Application of technology in the management of distribution system at habeco trading one member company limited

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN THU NGA APPLICATION OF TECHNOLOGY IN THE MANAGEMENT OF DISTRIBUTION SYSTEM AT HABECO TRADING ONE-MEMBER COMPANY LIMITED ỨNG DỤNG CÔNG NGHỆ TRONG QUẢN TRỊ HỆ THỐNG PHÂN PHỐI TẠI CÔNG TY TNHH MỘT THÀNH VIÊN THƯƠNG MẠI HABECO LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH HÀ NỘI - 2021 ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH - NGUYỄN THU NGA APPLICATION OF TECHNOLOGY IN THE MANAGEMENT OF DISTRIBUTION SYSTEM AT HABECO TRADING ONE-MEMBER COMPANY LIMITED ỨNG DỤNG CÔNG NGHỆ TRONG QUẢN TRỊ HỆ THỐNG PHÂN PHỐI TẠI CÔNG TY TNHH MỘT THÀNH VIÊN THƯƠNG MẠI HABECO Chuyên ngành: Quản trị kinh doanh Mã số: 8340101.01 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH NGƯỜI HƯỚNG DẪN KHOA HỌC: PGS.TS HOÀNG ĐÌNH PHI HÀ NỘI - 2021 DECLARATION The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it has not yet published in other’s research and article The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business, and the laws for above-mentioned declaration ACKNOWLEDGEMENT First and foremost, I would like to express my faithful acknowledgement to Hanoi School of Business, Vietnam National University (HSB, VNU) and all the members, lecturers and assistants for knowledge and experience that has been taught and shared through comprehensive and inspiring lectures, discussions and exams throughout MBA 13 course.” I would also want to extend my most sincere appreciation to my supervisor, Assoc Prof Dr Hoang Dinh Phi, whose vast knowledge and logical thought of business management in general and technology field in particular has brought great values and inspiration to me His sharing of knowledge and experience has encouraged and enable me to complete this MBA thesis.” On the other hand, I would not be able to complete this thesis in its most practical aspect without the strong support from my leaders and colleagues at Habeco Trading One Member Company Limited, who are though very busy with business issues but still spare their precious time and passion in responding thoughtfully to my interviews and survey.” Last but not least, I would like to grant my most heartfelt thanks to my family Without their encouragement and continuous support, I would have not been able to focus on completing on my thesis, which is one of my biggest achievement of the year.” Table of Contents ABBREVIATION i LIST OF TABLES ii LIST OF FIGURES .iii TITLE CHAPTER 1 Rationale Literature review Aims of research 4 Objects of research .5 Scope of research Research methodology .5 6.1 Research process .5 6.2 Data collection 6.2.1 Secondary data 6.2.2 Primary data 6.2.3 Data analysis 7 Thesis structure CHAPTER 1: BASIC THEORY ON TECHNOLOGY APPLICATION IN THE MANAGEMENT OF DISTRIBUTION SYSTEM 1.1 Overview of technology .8 1.1.1 Definition of technology 1.1.2 Classifications of technologies 1.1.3 Roles of technology in business 10 1.2 Overview of distribution system 12 1.2.1 Definition of distribution system 12 1.2.2 Roles and functions of distribution system .12 1.2.3 Distribution channel system management 18 1.3 Technology application in the management of distribution system 21 CHAPTER 2: CURRENT SITUATION OF TECHNOLOGY APPLICATION IN THE DISTRIBUTION SYSTEM MANAGEMENT AT HABECO TRADING ONE MEMBER COMPANY LIMITED .28 2.1 Overview of beer industry in Vietnam .28 2.2 Overview of Habeco Trading One - Member Company Limited 32 2.2.1 History of development and establishment .32 2.2.2 Organizational structure 34 2.3 Overview of distribution system at Habeco Trading One Member Co., Ltd .38 2.4 Actual situation of management of distribution system in Habeco Trading One Member Co., Ltd 45 2.5 Current status of applying technology in distribution system management 58 CHAPTER 3: PROPOSAL OF SOLUTIONS FOR BETTER APPLICATION OF TECHNOLOGY IN THE DISTRIBUTION SYSTEM MANAGEMENT AT HABECO TRADING ONE MEMBER CO., LTD 68 3.1 Selecting technologies for the management of distribution system 68 3.1.1 Objectives of application technologies for the management at Habeco 68 3.1.2 Technologies for the management of distribution system 68 3.2 Recommendations for the effective and efficient application of technologies for the management of Habeco distribution system 85 CONCLUSION .91 LIST OF REFERENCE 92 APPENDIX 93 APPENDIX 94 APPENDIX 99 ABBREVIATION HSB MBA VNU HR KPI : Hanoi School of Business : Master of Business Administration : Vietnam National University : Human Resources : Key Performance Indicator SMEs : Small and medium enterprises : Hanoi Beer Alcohol and Beverage Joint Stock Corporation : HABECO Trading One Member Co., Ltd : Fast Moving Consumer Good : Distribution Management System : Enterprise Resources Planning : Solution Software Enterprise : Area Sales Manager : Sales Supervisor : Sales Representative : Point of sales material : General Trade : Modern Trade HABECO MTV HABECO FMCG DMS ERP SSE ASM SS SR POSM GT MT LIST OF TABLES Table 1: Information about number distributor & monthly revenue of MTV Habeco 42 Table 2: Information about the quantity of sales team in MTV Habeco 56 Table 3: Survey on distribution management reporting system in MTV Habeco 63 Table 4: Evaluation of The BOD's commitment to DMS project implementation 83 LIST OF FIGURES Figure 1: Research process Figure 2: Technology Equation .9 Figure 3: Consumer distribution channel 15 Figure 4: Channel Flows in general 17 Figure 5: Five Flows in Marketing Channel for Beer 17 Figure 6: Situation of production and consumption of beer industry 2010 –2019 .28 Figure 7: Beer market share in Vietnam .29 Figure 8: Forecast of Vietnam beer consumption 31 Figure 9: Revenue & Profit of Habeco from 2016 to 2019 33 Figure 10: Product consumption & Sales revenue of MTV Habeco from 2016 to 2019 34 Figure 11: Organizational chart of Habeco Trading One Member Co., Ltd 36 Figure 12: Habeco Trading One Member’s staff qualification in 2020 37 Figure 13: Organizational chart of Branch in Habeco Trading One Member Co., Ltd 37 Figure 14: Model of distribution channel in MTV Habeco 38 Figure 15: Progress of restructuring distribution system in MTV Habeco 40 Figure 16: The quantity of distributor in MTV Habeco .41 Figure 17: Map of MTV Habeco Branch 42 Figure 18: The ratio of the area, the number of distributors and revenue between branches in MTV Habeco .42 Figure 22: Model of Distribution system management applied in MTV Habeco 45 Figure 20: Ordering flow & Product flow in Habeco 47 Figure 21: Price map of beer brands in the market .48 Figure 23: Push and Pull Marketing Strategy in MTV Habeco 49 Figure 24: Promotion flow in Habeco 50 Figure 26: The opinon of support policies for distribution system in comparison with competitors 52 Figure 25: Payment flow for promotion program in MTV Habeco .55 Figure 27: % personel division in MTV Habeco 56 Figure 28: % of position in sales division in MTV Habeco 57 Figure 29: DMS.One applied in MTV Habeco from 2014 to 2016 61 Figure 31: Current model of Enterprise Resources Planning applied in Habeco 82  To be responsible for coordinating project implementation, organizing seminars, working sessions, discussion on related issues;  Acting as the clue for organizing and managing the project's information system to make reports, monitor progress and facilitate information exchange;  Periodically make progress reports, project audit reports and financial statements for the board of management - Project planning and implementation  Develop a master plan and detailed project implementation plan that clearly identifies resources to be used, implementation schedule, completion time, quality objectives, and outcome acceptance criteria for as a basis for monitoring and evaluation;  To be responsible for organizing the implementation of activities according to the approved plan, coordinating with other departments to effectively use the project's resources, ensuring that on schedule approved project - Contract management  Organize the implementation of procurement activities according to the assigned plan in accordance with the current Vietnamese law on bidding;  Manage the performance of the contractors' obligations under the contract signed with the contractor regarding the progress, volume and quality of the package;  Monitoring, monitoring and evaluating the performance of the contractor;  Organize the product acceptance test, payment according to the current law provisions - Monitoring, evaluation, periodic reports  To monitor and evaluate of the project implementation according to current regulations;  Make periodic reports on the implementation status, completed volume, work items and other types of reports at the request of the Investor, competent authorities of Vietnam as prescribed;  Prepare project completion reports Financial factors This is the first and most important factor in project planning Project execution is inherently complex and can be volatile by many impact factors Therefore, the company needs to determine and prepare the necessary financial plan in the specified time period from the beginning of the project Partner selection factors Playing a key role in the project's success, the consultant should have experience implementing the solution of choice In addition, the partner needs to have practical experience in Vietnam, where there are always many distinct characteristics in the management mechanism as well as the local culture This is a complex project, requiring a high degree of commitment from the solution developer In any case, the consultant will try its best to come along for the project to be successful Usually, large implementers with abundant deployment resources, experience and reputation in the market can take on this role About implementation organization The project scope should be clearly defined The project scope should be agreed to avoid damage caused by changing scope, disruption of the project budget and scheduled timeline The proposed implementation methodology not only ensures a clear project scoping, but also provides project administration with the tools needed to monitor and control scope throughout the process project implementation Existing business processes will still be respected during implementation However, there should be changes in the process to match the system Therefore, careful preparation and compromise is needed Timely solving problems in the implementation process Managing changes well, especially changing thinking, professional thinking in both the organization and each individual Focusing on training staff according to new processes, training the system for cadres at all levels, with specialized staff to absorb system administration Good coordination in the groups in the project is also a decisive factor for the success of the project About the deployment time Implementation time must be appropriate, both overall and time for each stage, ensuring the quality of the output for each stage before starting the next stage To elaborate detailed work plans for each stage in the project, mobilize resources to implement the project on schedule The scope of the project is also an important factor in the implementation time, so it is important to agree on the scope before the project starts, avoiding changes in scope that will delay implementation Training and technology transfer - Overview of training requirements:  Training all user in the departments that will implement the DMS system: developing training materials and manuals for the system, organizing user training classes  Training, transferring technology to IT staff: training the process of system installation and implementation (including the deployment process to use for the new unit), the process of operating the system Receive and manage the source code for customized parts of the program and the implementation process ensures that the company can create a production environment that meets all the requirements of project - Responsibility of the company in implementing the training requirements  Prepare personnel to use the system in accordance with the roles and functions of the relevant departments to participate in the training courses  Prepare appropriate qualified IT technical staff to participate in technical training courses to receive and well implement requirements for technical activities (programming, functional development function, reporting)  Prepare the environment and facilities for training activities Communication and notification to the participants of the course  Especially, it is necessary for the company to communicate to all distributors about the application of new technology in distribution system management, clearly define the roles and responsibilities of distributors in participating in operating the system - Requirements for the environment and training equipment: use projectors, screens for training; arrange enough servers for the installation of emulation software, workstations for users to practice and accompanying network equipment to ensure stable connection and operation - Requirements for instructors: each class has 01 main lecturer and 01 assistant professor The number of staff members will depend on the number of students per class - Training object and quantity  Group of training subjects includes the following: Officer in charge of information technology; Professional officer; User  The number of participants will be determined during the implementation process, this number in each class must not exceed 30 - Training content  Training activities will be arranged in accordance with the implementation plan, ensuring no training too soon or too late  The training program must include all the content for the business and the administration and operation of the system For each group of training subjects, there will be separate programs with training content suitable for each group • Operational training course & manual: Training and coaching provide users with necessary skills to master and use all the functions of the system The work includes the main contents such as: instructions, training to use and operate the system according to the prepared curriculum Training content: Introduction of modules in the system; Training to use operations in the system and to exploit statistical reporting information • Training course on system administration and operation: to provide the information technology staff with the necessary skills to manage and control daily operations on software, support tools support for operational software, technologies IT staff need to know to use the software in the project The work includes main contents such as: instructions, training on application administration according to the prepared curriculum Training content: Introduce the module in the system; Training on parameter setting, user management, decentralization management; Need-to-know tools and technologies (if any); Supports users to operate the system In addition, Habeco Trading One Member Company also needs to start research in building a multi-channel business model for Hanoi Beer products Omnichannel is a multi-channel retail model, channels including (website, online Facebook, Zalo ) and offline channels (directly at stores, agents ) In the multi-channel retail model, products are synchronized across all sales channels and managed on a single system This model helps Image on omnichannel Model Source: Internet customers to shop flexibly, have a seamless experience anywhere, whether online or offline CONCLUSION Fast-moving consumer goods (FMCG), especially the beer and soft drink beverage market is a very dynamic industry and has so far been full of potential and witnessed a fierce competition between domestic and foreign enterprises FMCG features short sales cycle and fast goods consumption, which makes it challenging to control the whole supply chain and take initiative in making day-to-day changes Moreover, soft drink and beverage production involves stringent requirements in terms of quality, hygiene, input control, etc and the enterprises in the sector are supposed to keep a close watch on their products and market and develop a system of distributors Application modern technology at this time will help businesses deal with these challenges so that they could stay proactive in controlling and managing the distribution system to optimize their business operation and maximize their profits With the view of Habeco Trading One Member Co., Ltd is to ensure sustainable development in depth, enhance the position and important role of the food and beverage sector in the social economy, in order to overcome difficulties and challenges in the current period, the company will need to focus on improving the efficiency of distribution channel management, and investing both human resources, finance and technology to fully exploit the benefits from operations of distribution channels The author understand that given recommendations are not enough The research hopes that suggestions made will bring to Habeco some suitable ideas to improve management of distribution system Due to time constraint, and limited knowledge as well as experience in technology management of the author, a further study and comprehension of technology management in general and competency improving in particular should be needed and supplemented for a better analysis LIST OF REFERENCE Hoang Dinh Phi (2010) Enhancing management of technology and innovation for sustainable competitiveness of SMEs VNU Journal of Science, Economics and Business 27 Hayriye Nur BAŞYAZICIOĞLU & Kurtuluş KARAMUSTAFA (2018) Marketing 4.0: Impact of technological developments on marketing activities Kırıkkale University Journal of Social Sciences (KUJSS) Volume Lutfu Sagbansua & M Nurettin Alabay (2010) Distribution Network and the Role of Information and Communication Technologies (ICT) Canadian social science, Vol 6, No.4 Riste Temjanovski & Tamara Jovanov Marjanov (2016) Information Technology and Distribution Channels: Current Trends Journal of Economics Nguyen Manh Hung (2017) Managing distribution channel for beer productions in Habeco Trading One Member Company Limited Master Thesis in Hanoi School of Business & Management (HSB), Vietnam National University, Hanoi Hoang Dinh Phi (2019), Management of Technology, Textbook, VNU Publishing House Truong Dinh Chien (2012), Management of Distribution Channel, NEU Publishing House Tarek Khalil (2000), Management of Technology: The Key to Competitiveness and Wealth Creation, McGraw Hill, New York Philip Kotler; Hermawan Kartajaya, Iwan Setiawan (2017) Marketing 4.0 Moving from Traditional to Digital John Wiley Sons 10 Robert W.Palmatier; Louis W.Stern; Adel l El-Ansary (2015) Marketing Channel Strategy Pearson Education, Inc., 11 Philip Kotler, Kevin Lane Keller (2012) Marketing Management Pearson Education, Inc., 12 Bert Rosenbloom (2011) Marketing Channels - A management view SouthWestern College Pub APPENDIX QUESTIONNAIRE This survey will be used to improve distribution system Please answer each question accurately as possible Your answers will be kept confidential and will not be used for any other s rather than the purposes of this research Name: ……………………………………………………………….…………………  Area Sales Manager   Sales Sales Supervisor Representatives Instruction for answer: Please complete the questionnaire by ticking an “X” to what extent each of the following statements is true according to your personal opinion Each statement is measured by the scale from Disagree, Neutral, Agree Dimensions and attributes Disagree Neutra l Agree Policy for bottle and plastic container deposit Shipping policy for distributor Supprot activities for distributors in developing market Delivery time for distributors Discount policy for distributors Consumer preference Payment policy for Distributor The attractiveness of the promotions The attraction of beer festivals and live concerts Please indicate your opinion about how to improve working effect …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… …………………………………………………………………………………………… THANK FOR YOUR COOPERATION! APPENDIX QUESTIONNAIRE This survey will be used to improve distribution system Please answer each question accurately as possible Your answers will be kept confidential and will not be used for any other s rather than the purposes of this research Name: ……………………………………………………………….…………………  Sales Support  Branch Director  Area Sales Manager  Sales Supervisor Instruction for answer: Please complete the questionnaire by ticking an “X” to what extent each of the following statements is true according to your personal opinion Each statement is measured by the scale from - Strongly Disagree, - Disagree, - Neutral, – Agree, – Strongly Agree No Dimensions and attributes I Standardization level of Business Process The company has completed the distribution system management procedures Processes are updated and accurately reflect governance realities The managers are very interested in monitoring and strictly complying with the issued process II The company has reward and punishment process Within minutes, can you access / find the latest company process you need Report System The company have a consistent reporting list for its departments The company have various types of reports on the management of the distribution system that are diversified and have a high degree of complexity The accuracy of the distribution system management reporting system is high The company managed well the data of the No III IV V Dimensions and attributes distribution system through software The company has a common code and ensures absolute consistency between different departments (for example: codes of goods, suppliers, customers ) The data stored collectively on file server / internal web / cloud ? IT capabilities of DMS users in the future The managers regularly see the reports in soft documents (files on the computer / tablet) rather than the hard copy? The DMS user in the future use the computer proficiently? DMS users in the future use smart phones fluently? Future DMS users have used proficiently in office softwares: Word, Excel, Powerpoint, Future DMS users know how to use advanced data analysis tools in Excel such as Pivot tables? Senior and middle management's commitment to changes According to your understanding and feeling, is the Board of Directors fully and uniformly aware of the objectives and significance of the DMS implementation project, including the plans, difficulties and challenges, and costs? According to your understanding and feeling, the board of directors is fully aware of the DMS project's requirements and impacts on the distribution system According to your understanding and feeling, will the Board of Directors participate in all events and meetings to discuss the DMS project? Attitude towards the DMS project According to your understanding and feeling, should the DMS project be implemented at this time? According to your understanding and feeling, will the DMS project be successful? THANK FOR YOUR COOPERATION! RESULT OF SURVEY No Dimensions and attributes Strongly Disagree Disagree Neutral Agree Strongly Agree Average Score I Standardization level of Business Process The company has completed the distribution system management procedures - 45 30 - 3,31 Processes are updated and accurately reflect governance realities - 50 21 - 3,15 The managers are very interested in monitoring and strictly complying with the issued process - - 27 43 10 3,79 The company has reward and punishment process - - 31 49 - 3,61 Within minutes, can you access / find the latest company process you need 23 30 24 - 2,94 II Report System The consistent of reporting list for its departments - 10 29 41 - 3,39 The complexity and variety of reports system 30 23 22 - 2,78 The accuracy of the distribution system management reporting system 15 33 23 2,93 The management of data on the distribution system through software 15 34 22 - 2,86 The consistency data between different departments - 15 40 24 3,14 The data storage on file server / internal web / cloud - 15 40 25 - 3,13 III IT capabilities of DMS users in the future The managers regularly see the reports in soft documents (files on the computer / tablet) rather than the hard copy? The DMS user in the future use the computer proficiently? 3,36 3,04 3,40 - 36 39 - 3,43 - 19 21 40 - 3,26 No IV Dimensions and attributes DMS users in the future use smart phones fluently? Future DMS users have used proficiently in office softwares: Word, Excel, Powerpoint, Future DMS users know how to use advanced data analysis tools in Excel such as Pivot tables? Senior and middle management's commitment to changes The Board of Directors' awareness of the objectives and significance of the DMS implementation project, including the plans, difficulties and challenges, and costs The board of directors' awareness of the DMS project's requirements and impacts on the distribution system Strongly Disagree Disagree Neutral Agree Strongly Agree - - 21 50 Average Score 4,51 - 23 28 20 3,19 15 26 17 19 2,61 3,75 - - 30 40 10 3,75 - - 30 39 11 3,76 - - 31 39 10 3,74 V The Board of Directors' participation in all events and meetings to discuss the DMS project Attitude towards the DMS project Should the DMS project be implemented at this time? 20 35 25 4,06 Will the DMS project be successful? 38 40 3,55 3,81 APPENDIX EXPECTED LIST OF REPORT IN DISTRIBUTION MANAGEMENT SYSTEM No Content HO Branch Branch Director ASM SS Distrib utor SR Report on information of employee and customer 1.1 Profile of sales personel x x x x x 1.2 Profile of distributors x x x x x 1.3 Profile of outlets x x x x x x x 1.4 Profile of sales representatives x x x x x x x 1.5 Profile of admin in distributor x x x x x x Sales report updated by day / week / month / year 2.1 Sales report per distributor / market region / branch x x x x x 2.3 Sales out report of distributor x x x x x x 2.4 Sales report per outlet x x x x x x x 2.8 Report on goods input - output - inventory in distributor x x x x x x x 2.9 Report on packaging input - output - inventory in distributor x x x x x x x x x x x x x x x x x x x x x x x x x x x x 2.10 Outlets’ inventory report 3.1 3.2 Market report Report on competitor’s information (product, price, program, inventory…) Coverage report ... Basic theory on technology application in the management of distribution system - Chapter 2: Current situation of technology application in the distribution system management at Habeco Trading One. .. summarize the theories on technology application in the management of distribution channel and system - To analyze the current situation of technology application in the management of distribution system. .. DISTRIBUTION SYSTEM MANAGEMENT AT HABECO TRADING ONE MEMBER COMPANY LIMITED .28 2.1 Overview of beer industry in Vietnam .28 2.2 Overview of Habeco Trading One - Member Company Limited