Giải pháp ứng dụng công nghệ thông tin vào công tác quản trị tại vinamilk giai đoan 2015 2020

SITUATION AND SOLUTION OF IMPROVED EFFECTIVE MANAGEMENT OF IT APPLICATIONS IN VINAMILK FOR THE PERIOD 2015-2020 I General introduction about Vinamik: Vietnam Milk Joint Stock Company was established following Decision No 155/2003QD- BCN dated October 1, 2003 of the Ministry of Industry for converting Vietnam Milk State Enterprise to Vietnam Milk Joint Stock Company converted dairy company Vietnam Dairy Products Joint Stock Company Vietnam - Full name: Vietnam Milk Joint Stock Company - Abbreviated name: VINAMILK - Logo: - Head Office: 36-38 Ngo Duc Ke, District 1, Ho Chi Minh City - Office for transaction: 184-186-188 Nguyen Dinh Chieu, District 3, Ho Chi Minh City - Telephone: (+08) 49300 358 - Website: www.vinamilk.com.vn - Business field: Fax: (+08) 49305 206 o Manufacturing and trading canned milk, powdered milk, nutrition, bread, fresh milk, soy milk, soft drinks and other dairy products; o Sales of food technology, equipment and spare parts, supplies, chemicals and materials; o Housing business, broker for real estate and leasing, business in warehousing, parking, business in automobile transportation, loading and unloading goods; o Manufacturing and trading alcohol, beer, beverage, food processing, tea, roasted coffee; o Manufacture and sale of packaging, print on packaging; o Manufacture and sale of plastic products; o Clinic • Vinamailk business strategy: In the past years, despite the competition of dairy products in country and abroad, Vinamilk with its effort maintain its leading role in the domestic market and effective competition with foreign milk brands Revenue of local increased annualy at average of 20% - 25% According to a vote of 100 most powerful brands in Vietnam (organized by Saigon marketing magazine), Vinamilk is the number one food brand of Vietnam, leading market share, is trusted by consumer and consecutively voted top a TOPTEN Vietnam high quality goods One of Vinamilk’s success is a diversification of products to meet the needs of all customers from infants, children, adolescents, adults and those with special needs Total revenue (Billion VND) Profit before tax (Billion VND) Picture 1: Sales result of Vinamilk from 2009-2013 • The advantaged competition of Vinamilk comparing to other firms in the industry: - Vinamilk brand name become familiar with the consumer; - The Vinamilk’s products are diverse, many kinds of products to meet the needs of many different ages; - Vinamilk has large-scale production with dairy system across throughout the country; - Modern production technology, applying international standards; Vinamilk FieslandCampina Nestlé Others Hanoi milk Mead Johnson Picture 2: The market share of dairy enterprises in 2013 II Application of Information Technology in Vinamilk: Today, Information Technology (IT) is present and plays an important role indispensably in the process of administration, governance of the business operations in each corporation The development and application of the Internet has changed the models and business activities of enterprises, the shift from traditional transactions to electronic transactions have affected the position, role and the needs of all related parties (customers, suppliers, investors ) Model for Application of Information Technology in Vinamilk during the period 2015-2020: The IT investment activities in corporations serve the business goals such as support for operational activities, support for management decisions, support the development of strategies to achieve beneficial competition, There are many models for IT investment in corporation, each model has different approach but all share the goal that to help corporation to identify investment route and the relationship between the components in the overall picture of the application of IT in business Each corporation needs to choose their own appropriate IT investment model to promote efficiency investments to serve business objectives and match fishing capacity of business technology IT investment model in communications Board of Vietnam Textile & Garment Corporation can be combined in different stagest: investments of IT infrastructure; enhancement of operating applications; application for comprehensive capacity and production management; Investment to transform business and create competitive advantage internationally At each stage, it has specific objectives and follow the fundamentals of IT investment that investment must be consistent with the business objectives of the enterprise; investment must be effective; sufficient investment for people to use and promote investment in technology Stage 1: Investment of IT infrastructure This stage is initial investment of business on IT including equipped basic hardware, software and human resource “Basic” level could be in-consistent, however, it should meet some major requirement about IT infrastructure (hardware & software) such as: computers, LAN, WAN network, Internet connection, communication environment between departments internally and partners; human should be trained to use the basic IT infrastruction and apply it for management of corporation’s business so that the “background” could be established for next IT investment stage Stage 2: Enhancement of operating applications The objective of this stage is to improve IT investment performance, support for functional department in corporation, namely activities of functional departments or work groups as assigned This is a natural development of most businesses, because the volume of information to be handled increases, and having necessary skills for application of IT in the previous stage The investment to automize operational processes for improving business performance such as to deploy applications to meet each field operation and to expand on-demand business; financial accounting program, human resource management, other functional applications Stage 3: application for comprehensive capacity and production management If stage is considered as partial digitalizer, stage shall be whole digitalizer of business Transforming from partial to whole digitalizer is the most issue of this stage Regarding IT infrastructure, it needs wide area network covering business, ensuring the smoothy information flows between departments, parts; Integrated software and databases throughout the company are the key tools for the support and operational management; deployment of synchronous solutions help companies change the internal quality management, improve operating capacity, improve efficiency and increase competitiveness as ERP, SCM, CRM, Digital Culture which is built and gradually developed in two stages before has became reality good, contributing to the culture of the enterprise business, which is the standard foundation work, the size measure new job, the system of rules and tools to ensure the full implementation of the standards in the enterprise Stage 4: Investment for transforming business and creating competitive advantage internationally This IT investment stage is to achieve advantage competition in the modern business environment, ie investment in IT products and services to create cost advantages, to make up the difference, and the other products in accordance with the competitive strategy of enterprises Currently, the business issues in the Internet age, specifically, the use of technology and Internet services in business, have a decisive role: building an intranet to share information inside enterprise, extranet to connect and selectively share information with partners, suppliers, customers Using Internet to form relationships of e-commerce such as B2B, B2C and B2G Inheriting strength on the basis of data and business processes that have formed in business to raise the business to higher level, global business IT is an effective tool in the implementation of business strategy Current status of the application of Information Technology in Vinamilk: National Information Technology Committee has surveyed the application of information technology in 217 companies and the results has made a surprise to all peoples Currently, Vietnam enterprises have invested only a small cost ranging about 0.05-0.08% of revenue for information technology, while the average number is 1.5% in the U.S Investment policy for the information technology is still insufficient Most enterprises have invested only once for information systems and upgrade applications, thus it is low investment and its performance is even lower The survey also showed that up to now there are still some enterprises having any applications of information technology Among state enterprises, they are about 10%, while other business components, there are up to 60% which have not applied information technology in their work 40% of enterprises have not strongly invested in information technology because there are enough qualified staff to manage and exploit Enterprises have initially aware of the importance of information technology but the numbers where can now applied deeply capabilities of new information technologies are still small numbers It is not surprise that the most important programs, the most widely used in the enterprise are financial and accounting management Approximately 88% of enterprise applying information technology application uses financial accounting software, but only about 20% of the software satisfies their needs In Vinamilk: • Procedure for management of input and output is completely manual and this has led to a number of consequences, such as excessive inventory while the output is too slow consumption or the use of machinery and workers have not reached full capacity all these things have caused costly in the manufacturing process of vinamilk, directly affect the company’s profitability • Procedure for control of manufacturing, order processing, cost accounting is not uniformity causing the increase of production costs, warehousing costs, inventory • When tanking into account, manual accounting often have encounter errors as employees always With manual account, Vinamilk’s managers have not easily checked steps and processes The amount of paperwork is large, in many cases it is unavoidable loss or damage • Vinalmilk’s System of Information distribution is majorily executed between the Company and the Agent Role of IT application in enterprise: So far, companies have acknowledged that IT has contributed significantly to their development In addition to keeping records, documents, Companies also use IT in enterprise management, rapid reporting and exchange with partner Use of IT in online businesses has been applied in enterprises in developed for many years, however it is not common in Vietnam Selling online not only saves labor but also the cost over the traditional way of selling While the company has to consider cutting maximum expenses but they need to spend a lot for selling products following trandition way, this issue need to be well study and consideration by the company • Information Technology & The fundamental change in business: Globalization in the 1990s gave an important social trends that is the transition from industrial society to a knowledge society which information and keep critical role Today, the development and application of IT has forcasted a new era of great social change IT is likely a common technology in all areas - economic society IT will change the market conditions and the position of the partners in the supply chain structure Consumers will keep essential important role in this whole chain This will have a tremendous impact on the structure inside and outside of the company Moreover, when labor is mainly based on the knowledge, the content and its form will change IT trend to blur the border, not recognizing the isolation, open space for a wider variety of creative participants Therefore, IT applications is creating the new game, with new rules, forcing participants to accept The pressure of this type of business must have quite big impact to Vietnam enterprise business operation IT as a challenge as well as an important technology shall promisively help businesses rapidly integrate Vietnam into the global economy IT will be a major resource to create important breaks of Vietnam economy - the economy 97% of GDP from SMEs, to find their place in the global competition The problem is to find the direction to the path to IT penetration, spreading fastest in SMEs, improving the competitiveness of SMEs • Information Technology – an improvement in tehcnology: Based on the improvement process, it can divided into the improvements on the basis of knowledge, new technology, also known as the tech improvements, and improvements based on exploitation of existing technologies called extended and improved exploitation Improved technologies relates to improving both product technology and process improvements This distinction is important, because: Firsly, it helps acutely aware of the relationship between additional product enhancements and process Secondly, improvements generally have greater influence with the system of social technologies and innovative perspective Thirdly, between acceptance and application of improvement and product have differences This suggests that awareness of the specific conditions, the implications of innovation is a prerequisite for the acceptance and application, the successful application of innovative products or processes We will insist on process improvements through information technology, because the improving processes is essential for the professionalisation of the industry in the long term and therefore, it contributes to improving competitive position of SMEs to large enterprises Moreover, most SMEs lack the necessary knowledge about strategic application of process improvements such as information technology • IT create competitive advantage for enterprise: During more than 40 years, the use of information technology in manufacturing systems and services has made great changes The first applications of IT in the 1960s focus the advantages of efficiency in the management process With information technology, the traditional calculation is done faster, more reliable and more accurate The relatively cheaper machines will replace human labor To date, IT has very extensive intrusion into the business process, not just the manufacturing automation and flexible manufacturing, the development of management information systems become decisive support system bringing more and more competitive advantage to the organization An overview, competitive advantage can be seen in three ways: − Product Development: offering new products or services on the market Technologies such as automated production lead to improved product or service packs − Market development: ie to reach new markets with present products or services With the use of applications such as telemarketing, it can reach new markets through new distribution channels − Diversification: offering new products or services in new markets Through the application of information technology and add more on such product or service creating a new service for existing customers This service can also attract to organizations that can penetrate new markets Customers increasingly require timely deliveries with high quality This requires integrating automated flexible manufacturing, with automatic management Specially, Internet plays a key role in this process The network is beyond the limits of an organization, aims to optimize across disciplines, or fields of supply chain This type of improvements makes it possible to serve customers more frequently for more suitable products, more reliable, faster Customers will increasingly become the focus of activities in the supply chain Supply chain will have nearly the same characteristics of the old manual system, but information technology allows production to meet customers more effective For this purpose, the organizational structure of the enterprise was transformed into the less structure; more flexible with staff having sufficient training, the new type of labor which is more independently also appear The partners in the supply chain have different functions and their relationship became closer and often in the form of the cluster Because of the changes in the supply chain, SMEs can not grow beyond the improvements due to the application of information technology III Solution for application of ERP in Vinamilk: Curretn status of deploying ERP in Vinamilk: In order to meet the increasing demands of consumers, in recent years, Vinamilk has un-interuppedly innovated technology, invested machinery and modern equipment, advanced management and quality products In 1999, Vinamilk has successfully applied the quality management system according to international standards ISO 9002 and is currently applying quality management system according to international standards 9001:2000 - the latest version of the world Besides, Vinamilk has also strongly invested in information technology and currently successful applications of software for business administration Oracle EBS 11i ERP, SAP CRM software (System Customer Relationship Management) and BI (reporting system) 1.1 Current status of Technology: • Application of ERP in distribution process for Vinamilk’s products Management of distribution channels is always the challenge for businesses The system can operate efficiently not only helps manage the process closely, providing extensive services, but also timely approach quickest consumers to create competitive advantage in the market of business 10 Due to IT applications, Vinamilk has effectively managed product distribution channels Vinamilk is currently applying three international ERP solutions including Oracle, SAP and Microsoft How to master and integrate all three solutions? Picture 3: Integrated information system ERP • Change the distribution process Vinamilk is one of few Vietnam enterprises applying management solution for customer relationship (CRM-Customer Relationship Management) by SAP This project is the second phase of ERP implementations of this company After eight months, the second phase of the ERP project has been accepted to the core (SAP CRM) after 11 deployment to more than 40 distributors and expects all the other distributors will be integrated into this system - Before having SAP CRM system: Information about Vinamilk distribution was mannualy collected between the company and the agent • At Current: System of information for report and decision serving leadership (Business IntelligenceBI) is set in the center to manage distribution channels and sales promotions The distributor can be connected directly to the transmission system through the Internet using SAP program, or in the form of offline connection using Microsoft Solomon Software Agents using software are developed by FPT for PDAs to record the transaction The sales staffs using PDA connect to the distribution system in order to update the information The program has helped CRM system in the company's distribution channels through software applications This process supports staff to enhance capability, professionalism and ability to capture the best market information through the use of shared information across systems.Vinamilk has also managed the price, promotion in the distribution system Meanwhile, the enterprise’s objective is an important end-customers who also are beneficial from the increase of gradually improved quality service • Application of ERP in accounting 12 When taking account, manual accountant of Vinamilk often encounter errors that employees always With manual account, Vinamilk’s managers have not easily checked steps and processes From the specific reasons, Vinamilk has found solutions to overcome a situation effectively by using information systems ERP HR Salary Purchase Debt Cash Warehouse Purchase t Fix Assets Debt Fix Assets Sales (ERP application model in service field) With host system running SAP CRM software in the center, the database is managed concentratively (Master Data), intergrated following standard of daily data from distributors, from slaesman’s handheld mobile PDA system A information system focus on reporting the inventory status, goods, sales, liabilities… of each distributor On this basis, the staff at the center can analyze the situation of consumption to make the processing direction, targets and distribution plans as accurate as possible 13 SAP System is built based on the SAP NetWeaver technology platform In Vinamilk, NetWeaver integrates information from ERP systems using Oracle EBS along with Solomon system used by distributors and application on PDA for sales staff These three applications are integrated into the system NetWeaver (BW-Business Warehouse) to serve for intelligent reporting system, helps leaders to have accurate information about the situation and online operations across the national 1.2 Process status: ERP systems using Oracle E Business Suite Oracle provided by Pythis and commenced from 03.15.2012 comprise of financial - accounting, procurement management - sales management, management production and analysis of operating results (Business Intelligence - BI) The technology transfer takes place across the Vietnam Dairy Products Joint Stock Company - Vinamilk with 13 locations, including its headquarters in Ho Chi Minh City, warehousing and enterprise branch plants across the country The process of implementing ERP in Vinamilk has main stages So, there is situation in whole Vinamilk company that some organizations hae used vinamilk have used ERP, some have not Therefore, there is a problems arose in the reporting system, company operation Besides the three main ERP modules, Vinamilk also receive a software system 14 to extract intelligent data BI (Business Intelligence) Pythis has programmed on 300 forms of Vinamilk’s reporting process This is a large intellectual property resulting from the project The splitting process helps companies access the system easier, resolve arosen problems with related parties, help for the next extension scales, more application of new technology minimizing the risk, more smoothly and successfully Surveying the description of current process has been conduted as follow: Vinamilk IT Department was established with 26 staff dividing into several groups: computer support, network group, server database group, the programming team and Solomon support group (Solomon is a microsoft software) The process of implementing ERPf follow ERP’s standard processes which are widely applied in production and trade enterprise under the enthusiastic help of the deployment Pythis, an independent consulting firm KPMG, Oracle solution providers and has been particularly facilitate maximum from vinamilk leadership 1.3 Current status of human resource: The company has a plan to deploy trained manpower to operate the system by sending a highly qualified, competent group for training Leaders create motivation, confidence for staff, and for a common goal along with the rules, mental discipline in compliance with operating procedures Regarding the company’s organizational structure, beside enhancement of employee’s knowledge, the system has met the needs of the user The management becomes easier and controllable 1.4 Budget status: To implement ERP systems, the enterprise must determine to arrange a big budget The largest expenses in the budget are for implemention of ERP Estimation of cost items will help ensure the implementation progress and quality, otherwise, it will be easy to get 15 loss expenses Cost for ERP software includes many categories, depending on the deployment However, the basic cost is usually for licensing costs, deployment support, consulting, and maintenance, operation of the system and cost of IT infrastructure in general applications such as hardware, network infrastructure Currently in Vietnam, there are only large, stable operation enterprises could spend huge budget to invest in such building this ERP system Most other small and medium enterprises in Vietnam have not yet deployed it From 2012 to now, Vinamilk has invested for IT system totaling U.S $ million (A large amount of which is invested in ERP systems) Comment about Vinamilk’s deployment of ERP: 2.1 Received interest and sucess: After months of operation across the company ERP, Vinamilk could preliminary conclude about effective applications The system helps companies to control operation closely, avoiding risk in accounting; with clear decentralization, accounting have better operation more than before The management of warehouse, distribution and administration of the business, customer relations and production has been better managed, significantly reducing risk; there is better operation and coordination between sales and distribution; monitoring are carried out following correct and real time IT staff qualification in Vinamilk have improved ever than before IT infrastructure is consolidation, synchronization, standardization and consolidation From 2012 to now, Vinamilk has invested about $ million (including ERP) for IT system and confirmed that by deep and widely investment, Vinamilk has capacity to absorb large solutions Vinamilk has particularly successes in the distribution channel The distributors can connect directly to the transmission system through the Internet using SAP program, or in the form of offline connection using Microsoft Solomon Software Agents using FPT software are developed by FPR for PDA to record the transaction The sales staffs using PDA connect to the distribution system in order to update the information 16 We have also unified the business processes with distributors in accordance with the distribution requirements such as pricing management, promotion, distribution plans, and SOPs for sales staff with PDA 2.2 Some weakness: Lack of human resources: When deploying ERP, human resources take a top priority Not only Vinamilk but also almost all enterprises deploying ERP have difficulty in staffing issues Especially lacking staff having ERP knowldgement That's why most businesses have to send staff for training Large investment costs: Although, Vinamilk is one of leading and big enterprises in Vietnam, ERP is still an expensive system for enterprises and Vinamilk has spent a large expense for this investment 2.3 Experience of deployment: • Difficulty Although Pythis is a specialized business providing software solutions in Vietnam, Pythis’s ability to supply entire ERP process for Vinamilk is not enough It could be seen that being a leading supplier, Pythis’s human resource, technology and capability are limit Pythis is a stragetic partner of Oracle in Vietnam but for the purpose of using all Oracle capability in big enterprise of Vinamilk is not realistic Therefore, Vinamilk has purchased software solutions from both Oracle and SAP to complete technology management capabilities at a high level Vinamilk may want to buy Oracle solutions for core management competencies and personal CRM (Customer Relationship Management) SAP to strengthen customer management capabilities at the highest level The input data from customers and suppliers is updated by staff receiving documents from partner employee Therefore, there are latency and inaccuracy Cost for investment of ERP and put it into operation is relatively large for not only 17 not only hardware, but also software human capacity The hardware system needs to be greater investment in oder to be capable of running all modules Software system is also regularly updated to the latest version for the most effective management Once the hardware and software system can be purchased, the other important issue needs to be mentioned is human to operate that systems If Vinamilk want to use the ERP system, it must not only invest in infrastructure but also to focus on human resources having sufficient qualification to implement the system This human resource is not only understand about Vinamilk business but also having capability to operate system Therfore, Vinamilk must train staff to have enough qualification to use the system and create a chance for staff to practice on real systems so that they could accumulate more experience to achieve the highest efficiency when using systems Deployment of CRM and distribution for vendor are the other module different from the central core module of Vinamilk purchase Profession has reached to control market, personnel capacity, competitive control of enemy It's so strange to deploying employees and consultants of ERP In addition, Vinamkil is simultaneously applying three international ERP solutions from Oracle, SAP, and Microsoft Therefore, how to combine them effectively is also a challenge • Reason for sucess - Strong commitment and support of Vinamilk’s leadership - Vinamilk has arranged specialized staff to participate in project implemetation - Vinamilk IT team has worked professionally and procedure complied - In addition, the project is supported by the production management system of Vinamilk, provider of Oracle solutions and an independent consultant firm KPMG - Main experience shared by Pythis is that involved parties (Pythis vinamilk, Oracle 18 and KPMG) clearly defined objectives but does not go into too much detail on unimportant matters Concurrently, there are always people who could solve problems that arise incidentally References: [2] Dr.Tran Thi Song Minh, 2012 Management Information System Ha Noi National Economy University Publisher Website: http://www.vinamilk.com.vn/?vnm=DownloadFile&m=5 19 ... result of Vinamilk from 2009-2013 • The advantaged competition of Vinamilk comparing to other firms in the industry: - Vinamilk brand name become familiar with the consumer; - The Vinamilk s... marketing magazine), Vinamilk is the number one food brand of Vietnam, leading market share, is trusted by consumer and consecutively voted top a TOPTEN Vietnam high quality goods One of Vinamilk s... (customers, suppliers, investors ) Model for Application of Information Technology in Vinamilk during the period 2015- 2020: The IT investment activities in corporations serve the business goals such