards of Netherlands.

The factory ratio gets the certificate of HACCP and ISO 9001: 2008 is 10/11factories Danang factory completes the construction and is put into operation since theend of the year 2012 In the year 2013, this factory is evaluated and issued with thecertificate 9

III.2.2 Standard of environment:

Vinamilk applies ISO 14001:2004 standards of the environmental managementsystem – Requirements and use guidance at their factories This is the standard in ISO

14000 set specifying the requirements of managing the factors affecting the environmentduring the operation process of the organizations, enterprises

This standards is used to construct and certify the environmental managementsystem according to ISO 14000 including 03 basic commitments requested in theenvironmental policy:

 Pollution prevention ;

 Legal conformance ;

 Ceaseless improvement of EMS system

III.2.3 Standards of the technical properties of the products:

According to law on standard- Specification No 68/2006/QH11, Vinamilk iscompulsory to comply with the national standards of milk and products from milk

9 Sustainable development report 2013 of Vinamilk

9/34

Vinamilk has announced the core value of “Complying with the law” and “ Respectingthe established standards…”10

Therefore, Vinamilk has to apply the national standard No QCVN 5-1:2010/BYT tothe milk products in the liquid form; No QCVN 5-2:2010/BYT to the milk product of thepowder type, and QCVN 8-3: 2012/BYT to the micro-pollution in the food

In addition, Vinamilk applies the standard TCVN: 7028:2002 Sterilized fresh milk –Technical specification 11 and Vietnam standards like TCVN 7405: 2004 – Raw materialfresh milk Technical requirement; TCVN 7108:2002 – Powder milk for the children to

12 months old – Technical regulation; TCVN 5538:2002 Powder milk- Technicalspecification etc

III.2.4 Other technical standards

ISO/IEC 17025:2005 is General Requirements for the competence of testing andcalibration laboratories ISO/IEC 17025:2005 is the standard of the quality managementsystem applied separately for testing laboratory and calibration issued by ISO(International Organization for Standardization)

Vinamilk applies ISO/IEC 17025:2005 for the product testing laboratory Thecriteria, limit and testing methods STNL of Vinamilk comply with the internationalstandards as FAO (Food & Agriculture Organization), FDA (Department of Food andPharmacy of America ).12

In short, at Vinamilk, a criteria grasped by the company is to comply absolutelywith the legal regulations of the management standard, safety, food sanitation ofVietnam, the international standards in the food trade (Codex) Thus, the products of thecompany have appeared at 26 countries in the world like America, Australia, Canada,Russia, Japan, Thailand, Korea, Philippines, Middle-East regions etc

III.3 Major products of Vinamilk

III.3.1 Vinamilk market

10 Annual report of Vinamilk 2012

11 Source: Product standard announcement No 12/2006/CBTC- VINAMILK dated 17 February 2006

12 http://www.vinamilk.com.vn and http://vietq.vn/

10/34

Figure No 6: Market of powder milk 2012

11/34

Figure 5: Market of fresh milk 2012 (Source:: Website Businessman world)

Figure 7: Profit structure of 09 months, 2012

III.3.2 Major products

In 2012, The fresh market of Vinamilk accounts for 45,5% of Vietnam market, the

1st rank Fieslandcampina takes the 2nd rank with 20,4% market The powder milk ofVinamilk makes up 19% taking the 2nd rank after Abbott (24%)

“Calculating the turnover and the capacity, Vinamilk is the top milk manufacturer inVietnam The product list of Vinamilk includes the major products of water milk andpowder milk; The plus valuable product like the condensed milk, eating yoghurt anddrinking yoghurt, cream and cheese”.13

“04 years ago, the condensed milk capacity manufactured by local companiedreached 312 million of boxes /year while the foreign companies producing it in Vietnamgot 92 million of boxes/ year The average growth speed of the condensed milk is10%/year However, in the phase 2009-2014, the growth speed is only about 3%, lowest

in the categories of the milk It is because most of the consumers in the city has used thefresh milk instead of the condensed milk

So, the market of the condensed milk has slowly grown up in the saturated mannerand it is not attractive and competitive among the brands anymore.”14

13 Source : http://www.vinamilk.com.vn/?vnm=about&id=37

14 Source: http://brandtalk.vn/68142011/sua-dac-co-bi-khai-tu/

12/34

In short: In the master strategy of the long term development, Vinamilk defines to

“concentrate on the main business branch of the milk production: Focusing on 04 major

based on the market and turnover structure, the profit from the milk and the product fromthe milk, we can conclude that the major milk product of Vinamilk is currently the freshmilk, powder milk and yogurt

IV MANUFACTURING PROCEDURE OF MAJOR PRODUCTS

IV.1 Procedure of fresh milk production:

IV.1.1 Chart of technology process:

Figure 8: Processing chart of Vinamilk fresh milk

IV.1.2 Production procedure

1) Raw materials: Milk is taken from the cow raised up by the natural grass ; notusing chemical fertilizers and no antibiotic injection The cow supplying thecleaned milk raw materials is raised as per the TMR method (Total mixingrotation) including fresh grass or sullen, honey leaked, bran, draff etc assuringthe nutritious substances to create a lot of milk with the high quality

15 Source: Annual report of Vinamilk 2012

13/34

filling UHT

fresh milk Raw material

Store

Processing

Pasteurizing milk fillin

Powder,

sugar, taste

Figure 9: Raising cow at farm of Vinamilk (Source: Annual report of 2012)

2) Milking: The whole auto milking line of Delaval firm helps the cow milk to runstraightly into the cooling system quickly from 37oC down to 4oC, assuring themilk is stored at the best before being taken to the manufacturing factory.Vinamilk Dairy Farm has the very special regulations to the staffs to help thecows to be the most comfortable For instance, during the milking process, thestaff has to switch off mobile phone not to cause noise, stress to the cows Upongetting in touch with the cow, absolutely be gentle, friendly and not makingnoise, scalding making them stressed;

3) Transportation: Within the limit time (24-48h), the milk tanks are transported tothe processing factories The supervisor accompanies by the transportation After the raw material fresh milk has been cooled lesser or equal to 4o C, themilk will be received by the specialized tank vehicle and transported to thefactory within 24-48h The transfer station has to send the representative toaccompany the vehicle to ensure the absolute safety of the quantity and quality

of the milk during the transportation process

4) Testing and classification: The milk is tested and qualified to process and store atthe temperature equals or lower than 40C at the store of the processing factory 5) Processing: The qualified milk for processing is moved to the filter to measure,weight, the cooling system, standard store tanks, milk standardization devices,milk assimilating equipment, UHT (Ultra High Temperator) This is theextremely high heating device, then extremely quick cooling This heatingprocedure will kill toxic bacterium, kinds of ferment mushrooms, mildew etc butstill keeps to maximize the nutrition and natural taste of the filtering and milkprocessing products

14/34

Figure 10: UHT system (Source: Website Businessman world http://cafebiz.vn)

6) Packing: Processed milk is transferred to sterilized machine system, the milkquality tests and brought to the packing line with the closed, modern, advancedtechnology from the developing countries like Sweden, America, Denmark,Netherlands, France, Germany, Swiss helping to assure the quality and safety ofthe food The canned milk product keeps the nutritious contents like vitamin andminerals from the fresh milk at the highest level

Figure 11: Packing line of sterilized milk of Vinamilk

7) Store Sterilized milk is transported into the normal store The pasteurized milk

is transported into the cooling store with the low temperature for protection

IV.2 Production procedure of the powder milk:

IV.2.1 Chart of technology process:

Figure 12: Vinamilk powder milk processing chart

admixtures Assimilation

packin g

PROCESSING

IV.2.2 Manufacturing procedure

Vinamilk powder milk processing factories have the closed technology line fromreceiving the raw materials to the product output All phases are automatic both increating the quality products and in assuring the food safety sanitation at the highestlevel In particular, the technology of Binh Duong powder milk factory is supplied byGEA/NIRO group and world top firms under G7, EU, Germany, America, Japan Thedrying tower is the topping modern multi-storey double tower with the diameter of13,6m, height of 32m in Asia

The whole processing procedure is supervised, controlled automatically to controlclosely the quality of the raw materials and finished products from the input to thecustomers exactly From here, the nutritious products with the high quality andinternational standards like Dielac Alpha, Dielac Optimum, Dielac Pedia and otherproducts will be manufactured for local and foreign markets

The production procedure of the powder milk includes the following steps:

1) Raw materials: The raw materials to manufacture the powder milk is the originalcream fresh milk or single milk The originally cream milk is the productsmanufactured from the fresh milk not adjusting the fat content The single milk

is the product manufactured from the fresh milk separated from a port of thefatness

2) Mixing admixtures: The admixtures in the powder milk production are used asthe stable substances (polyphosphate, orthophosphate of Na, K, Ca), lecithinecreating substance, anti-oxidization substance etc

3) The milk standardization process: In order to adjust the fatness content in theraw materials and to be carried out on the auto line including centrifugalmachine, mixing device, measuring tools (flow indicator, aerometer etc) pumpedinto the storage tank

16/34

4) The next step is the sterilization to reduce the micro content in the milk to thelowest level, concurrently invalidating the activation of enzymes, especiallysustainable enzyme group of lipase changing the nature of protein Thepasteurization is carried out at the temperature 750C, in about 30 seconds Thepasteurizing process of the milk is conducted on the heating exchangingequipment in the thin plate form

5) The condensate phase to separate water out of milk to save the energy for thenext drying process The condensed technology is done by vacuum method forthe products against the contamination, non-ruined fatness and vitamin

6) The assimilating process: conducted to reduce the dimension of the fatnessgrains and distributed evenly in the milk because the fatness content in the milkafter the condensed process is quite high

7) The next step is to dry the milk The products processed from the milkcondensed to the dry level of 35 - 40% is dried, grinded into the powder, seized,sifted into the milk at the powder form with the dryness 90 - 96%, moisture 4 -10% The drying technology line of Vinamilk is the spray drying

8) The powder milk after the spray drying will be passed to the sifting system andinto the packing equipment It is usually applied with the metal bags or paperbags to contain the products The common request of the package is to limit thecontact of the lights, air, and moisture from the ambient environment to thepowder milk The packing is usually applied in the vacuum condition or blowingthe mixture of 90% nitrogen, 10% hydro into the boxes before covering toextend the time of the product store

9) The production phase of the powder milk from the mix to the package etc iscarried out on the high auto equipment line

10) The packing powder milk is transported into the store of Vinamilk to supply forthe market

17/34

Figure 3: Robot (LGV) controls the whole production process at Vietnam Milk factory,

Binh Duong

IV.3 Production procedure of Yogurt

IV.3.1 Chart of technology process:

Figure 14: Processing chart of Vinamilk Yogurt

IV.3.2 Manufacturing procedure:

1) Raw materials: The powder milk mixed further with the sugar to get the content

8 - 10 %

2) Mixing: Milk powder, sugar, butter, stable substance mixed at the temperature

45oC for the evenly dissolving process

3) Heating: Increasing the temperature to 60oC to match the assimilation process;4) Assimilation: Conducted in the assimilation machine to create the high pressure

of about 200 bar by the piston pump system to demolish fat grains into the rawmaterials and dispersing different substance forming the synchronous mixtures

18/34

PROCESSING

Raw material

Hiding ferment implant down heating Assimilating 2 Pasteurizing

Cooling Filling tank packing cooling store Powder,

sugar, taste