Analysing reality situation of supplier quality management at datalogic group

BỘ GIÁO DỤC VÀ ĐÀO TẠO TRƯỜNG ĐẠI HỌC SƯ PHẠM KỸ THUẬT THÀNH PHỐ HỒ CHÍ MINH ĐỒ ÁN TỐT NGHIỆP NGÀNH QUẢN LÝ CÔNG NGHIỆP ANALYSING REALITY SITUATION OF SUPPLIER QUALITY MANAGEMENT AT DATALOGIC GROUP GVHD: NGUYEN THI ANH VAN SVTH: NGUYEN THI NGOC LINH MSSV: 16124135 SKL 0 Tp Hồ Chí Minh, tháng 5/2020 MINISTRY OF EDUCATION & TRAINING HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY AND EDUCATION FACULTY OF ECONOMICS GRADUATE THESIS TOPIC: ANALYSING REALITY SITUATION OF SUPPLIER QUALITY MANAGEMENT AT DATALOGIC GROUP Student’s full name: Nguyen Thi Ngoc Linh Student’s ID : 16124135 Class of : 2016 Major : Industrial Management Instructor : Master Nguyen Thi Anh Van Ho Chi Minh City, May 2020 EVALUATION OF INSTRUCTOR HCM City, ………… 2020 Instructor Page i EVALUATION OF REVIEWER LECTURER Ho Chi Minh City, …………… 2020 Reviewer Lecturer Page ii ACKNOWLEDGEMENTS First of all, I would like to thank all teachers in the Faculty of Economics of Ho Chi Minh City University of Technical and Education, they have always been enthusiastic in imparting knowledge, sharing experiences with students Secondly, I would like to express my sincere thanks to my instructor – Master Nguyen Thi Anh Van, who always patiently gave me helpful advice during the study period Not only that, she always spent time even on weekends or outside work hours to answer my questions It would be difficult for me to complete this report without her enthusiastic support Thirdly, my thank also go to DATALOGIC Vietnam Co., Ltd The company has given me the opportunity to broaden my knowledge and skills In addition, I would like to express my gratitude to Global Procurement Department Especially, Mr Luu Quoc Tam is my direct instructor in Datalogic company, who always willing to answer all my question and give me career orientation in the future Last but not least, I want to express my gratitude to my family Those who have always sacrificed silently, always by my side and encourage me to overcome all difficulties They are the motivation for me to strive to complete my studies and work Ho Chi Minh City, 5th May 2020 Student Nguyen Thi Ngoc Linh Page iii GLOSSARY Acronyms The meaning of acronyms AEO The Authorized Economic Operator ASQ The American Society for Quality Control CA Corrective Action CAPA Corrective And Preventive Actions CCs Control Characteristics CM Category Manager CTO Chief Technology Officer C-TPAT The Customs-Trade Partnership Against Terrorism Dept Department DL Datalogic DPPM/PPM Defective Part Per Million EQMS Enterprise Quality Management Software GPr Global Procurement ISO The International Organization for Standardization KPI Key Performance Indicator NCs Non-Conformities / Non-Conformances NDA Non-Disclosure Agreement NPI New products introduction NSR New Supplier Request ODM Original Design Manufacturing OEE Overall equipment effectiveness OEM Original Equipment Manufacturer OEM Original Equipment Manufacturing OTD On Time Delivery OTD On Time Delivery PA Preventive Action PAs Purchase Agreement Page iv PPAP Production Part Approval Process QMS Quality Management Systems R&D Research & Development RCA Root Cause Analysis RFI Request For Information RFID Radio Frequency Identification RFQ Request for Quotation SAP Systems, Applications and Products SCARs Supplier Correction Action Reports SEQ Supplier Evaluate Qualification Sev Severity Sev Scrap Sev VQN cost recovery Sev Formal VCAR SOP Standard Operating Procedure SQA Supplier Quality Assurance SQE Supplier Quality Engineering T&L Transportation & Logistics TQM Total Quality Management UHF Ultra-High Frequency VDR Vender Rating VNQ Vendor Quality Notification Page v DIRECTORY OF TABLE Table 3.1: Identify TIER of the supplier of DL 34 Table 3.2: Determine KPI of PPM 38 Table 3.3: Calculation Rule OTD rate of DL 39 Page vi DIRECTORY OF FIGURE Figure 1.1: Preliminary introduction about Datalogic Group Figure 1.2: Four main sectors of Datalogic Group Figure 1.3: Product group Hand Held Scanners Figure 1.4: Product group Mobile Computer Figure 1.5: Product group Fix Retail Scanners Figure 1.6: Product group Scan Engines Figure 1.7: Product group Safety Figure 1.8: Product group Laser Marking System Figure 1.9: Product group Sensor Figure 1.10: Product group Vision Systems Figure 1.11: Product group RFID Figure 1.12: Organization chart of Datalogic Group Figure 1.13: Organizational structure chart of Golbal Procurement Department 11 Figure 1.14: Organizational structure chart of Quality Department 12 Figure 2.1 Production process quality assurance 16 Figure 2.2 Measurement process quality assurance 17 Figure 3.1: Four phases of supplier quality management of DL 22 Figure 3.2: Supplier quality management process map of DL 24 Figure 3.3: Flow chart of planning select potential suppliers 27 Figure 3.4: Flow chart of evaluating potential suppliers and final approval 30 Figure 3.5: Flow chart of evaluating supplier qualification 34 Figure 3.6: Flow chart of monitoring Supplier’s performance 38 Figure 3.7: Formula for calculation the supplier's performance score 38 Figure 3.8: Flow chart of auditing supplier 41 Figure 3.9: Vendor corrective action request process 43 Figure 4.1 Specification Deviation Form 48 Figure 4.2 The flow chart of planning select potential suppliers 54 Page vii TABLE OF CONTENTS EVALUATION OF INSTRUCTOR i EVALUATION OF REVIEWER LECTURER .ii ACKNOWLEDGEMENTS iii GLOSSARY iv DIRECTORY OF TABLE vi DIRECTORY OF FIGURE vii PREAMBLE 1 Reasons for subject selection Research objectives Research scope Research methodology Report structure CHAPTER 1: GENERAL INTRODUCTION ABOUT DATALOGIC GROUP 1.1 General introduction about Datalogic Group 1.1.1 Preliminary introduction about Datalogic Group 1.1.2 History of formation and development 1.1.3 Vision and mission of Datalogic Group 1.1.4 Main sectors of Datalogic Group 1.1.5 Business strategy 1.1.6 Some core products 1.1.7 Organization structure of Datalogic Group 1.2 Introduce the departments related to the supplier quality management 10 1.2.1 Global Procurement Department 10 Page viii 1.2.2 Quality Department 11 CHAPTER 2: LITERATURE REVIEW 13 2.1 Quality 13 2.2 Quality management 13 2.3 Supplier quality management 14 2.4 Application of the perspective of total quality management to supplier quality management 2.5 14 Supplier quality assurance 15 2.5.1 Supplier quality assurance 15 2.5.2 Nine steps of supplier quality assurance 17 2.6 State of supplier quality management 17 2.7 Five Key Metrics of Supplier Quality Management Plus Four Steps of the Supplier Evaluation Process 18 2.7.1 Five Key Metrics Used for Scoring SQM 18 2.7.2 Four Steps of the Supplier Evaluation Process 19 CHAPTER 3: ANALYZE THE IMPLEMENTATION OF SUPPLIER QUALITY MANAGEMENT AT DATALOGIC GROUP 22 3.1 Supplier quality management process 22 3.1.1 Four phases of supplier quality management 22 3.1.2 Supplier quality management process map 24 3.1.3 Evaluate supplier quality management process 24 3.2 SOP for planning select potential suppliers 25 3.2.1 Purpose 25 3.2.2 Phase of the process and timing 25 3.2.3 Flow chart 26 Page ix 3.2.4 Analysis process 27 3.2.5 Evaluation implementation 28 3.3 SOP of evaluate potential suppliers and final approval 28 3.3.1 Purpose 28 3.3.2 Phase of the process and timing 28 3.3.3 Flow chart 29 3.3.4 Analysis process 30 3.3.5 Evaluation implementation 32 3.4 SOP of evaluating supplier qualification 32 3.4.1 Purpose 32 3.4.2 Phase of the process and timing 32 3.4.3 Flow chart 33 3.4.4 Analysis process 34 3.4.5 Evaluation implementation 36 3.5 SOP of Supplier’s performance Monitoring 37 3.5.1 Purpose 37 3.5.2 Flow chart 37 3.5.3 Analysis process 38 3.5.4 Evaluation implementation 39 3.6 SOP of audit supplier 40 3.6.1 Purpose 40 3.6.2 Flow chart 40 3.6.3 Analysis process 41 3.6.4 Evaluation implementation 42 Page x 3.7 SOP of vendor corrective action request 42 3.7.1 Purpose 42 3.7.2 Process map 43 3.7.3 Analysis process 43 3.7.4 Evaluation implementation 44 CHAPTER 4: EVALUATIONS AND SOLUTIONS 45 4.1 Evaluation 45 4.2 Solutions 47 4.2.1 The first solution is to store documents on changing specifications 47 4.2.2 The second solution is to store audit and re-audit documents 49 4.2.3 The third solution is to use electronic signatures 49 4.2.4 The fourth solution is the supplier’s TIER identifier 50 4.2.5 The fifth solution is to create a wide supplier network 50 4.2.6 The sixth solution is retraining staff about how to calculate supplier performance and audit skills 51 4.2.7 The seventh solution is adding a term in agreement about how long suppliers must respond to improvement requests 52 4.2.8 The eighth solution is to reduce the time to collect information when more potential suppliers are selected 52 REFERENCE 56 APPENDIX 58 Page xi PREAMBLE Reasons for subject selection There are many groups of factors that contribute to the efficient production and business of a business In which group of most important factors is the group of input materials Because, input materials are the direct factors that make up the entity of the product, the quality of the raw material will directly impact the product quality as well as the capital efficiency of the business To control the quality of input materials requires businesses to develop a strict quality control process for suppliers The author had the opportunity to learn and access the supplier quality management process of Datalogic Vietnam Co., Ltd., a subsidiary of Datalogic Group At there, Datalogic Group has built a strict supplier quality management process However, when applied to practice still exist some limitations Therefore, the author decided to select the topic "Analysis reality situation of supplier quality management at Datalogic Group" as a research topic for this graduate thesis Wishing to analysis and propose solutions to improve the efficiency of supplier quality management at the group Research objectives − To understand the supplier quality management process at an enterprise specializing in the production of data collection equipment − To analyze and evaluate good point, limitations in the supplier quality management process of Datalogic Group − To recommend some solutions to help overcome limitations, to improve the quality management of suppliers from an industrial management student outlook Research scope − The research focused on the Purchasing Department and Quality Department at Datalogic Group The main documents used in the years 2015-2019 − Research time: from 24th July 2019 to 8th May 2020 Research methodology − Observing reality − Comparison, general analysis based on documents, secondary data related to supplier quality management Page − Participate directly in the actual process to gain a better understanding of supplier quality management Report structure The report is composed of chapters, which are: − Chapter 1: General introduction about Datalogic Group − Chapter 2: Literature review − Chapter 3: Analyze the implementation of supplier quality management at Datalogic Group − Chapter 4: Evaluations and solutions Page CONTENT CHAPTER 1: GENERAL INTRODUCTION ABOUT DATALOGIC GROUP 1.1 General introduction about Datalogic Group 1.1.1 Preliminary introduction about Datalogic Group Datalogic Group was founded in 1972 by founder Romano Volta in Bologna, Italy Currently, Datalogic Group is one of the leading groups in the field of automatic data collection and automation processes With more than 45 years of establishment, Datalogic Group has achieved some outstanding achievements as follows: - 1,200 patents in multiple jurisdictions; - 11 research and development centers (in Italy, USA, China, and Vietnam); - Thousands of prestigious partners and customers deployed over five continents Today, Datalogic Group employs about 3,157 employees from 28 different countries worldwide There are 10 manufacturing and repair facilities in the United State, Brazil, Italy, Slovakia, Hungary and Vietnam Datalogic S.p.A (headquarters of Datalogic Group in Bologna, Italy) has been listed on the STAR segment of the Italian Stock Exchange since 2001 with the name DAL.MI Figure 1.1: Preliminary introduction about Datalogic Group (Nguyen, 2018) Page 1.1.2 History of formation and development From being a pioneer to a world-class enterprise in data collection Datalogic Group has always affirmed its ability in every stage with great changes stages are summarizing the formation and development process of Datalogic Group as follows: ❖ Stage 1: pioneers - 1972: Romano Volta founded Datalogic on the outskirts of Bologna, Italy In the direction of designing and manufacturing photoelectric sensors for textile, ceramic and packaging industries - 1974: Romano Volta opened a small office in Germany to distribute Datalogic products, international expansion was started here - 1976 – 1978: Datalogic started selling products in Japan, USA Datalogic also strengthened its sale network and customer service by establishing subsidiaries in European countries ❖ Stage 2: expending horizons - 1980: there was a strong drive towards research in the field of optical bar code reader The laser scanner was an exclusive product that makes Datalogic the leader in technology and standards in this field - 1984: the first barcode reader was applied at an airport in Milan – Linate - 1988: Datalogic opened new research, sales, and production In this decade, Datalogic had distributors, plants and subsidiaries in America, Europe, Africa and Oceania ❖ Stage 3: turning point - 1993: Romano Volta directed Datalogic to a new management organization An ambitious 3-year improvement plan to turn Datalogic into an internationally recognized, stable, industrial entity with results, reputation, and image This was a major turning point for Datalogic - 1995: a new production plant opened at Pescara - 1997: Datalogic acquired ID-Ware Mobile Computing & Communications (the largest European producer of portable terminals) - 1999: Datalogic achieved the world’s first application of RFID technology in a post office Page ❖ Stage 4: innovation for growth - 2000: the first self-shopping solution is created − Shopevolution - 2001: Datalogic is listed on the star segment of the Italian Stock Exchange with the name DAL.MI - 2002: Datalogic acquired Minec, a Swedish mobile device manufacturer - 2004: Datalogic acquired Laservall, a laser marking trading company - 2005: Datalogic acquired US PSC Datalogic became the third-largest company in the world for barcode readers, doubling sales Affirmation is the true pioneer in the field of barcode readers - 2006: Datalogic opened a new factory in Slovakia with an area of 5,400 m2 - 2008: Datalogic acquired Datasensor, a high-value transaction, confirming Datalogic's position in the field of industrial automation - 2009: Datalogic received the "Premio Imprese per l’Innovazione" award from the President of Italy - 2009: continuing to expand into Asia, successfully building a factory in Vietnam's hi-tech park - 2010: Datalogic acquired Evolution Robotics Retail, a company equipped with advanced image pattern recognition technology - 2015: Datalogic acquired 20% Caen RFID S.r.l, an Italian company leading in the field of RFID in the state of UHF frequency This acquisition created an opportunity for Datalogic to provide its products in the Nonfood Retail, Warehousing, and T&L segments ❖ Stage 5: flying higher - 2016: Datalogic recorded revenues of 576,5 million Euro and investing in research and development over 50 million Euro, had approximately 1,200 patents in multiple jurisdictions - 2017: Datalogic adopted a new strategy, transforming the company’s organization from a product-oriented one, to a customer-centric model 1.1.3 Vision and mission of Datalogic Group ❖ Vision: “A world identified, viewed, inspected, marked and verified by Datalogic.” (Datalogic S.p.A, 2019) Page ❖ Mission: “To provide customers in Retail, Manufacturing, Transportation & Logistics and Healthcare the best quality and efficiency in data collection and process automation, thanks to superior product technology, and extremely talented people.” (Datalogic S.p.A, 2019) 1.1.4 Main sectors of Datalogic Group After more than 45 years of establishment, Datalogic has gradually expanded its business in size and field of operation Based on data collection technology, Datalogic has defined manufacturing and business areas based on customer needs Specifically, Datalogic aims at four main sectors, namely the four main product consumption groups As follows: retail, manufacturing, health care, transportation and supply chain Figure 1.2: Four main sectors of Datalogic Group (Synthesis of the author) 1.1.5 Business strategy ❖ The objective: to keep constantly growing above market average, while significantly improving profitability ❖ Scope: Datalogic remain a product company with new emphasis on solutions to satisfy the needs of End-Users in the following industries: Retail; Manufacturing; Transportation & Logistics; Healthcare ❖ The advantage: Datalogic moving from a Product-Centric company to a Customer-Centric company, leveraging on its wide range of products, that can fulfill its customers’ needs for both data collection and process automation and providing end-to-end solutions across the entire flow of operations Page 1.1.6 Some core products Currently, Datalogic focuses on producing and trading main product groups, namely: Hand Held Scanners, Mobile Computers, Fix Retail Scanners, Scan Engines, Safety, Laser Marking System, Sensor, Vision Systems and RFID ❖ Hand Held Scanners Figure 1.3: Product group Hand Held Scanners (Synthesis of the author) ❖ Mobile Computers Figure 1.4: Product group Mobile Computer (Synthesis of the author) ❖ Fix Retail Scanners Figure 1.5: Product group Fix Retail Scanners (Synthesis of the author) ❖ Scan Engines Page Figure 1.6: Product group Scan Engines (Synthesis of the author) ❖ Safety Figure 1.7: Product group Safety (Synthesis of the author) ❖ Laser Marking System Figure 1.8: Product group Laser Marking System (Synthesis of the author) ❖ Sensor Figure 1.9: Product group Sensor (Synthesis of the author) ❖ Vision Systems Page S K L 0 ... IMPLEMENTATION OF SUPPLIER QUALITY MANAGEMENT AT DATALOGIC GROUP 22 3.1 Supplier quality management process 22 3.1.1 Four phases of supplier quality management 22 3.1.2 Supplier quality. ..MINISTRY OF EDUCATION & TRAINING HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY AND EDUCATION FACULTY OF ECONOMICS GRADUATE THESIS TOPIC: ANALYSING REALITY SITUATION OF SUPPLIER QUALITY MANAGEMENT AT DATALOGIC. .. Quality management 13 2.3 Supplier quality management 14 2.4 Application of the perspective of total quality management to supplier quality management 2.5 14 Supplier