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Solutions for poor demanding forecast in e chem vietnam

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI HONG THU SOLUTIONS FOR POOR DEMANDING FORECAST IN E-CHEM VIETNAM MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2021 UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business NGUYEN THI HONG THU SOLUTIONS FOR POOR DEMANDING FORECAST IN E-CHEM VIETNAM MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: Dr Nguyen Phong Nguyen Ho Chi Minh – Year 2021 Table of contents Company introduction 1.1 Mission 1.2 Vision 1.3 Ethnic 1.4 Company organization 1.5 Products 10 1.6 Main customers: 11 Problem Identification 12 2.1 Problem Context 12 2.2 Symptoms 13 2.3 Possible Problem 17 2.3.1 Long Lead Time 19 2.3.2 Late response for customer request 21 2.3.3 High competitive price 21 2.3.4 Product Shortage 22 2.4 2.4.1 Poor Demanding forecast 24 2.4.2 Inflexible system 25 2.5 Problem Validation 28 2.5.1 Eliminating Inflexible system as the main problem 28 2.5.2 Identify Poor Demanding Forecast as the main problem 29 Problem Justification 30 3.1 Problem definition 30 3.2 Problem existence 31 3.3 Problem importance 31 Cause validation 32 4.1 Potential causes 32 4.1.1 Improper forecast method 33 4.1.2 Inaccurate input information 34 4.1.3 Ineffective internal collaboration 35 4.2 Identify the central potential problems 24 Cause validation 37 Suggested Solutions 40 5.1 Alternative solutions 40 5.1.1 Rent market research agency about purchasing status 40 5.1.2 Define incentive offer to explore demand information from customers 41 5.2 Solution Justification 45 5.3 Action Plan 46 REFERENCE 66 LIST OF TABLES Table 1.1 Products range of E-chem in many industries 10 Table 2.1 The number of customer complaints from 8/2020 till 3/2021 14 Table 2.2 The total order from main customers by Quarter 15 Table 2.3 Number of customer complaint by each departments 16 Table 2.4 Lead time of popular products in E-chem Vietnam 20 Table 2.5 Price comparison 3140 RTV products between E-chem quotation and the current buying price of SPG – potential customers 22 Table 2.6 Top 10 South Korean forwarder is Freight & Logistics service ranking by revenue for May 2021 28 Table 3.1 Cost arising from over stock holding 31 Table 4.1 Target and actual sales from 3rd Quarter 2020 to 1st Quarter 2021 34 Table 4.2 Summary 39 Table 5.1 Cost and Benefit of renting market research agency 41 Table 5.2 Sale status from January 2021 till March 2021 42 Table 5.3 Sale Revenue by customers from January 2021 till March 2021 43 Table 5.4 Cost and Benefit calculation for incentive offer solution 44 Table 5.5 Action Plan for selected solution 48 LIST OF FIGURES Figure 1.1 The company organization chart in December 2020 Figure 1.2 Products range of E-chem in many industries 11 Figure 1.3 Current manufacturing customers in E-chem Vietnam, their product usage and revenue in March, 2021 12 Figure 2.1 Customer’s complaint by month 14 Figure 2.2 The comparison of customer complaints of each department 16 Figure 2.3 Wholesale trend from September 2020 till March 2021 17 Figure 2.4 Initial Cause and Effect Map 18 Figure 2.5 E -chem Vietnam’s Sale Process 23 Figure 2.6 E-chem Vietnam’s Sale Process 24 Figure 2.7 Updated Cause and Effect map 27 Figure 4.1 Fish bond diagram of main problem and potential causes 32 Figure 4.2 The input material and information flow in the supply chain 34 Figure 4.3 SOP Process in a supply chain 36 Figure 5.4 Estimation of incentive for main current customers 44 Figure 6.1 Summary of Research Method 49 EXECUTIVE SUMMARY Demand forecast is a critical step in Sale and all internal operation department, which ensures the supply chain for customer work smoothly, make a balance between supply and demand partners to avoid any wasting or shortage in the inventory as well as satisfy the customer experience when buying products from a company To respond to the uncertainty of market and customer demand, the process to make demanding forecast should be careful because it is a key driver in the process to create a high demand forecast accuracy with appropriate method to recognize the demand signals (order recorded history, shipments, promotion program, and competitor information) E-chem Vietnam is an official distributor of Dow ASEAN in the Chemical industry, which is a complicated, high competitive market with high volatility The main products of E-chem are silicone products in LED processes such as display, electronics, lighting Due to the tight production schedule of the electronics industry, it requires good demand planning from the supplier side to make sure no delay or shortage in the production side of customers E-chem has been established in the Vietnam market for more than one year, but they quickly merge on the market and gain positive sales growth in one year However, the unsuitable stock level in the warehouse is a critical issue that affects the smooth operation and long-term development of the company The research includes some important parts Firstly, the researcher identify the problem through interview and theories, it is found that the poor demanding forecast This main problems impacts on the competitive advantages of company such as: lead time, competitive price, shortage in product quantity for customers Secondly, through some of the in-depth, focus group interview and theoretical framework, the researcher find some potential causes: Improper forecast method, Inaccurate input information, ineffective collaboration Thirdly, there are solutions proposed and confirmed by the top managers of company and key person in making strategy and decided to choose incentive offer for customers The cost for this solution is USD 7,074.37 including the preparation and estimated incentive amount for one month The duration to executive this plan is four months including one month for prepration, three months for implementing and evaluation the result The presentation above supports the readers have an overview on how a new chemical company faces to the obstacle when emerging in the new market From the work has been contributed, the full name of the study is “Solutions for Poor Demanding forecast in E-chem Vietnam” Company introduction E-chem Vietnam is a Korean company It was established on 5th March 2020 to distribute DOW chemical, the world-leading chemical brand in silicone adhesive & sealants, and silicon-based technology in Vietnam In the North, E-chem recognizes the promising development of industrial parks in Hai Duong, Vinh Phuc, Quang Ninh, Bac Ninh, Hai Phong, Hung Yen provinces E-chem decided to open an office in Ha Noi on 5/3/2020 E-chem set up the first warehouse in Bac Ninh with 350m2 (Far from Ha Noi office around 70 km), which supports delivering some product samples to the office checking the quality status on storing period After seven months of running the business in northern areas, with fast prospective development, the General Director – Lee Jae Hoon, decided to open the second office on 3/10/2021 – located in Ho Chi Minh City, the largest economic center in Vietnam The company provides many kinds of Dow Silicone products applied for many industries Dow Performance Silicones has been a global leader in silicon-based adhesives for more than seventy years Headquartered in Michigan, USA, they maintain manufacturing sites, sales and customer service offices Research and development labs in every major geographic market worldwide to ensure customers receive fast, reliable support for their processing and application development needs 1.1 Mission E-chem Co., Ltd is able to reach a wide range of products to provide specific solutions that will improve efficiencies, speed processing, help reduce the wasting in production sides, save cost for customers Everything involved technologies that make life prospective better It is their mission and duty to be a contributing partner 1.2 Vision: E-chem Vietnam is supplying outstanding chemical material to the various customer of the technology industries with global makers Their vision is to be a leading chemical supplier in the Vietnam market and serve customers with the fastest time and high-quality chemicals 1.3 Ethnic Respect legal and social norms, and never engage in unethical or unlawful conduct Strive for the happiness of our customers and make customers believe in the company first Respect the diversity of employees, promote mutual trust and cooperation, and prevent discrimination Respect fair trade principles and value for win-win relationships As a member of society, take the social roles and responsibilities of our company 1.4 Company organization GENERAL DIRECTOR SALES CUSTOMER SERVICE Manager Manager Assistant Manager Assistant Manager Sale Staffs HR/FINANCE LOGISTICS OVERSEA (Korea) Manager Manager Corporation Branch Manager Logistics Staffs Strategic Executive CS Staffs Source: Company organization chart in 2020 Figure 1.1 The company organization chart in December 2020 1.5 Products E-CHEM Co., Ltd are supplying outstanding chemical materials to the various customers of the technology industries with Global Makers Industry categories Smart devices (Smartphones and tablets) Wearable devices Home appliance device Telecommunications E-chem product ranges Adhesives and sealants Optical bonding materials Conformal coatings Sealants, encapsulants Thermally conductive materials EMI shielding materials Optical bonding materials Thermally conductive materials EMI shielding materials Conformal coatings Sealants, encapsulants Adhesives and sealants for bonding and gasketing Thermal management materials Gels and pottants Adhesives and sealants, electrically conductive materials for grounding and EMI shielding Source: E-chem Catalogues used to introduce for the customers Table 1.1 Products range of E-chem in many industries The main products are Silicone serving electronics and advanced assembly manufacturers The extensive portfolio of Silicone is applied for many industries across the value chain and end markets Many products are made from silicones for Electronics such as Adhesives and Sealants, Conformal coatings, Encapsulants, Dielectric Gels, Electrically and Thermally conductive materials and Foams The industries in which Silicone can serve its demands are Power and energy, Lamp and Luminaire, Industrial and Aero, Transportation assembly, Consumer and communications, Appliance, Sensors and actuators 10 Mr Minh: Actually, our internal process is very complicated Currently, the production plants of Dow ASEAN are from many countries: the USA, Japan, Korea, China, EU, etc When facing logistics constraints, I’m always eager to solve the issues by customizing the normal process such as outsourcing or requesting support from other forwarding services, which specializes in the foreign markets that chemical production is presenting in Due to company policy and process, in some urgent cases, but we cannot anything except waiting for the nominated suppliers to solve the problem We don’t estimate when the problem is solved; we are just waiting to be informed until the forwarder is informed of the results Ms Thu: As you said, it seems the Logistics department already does its best to improve the lead time If so, which department influences customer complaints about the lead time? Mr Minh: Actually, till now, I always my best Probably, some mistakes that we make but we haven’t recognized If I found the wrong things we are missing, we definitely find the best solutions to fix it In my opinion, I think the decision for the order amount to cover customer demand is important If management level or sale team can decide the reasonable quantity that can back up for latter orders from customers I think it’s much better and we can proactive to solve product shortage with our inventory Besides that, the Logistics department also finds the best ways to work more smoothly with forwarder service FOURTH INTERVIEW Interview Duration: around 15 minutes Date: 05/04/2021 Address: Floor 14th, Vincom Center, 45A, Ly Tu Trong, Ben Nghe Ward, District 1, HCMC Method: Face-to-face Interview Interviewer: Nguyen Thi Hong Thu Interviewee: Nguyen Thi Loan – Sale Staff Purpose: Finding the possible problems that cause customer complaints about long responses from customers Ms Thu: Hi Ms Loan Can we talk for 15-20 minutes? I am doing my thesis so I need your support Your information would be very helpful for my research And I promise to keep all your providing information confidential This is an in-depth interview, so I hope you can be open to sharing all of your opinions Ms Loan: Okay, let’s started Ms Thu: As a Sale staff, can you describe your main tasks at E-chem? 55 Ms Loan: I am assisting for Mr Dat and Mr Lee Cheol-Ho for some provinces in the North My main tasks are calling to approach and introduce the company, send an introduction email, try to set a meeting with customers And I support them to make initial quotations for customers if needed Ms Thu: How you think about the process to reply customer’s quotation response? Ms Loan: For me, it’s a very lengthy process When getting requests for quotation, Sale staffs will check purchasing price from suppliers; their response takes around days to get feedback with the logistics team for all related import fees such as delivery fee, import tax, customer, etc Then sale will check the competitive price, set the margin and make the quotation It is compulsory to send our suggested quotation to Korea Assistant – Mr Lee Dong Huyn or Mr Lee Cheol-Ho, and they will send to General Director to get the final decision about the quotation The duration of this process can take 3-4 days to finalize; sometimes, if Dow provides the purchasing price late, it can last for one week It regularly happens the customer's complaint for waiting too long, due to their demand, they easily choose another supplier giving fast response instead of E-chem Ms Thu: How about the response to the customer? What is your opinion on this? Ms Loan: For some technical inquiries, we have to wait for advice from the technician passively Currently, we only have one person in charge of this responsibility But I have a concern about the quotation process When getting requests for quotation, Sale staffs will check the purchase prices from suppliers Their response takes around days to get feedback from the logistics team for all related import fees such as: delivery fees, import tax, customers, etc Then sale will check the competitive price, set the margin and make the quotation It is compulsory to send our suggested quotation to Korea Assistant – Mr Lee Dong Hyun or Mr Lee Cheol-Ho, and they will send to General Director to get the final decision about the quotation Ms Thu: How long does it take for this process? Ms Loan: The duration of this process can take 3-4 days to finalize Sometimes if Dow provides the purchasing price late, it can last for one week It regularly happens the complaint of customers for waiting too long, due to their demand, they easily choose other suppliers giving fast response instead of E-chem FIFTH INTERVIEW Interview Duration: around 15 minutes Date: 07/04/2021 Address: Floor 14th, Vincom Center, 45A, Ly Tu Trong, Ben Nghe Ward, District 1, HCMC 56 Method: Face-to-face Interview Interviewer: Nguyen Thi Hong Thu Interviewee: Chu Thi Nga – Sale Staff Purpose: Finding the possible problems that cause customer complaints about long response from customers Ms Thu: Hi Nga As fas, I know that you have joined the companies since the Ho Chi Minh city Can you share some of your obstacles to working in this field? Ms Nga: Our products target to niche markets, very market proportion uses our products We always put effort to show E-chem advantages when approaching promising customers: competitive price, good lead time, on-time customer service But after receiving Purchase Order (PO) from customers, E-chem don’t have enough safety stock, so we face with a shortage of products for urgent orders or during the peak season (3 months’ end of the year) Ms Thu: How about the price? Do you think E-chem are managing good with costs like Logistics, purchasing cost? Ms Nga: I think the company can save lots of costs if we have a plan for inventory E-chem is not proactive in preparing stock, so with irregular customers, they have product demand, but E-chem don’t have safety stock for their demand The product inventory range of E-chem is not diversified If it happens suddenly, E-chem will calculate all logistics costs and purchasing costs for this order Therefore, the selling price is extremely high comparing to other competitors It results in customer complaints for the price Ms Thu: Can you share a typical case for this issue? Ms Nga: It is SPG Company case This company produces motor components Sale team successfully contacts and get information about their demand and volume Ms Thu: Did they complain about our price? Ms Nga: Yes, they complained a lot when receiving the quotation They are using 3140 RTV, this product is used for coating motor components Currently, it is imported from Korea by CIP price (same as E-chem) But their importing price is only $10.69/ Cartridge while E-chem sent the quotation with $23.90/ Cartridge Ms Thu: Hm… It’s really a big gap It’s difficult for E-chem to be chosen as a new supplier 57 Ms Nga: Yes, you are correct E-chem don’t have available stock for many products So it happens many cases like this, for small quantity but we have to pay a large amount for logistics fee and make a big gap with the current price of customer SIXTH INTERVIEW Interview Duration: around 10 minutes Date: 10/04/2021 Address: Floor 14th, Vincom Center, 45A, Ly Tu Trong, Ben Nghe Ward, District 1, HCMC Method: Face-to-face Interview Interviewer: Nguyen Thi Hong Thu Interviewee: Lee Dong Hyun – Sale Manager Purpose: Finding the main problems, possible cause resulting in customer complaints about long response from customers Ms Thu: Good morning, Mr Lee I’m doing my research about a critical symptom at E-chem Vietnam recently I collected many problems from local staff (Ms My, Mr Dat, Ms Nga, Ms Loan, Mr Minh), but to summarize and have a bigger view about the current problem and main cause, I would like to interview you All information you provide will be kept confidential Firstly, can you introduce yourself? Current job and your working experience in E-chem? Mr Lee: Hi Thu, I’m Lee It’s nice to support you some research about our company I hope my opinion can help you Please go ahead! Ms Thu: There are many customer complaints about the delay lead time of products Do you think it is the biggest challenge of E-chem now? Mr Lee: Actually, I think it is a critical problem that E-chem is facing The characteristics of chemicals sold in E-chem is an extremely high price, due to the high quality Some Adhesive products have double or triple prices comparing the common products in the chemical market The demand in the South is too small; it is a big challenge for the sales team to find available demand or persuade the customers to use Dow Chemical instead of their current usage When Sale team find promising companies, many customers (1st vendor of Samsung Electronics) such as Daeyeong Vina, Novas EZ, Dongyang E&P showed their unsatisfied attitude due to a lead time of nearly months They cannot wait so long 58 Ms Thu: In my viewpoint, there is a main problem that results in many reasons making customer complain to E-chem Do you have any ideas about the main problem? Mr Lee: I think it is our demand forecast ability E-chem should enhance the demanding forecast ability, which directly helps control the inventory status Currently, on the Sale demanding forecast, we made some estimation mistakes or wrong calculation formulas It results in quantity shortage, delayed lead time and even loss the promising customer due to delivery competitiveness In my opinion, the best inventory should be defined and contain a minimum amount of popular products reasonably in availability It not only helps to cover the regular orders from previous customers, but we can also suggest and consult for a promising customer to use it It is very helpful to deal with unexpected demand and make a good image regarding stock availability, competitive lead time, and good customer service SEVENTH INTERVIEW Interview Duration: around 20 minutes Date: 12/04/2021 Address: Floor 14th, Vincom Center, 45A, Ly Tu Trong, Ben Nghe Ward, District 1, HCMC Method: Face-to-face Interview Interviewer: Nguyen Thi Hong Thu Interviewee: Lee Jae Hoon – General Director (Mr Louis) Purpose: Clarify the main problem, possible main causes based on the collected information Ms Thu: Good morning, Mr Louis It’s my pleasure to have a deep sharing with you today Let me explain a little bit about the reasons why I need your support I’m working on the final thesis; the starting symptom is the customer complaints I am basing on some monthly record data, my observation, literature review I define some problems, possible causes that affect Now I need your advice, which is the practical situation in our company So please share with me your own opinion on the later questions I am about to ask All your information will be kept confidential and use for research purposes only Thank you Mr Louis: Ok, Glad to support you Let’s started! Ms Thu: Thank you For problem leading to the customer complaint I define two possible central problems They are: Inflexible internal systems and poor demanding forecast Can you share with me your concern about this problem, is it actually exist in our company? 59 Mr Louis: Firstly, I share about the poor demanding forecast first Although E-chem has just been established in Vietnam for more than one year, in the last months, it happens many destruction cases due to expired products Sometimes, it happens the complaint from customers about the short expiration date of received products For potential customers, it always happens product shortage or unavailability to suggest for their demand It means the safety stock control has problems For me, safety stock is directly affected by Sale forecast demand at the beginning of the period The new companies always face several messy problems, but I am always eager to solve the demand forecast in priority in this emerging market period in E-chem This is the shortest way to improve our competitiveness and upgrade our position in the chemical market Ms Thu: Can you share briefly about the current demand forecast process? How is your evaluation of the impact of poor demand forecast? Mr Louis: Currently, we mainly use recorded orders from customers to the forecast Based on the history data, we adjust a little bit, and send the assumption to DOW ASEAN production With their information, we guest the peak season and volume for the next period Some customers want to prepare safety stocks They also share us their estimation, we can utilize them If the buyers divorce their quantity estimation, the responsibility for unused stocks are all taken by E-chem It’s a big abundant amount Ms Thu: How about the inflexible internal system? Do you think it also impacts the delay lead time issue, late response to customer requests, and product shortage? And you think E-chem needs some adjustments to make it shorter and more effective? Mr Louis: Since E-chem was established in Vietnam for one year, everyone should keep in mind working in the rule, everything is being set up from the bottom Top managers should know every decision from staff since we have to adjust or advise if needed During these staff reports, I can understand what obstacle they are facing to support is, what appropriate process to apply, which kinds of document need to be made to keep track of the working history and make a report I well-understand all the process now is complicated and a bit time-consuming But E-chem is on the way to set up and improve the procedures for everything; every staff should be patient more when we successfully set up the suitable rules from top to bottom, everything will be much easier Ms Thu: So, at your side, you think the poor demanding forecast is the priority of the problem that needs solving now? Mr Louis: You’re correct This is a big concern from the top-manager viewpoints 60 Ms Thu: Really, thanks for your cooperation Your opinion is very helpful for my analysis of thesis research Mr Louis: You are welcome I look forward to your good recommendation EIGHT INTERVIEW Interview Duration: around 20 minutes Date: 01/05/2021 Address: Floor 14th, Vincom Center, 45A, Ly Tu Trong, Ben Nghe Ward, District 1, HCMC Method: Focus Group Interview Interviewer: Nguyen Thi Hong Thu Interviewee: Mr Pham Xuan Dat, Ms Nguyen Huyen My and Mr Lee Dong Hyun Purpose: Clarify the main causes of the poor demanding forecast Ms Thu: Thanks for 2nd time to join the interview with me Today, I set a small group with two main people in Sale team and key members in the Customer Service department Nice to meet you again Mr Lee, Ms My and Mr Dat Mr Lee: Good morning, Ms Thu Ms Thu: After one month, by your first interview with both of you I some research through advice from my supervisor, literature Then define some main causes: Improper forecast method, Inaccurate input information, and ineffective internal collaboration Firstly, what is your opinion regarding the Improper forecast method? Mr Lee: To be more accurate, E-chem should apply some complicated quantitative application, but currently, it requires a huge investment to conduct The company is in the first period to establish and set up the position in the market There are many operation and additional costs, the profit after tax of company is minus It’s hard to afford to hire an expert for forecasting in this period Mr Dat: I have some ideas as yours I feel the current forecast is partially subjective and it doesn’t entirely base on provided information or logic; sometimes, it is the sale expectation from the upper managers Sale team feels quite stress when the income products in inventory are high, and we have to find the customers to consume it But I fully understand the establishment period; the company should concentrate on 61 understanding the market, setting up the logical process, and enhancing the competitor's outstanding competitiveness So building up a complicated forecast method is not reasonable at this time Ms Thu: How about the ineffective internal collaboration? Do you have any difficulties in teamwork during the forecast process? Ms My: Actually, I have not much concern about this problem Because currently, all departments record information on the system manually on excel, word and save on serve Although it is a manual way, it is allowed to access only the related people Without authority, no one can access and edit, so the company can control each department's file It is undeniable that there are some mistakes while making manual files, but the number of current data is not much All members are aware of the importance of careful record and always try the best to reduce the mistake Mr Lee: I think internal collaboration is not a concern The information record has not much impact up till now Since the top manager manages the file authority strictly and the recorded information is currently not much Each department manager is taking responsibility if the file is incorrect, so they keep pay attention and keep checking the accuracy There is some staff not willing to support for forecasting process This is an easy cause to solve We will keep track, get feedback and give them strict reminders If there is no improvement, the company will have punishment due to lack of responsibility and teamwork spirit Ms Thu: How is your opinion about the last cause that is inaccurate input information? Mr Lee: Currently, the main input information is time-series data from customers, customer estimation, expectations from Director to Sale team There is no information about updated markets and competitors Company don’t recognize the competitiveness comparing to each competitor; no one can predict customer can change the supplier in the next period or not, no evaluation which is the upcoming, potential customers who can release order by their checked quotation for preparing Currently, all forecasts are assumed that customers keep sending PO (purchase order) in the next period and no further opportunities to make safety stock in advance Mr Dat: For the collected information, I have some difficulties due to lack of order history and inventory status The detailed purchasing amount, warehouse status, import-export amount, expiration date of current stock is handled by the Logistics team If lack of this information, it is very hard to make a forecast for the next period NINTH INTERVIEW Interview Duration: around 15 minutes 62 Date: 10/05/2021 Address: Floor 14th, Vincom Center, 45A, Ly Tu Trong, Ben Nghe Ward, District 1, HCMC Method: Focus Group by Webex application Interviewer: Nguyen Thi Hong Thu Interviewee: Mr Lee Jae Hoon, Mr Kang Daniel (Korea Headquarter) Ms Thu: Good afternoon, Mr Lee Jae Hoon It’s nearly one month since I had the first meeting with you to clarify which is the main current problem in practice Currently, my research is coming to the end step, that is clarify the suitable solution for our company to an executive at this time Since it related to financial status and benefits evaluation from top manager view So I really need advice from you and Mr Kang Daniel., who are well-understand of company's practical situation and strategy Mr Louis: Okay, Ms Thu I’m willing to support you for this significant research Mr Kang: Okay Thu It’s my pleasure But I will have a meeting next 30 minutes So please help finish our discussion within 15-20 minutes Ms Thu: Okay, sir! On the literature review and advice from my supervisor at ISB school, there are two alternative solutions suitable for our company context: Renting market research agency for purchasing status and defining incentive offer to explore demand information from customers I made a chart about benefit and cost analysis Can you give me advice about these two options? Mr Louis: For renting a market research agency for purchasing status, This solution is beneficial for Echem to understand the whole market of electronics chemical Nevertheless, the target for E-chem products is the niche market There are many electronics manufacturers in Vietnam, but only 20% is the target of Echem It is related to the process of an electronics company; if companies have Surface Mount Technology (SMT) or Assembling process, their demand is totally different from E-chem products’ characteristics Especially, Dow chemical is the high-end chemical product in this industry, very few companies can afford to use it If E-chem rents a market research agency, their result is hard to meet the demand of E-chem because the researcher focuses on chemical products in this field Mr Kang: Actually, in the headquarter, we used to rent a market research one time when establishing the office in Korea For me, the cost to rent the market research is rather high, but the demand of customers keeps changing I assume that this solution brings good results But we have to re-proceed after one year 63 even haft year because the period of this solution is too short Suppose E-chem Vietnam keeps paying for this solution It is a big obstacle for the Financial statements of E-chem Vietnam Mr Louis: And I really appreciate the second solution I used to think about it before, but I don’t spend much time researching and making a plan for it It is not only an effective solution; I evaluate its result to be much better than the previous one The important thing to now is all departments collaborate Then, Ms Trang (Financial manager) and Mr Kang Daniel (Strategic Expert) work together and propose an incentive rate for certain circumstances I hope all employees put their effort into executive this solution into practice Mr Kang: It a new challenge for E-chem but have a big potential result Let make a clear action plan and share me I will help you advise and modify to make suitable proposals and good practice Ms Thu: I appreciate for your valuable ideas I will finish my action plan proposal and share all of you soonest Wish you a nice day! Interview Duration: around 15 minutes Date: 10/05/2021 Address: Floor 14th, Vincom Center, 45A, Ly Tu Trong, Ben Nghe Ward, District 1, HCMC Method: Focus Group by Webex application Interviewer: Nguyen Thi Hong Thu Interviewee: Mr Lee Jae Hoon, Mr Kang Daniel (Korea Headquarter) Ms Thu: Good afternoon, Mr Lee Jae Hoon It’s nearly one month since I had the first meeting with you to clarify which is the main current problem in practice Currently, my research is coming to the end step, which clarifies the suitable solution for our company to an executive at this time Since it is related to financial status and benefits evaluation from the top manager's view, I really need advice from you and Mr Kang Daniel., who are well-understand of company's practical situation and strategy Mr Louis: Okay, Ms Thu I’m willing to support you with this significant research Mr Kang: Okay Thu It’s my pleasure But I will have a meeting next 30 minutes So please help finish our discussion within 15-20 minutes Ms Thu: Okay, sir! 64 On the literature review and advice from my supervisor at ISB school, there are two alternative solutions suitable for our company context: Renting market research agency for purchasing status and defining incentive offer to explore demand information from customers I made a chart about benefit and cost analysis Can you give me advice about these two options? Mr Louis: For renting a market research agency for purchasing status, This solution is beneficial for Echem to understand the whole market of electronics chemical But the target for E-chem products is the niche market There are many electronics manufacturers in Vietnam, but only 20% is the target of E-chem It is related to the process of an electronics company, if companies have Surface Mount Technology (SMT) or Assembling process, their demand is totally different from E-chem products’ characteristics Especially, Dow chemical is the high-end chemical product in this industry, very few companies can afford to use If E-chem rents a market research agency, their result is hard to meet the demand of E-chem because the researcher focuses on chemical products in this field Mr Kang: Actually, in the headquarter, we used to rent a market research one time when establishing the office in Korea The cost to rent the market research is rather high, but the demand of customers keeps changing I assume that this solution brings good results However, we have to re-proceed after one year even after year because this solution's period is too short Suppose E-chem Vietnam keeps paying for this solution It is a big obstacle for the Financial statements of E-chem Vietnam Mr Louis: And I really appreciate the second solution I used to think about it before, but I don’t spend much time researching and make a plan for it It is not only an effective solution; I evaluate its result to be much better than the previous one The important thing to now is all departments collaborate, then Ms Trang (Financial manager) and Mr Kang Daniel (Strategic Expert) work together and give me a proposal of incentive rate for certain circumstances I hope all employees put their effort into executive this solution into practice Mr Kang: It a new challenge for E-chem but have a big potential result Let make a clear action plan and share me I will help you advise and modify to make suitable proposals and good practice Ms Thu: I appreciate your valuable ideas I will finish my action plan proposal and share all of you soonest Wish you a nice day! 65 REFERENCE 0[1] Dr Akhilesh Barve,” International Conference on E-business, Management and Economics”: Impact of Supply Chains Agility on Customer Satisfaction, IPEDR vol.3, 2011, pp.325 [2] A.M Sanchez, and M.P Perez, “Supply chain flexibility and firm performance: A conceptual model and empirical study in the automotive industry”, International Journal of Operations and Production Management, Vol 25 (7), 2005, pp.681 – 700 [3] K.I.Voigt, M Saatmann, and S Schorr, “Flexibility and revenue management in the automotive industry”, Journal of Enterprise Information Management, Vol 21 (4), 2008, pp 424 – 439 [4] L.M Ellram, “A managerial guide for the development and implementation of purchasing partnerships”, International Journal of purchasing and Materials Management, Vol 27 (3) [5] Lee, H., M Rosenblatt 1986 A generalized quantity discount pricing model to increase supplier’s profits Management, Vol 32, pp 1177–1185 [6] Christopher, M (2000) The Agile Supply Chain Industrial Marketing Management, 29(1), 37-44 [7] Oliva, R., Watson, N., 2009 Managing functional biases in organizational forecasts: a case study of consensus forecasting in supply chain planning Production and Operations Management 18, 138–151 [8] Verdouw, C N., Beulens, A J M., Trienekens, J H., & van der Vorst, J G A J (2010) A framework for modelling business processes in demand-driven supply chains Production Planning & Control, 22(4), 365–388 [9] Narayanan, A., Sahin, F., & Robinson, E P (2019) Demand and order-fulfillment planning: The impact of point-of-sale data, retailer orders and distribution center orders on forecast accuracy Journal of Operations Management, 65(5), 468–486 [10] Donohue, K L (2000) Efficient supply contracts for fashion goods with forecast updating and two production modes Management Science, 46(11), 1397–1411 [11] Silver, E A., Pyke, D F., Peterson, R., et al (1998) Inventory management and production planning and scheduling, vol New York: Wiley [12] Syntetos, A A., Babai, Z., Boylan, J E., Kolassa, S., & Nikolopoulos, K (2016) Supply forecasting: Theory, practice, their gap and the future European Journal of Operational Research, 252(1), 1–26 [13] Huang, T., Fildes, R., & Soopramanien, D (2014) The value of competitive information in forecasting FMCG retail product sales and the variable selection problem European Journal of Operational Research, 237(2), 738–748 [14] Cai, Y., Zhang, M F., & Huang, L (2011) Safety stock management based on lead time optimization 2011 International Conference on Electric Technology and Civil Engineering (ICETCE) [15] Gardner Jr., E.S., 1985 Exponential smoothing: the state of the art Journal of Forecasting 4, 1–28 [16] Warren Liao, T., & Chang, P C (2010) Impacts of forecast, inventory policy, and lead time on supply chain inventory—A numerical study International Journal of Production Economics, 128(2), 527–537 [17] A.M Sanchez, and M.P Perez, “Supply chain flexibility and firm performance: A conceptual model and empirical study in the Production Management, Vol 25 (7), 2005, pp.681 – 700 66 [18] Basson L.M, Kilbourn PJ, Walters J Forecast accuracy in demand planning: A fast-moving customer goods case study Journal of Transport and Supply Chain Management 2019; 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A market survey of industrial requirements for product data management and manufacturing planning systems Proceedings of the 1999 IEEE International Symposium on Assembly and Task Planning (ISATP’99) [51] Lee, H.L and Whang, S (2001), “Demand chain excellence: a tail of two retailers”, Supply Chain Management Review, Vol No 2, pp 40-6 [52] Özer, Ö., Zheng, Y., & Chen, K.-Y (2011) Trust in Forecast Information Sharing Management Science, 57(6), 1111–1137 [53] Li, L 2002 Information sharing in a supply chain with horizontal competition Management Sci 48(9) 1196–1212 [54] Zhang, H 2002 Vertical information exchange in a supply chain with duopoly retailers Production Operation Management 11(4) 531–546 [55] Zhang, F 2006 Competition, cooperation, and information sharing in a two-echelon assembly system Manufacturing Service Operation Management 8(3) 273–291 [56] Research, Z.M Global Silane Modified Polymer Market 2019—Henkel Ltd., The Dow Chemical Company, Evonik, Kaneka Americas Holding, Inc Available online: https://economicsaffairs.com/globalsilane-modified-polymer-market-2019-henkel-ltd-the-dow-chemicalcompany-evonik-kaneka-americasholding-inc/6176/ (accessed on February 2019) 69 ... them Being recognized the significant impacts of demanding forecast on the competitiveness of E- chem in the Chemical industry, the poor demanding forecast is the main problem that needs to be... obstacle when emerging in the new market From the work has been contributed, the full name of the study is ? ?Solutions for Poor Demanding forecast in E- chem Vietnam? ?? Company introduction E- chem Vietnam. .. results E- chem Vietnam has been presented in Vietnam for one year; the company is in progress to explore the market and partner with promising customers in the electronics industry E- chem also
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