FINANCIAL TECHNOLOGY AND OTHER RELATING ISSUES
6. Case study: A proposed cloud-ERP framework for GIOGARCO Enterprise
Gio Linh Garment & Trading Joint Stock Company (GIOGARCO) is an enterprise located in Quan Ngang Industrial Park of Quang Tri, a province in the Central region of Vietnam. The company has many years of experience in manufacturing and trading in the garment industry. The company currently has an average output of 100,000 standard products/month3. The main products are jackets, polo shirts, jackets, and sportswear. The company's products are currently being exported to Europe, North America, Japan, Taiwan, and Korea. The enterprise composes 11 sewing lines with more than 600 machines and other automatic cutting machines to meet the garment industry's high quality and increasingly diverse requirements of fashion design. In terms of labor, more than full-time 500 employees are engineers, professional technicians, and workers currently working in the factories. The enterprise's development strategy focuses on shifting from the CMT method to FOB export in the forthcoming years. In its current strategy, the enterprise intends to develop and build another garment factory to create jobs for more than 1,000 local workers and increase the annual production capacity to over 3 million products. For successfully realizing this strategy, GIOGARCO urged to embrace digital transformation. The leading managers of the firm recognize the importance to develop a plan for digital transformation to ensure their survival and future development,
In terms of the current state of the I.T. application at GIOGARCO, the company daily handles and stores operational data. However, it is mainly by Excel spreadsheets and separated and disintegrated software such as accounting and payroll management. Although aware of the importance of I.T. applications in their business operations, the managers face many difficulties in their current digitalization status that gains minimal efficiency. Therefore, the company desires to deploy an overall enterprise management information system to optimize the available resources. Especially, GIOGARCO prioritizes the deployment of automatic tools to transform production management digitally from the planning stage to monitor production lines' implementation progress in the factory.
6.2. A proposed framework of cloud-ERP solution for GIOGARCO
The garment is a unique manufacturing industry because the assembly line is composed of many specific stages. Each stage has its production process, which is complex and includes many sub-production functions. Meanwhile, the production runs under many criteria from the retailer's order. Along with the production line, the activities such as sales tracking, raw material supply, and line balancing have to be observed and managed strictly.
Therefore, separated and disintegrated applications could not take full advantage of the enterprise resources to achieve high efficiency in production.
3 http://giogarco.com/gioi-thieu-2/
To suggest an appropriate and overall I.T. solution for GIOGARCO, we need to identify which processes they need to transform and map out an optimal digital transformation process with the support of a technology solution. Figure 5 is the basic working process in the GIOGARCO production line. It starts with the stage (1), where orders and contracts are processed, then provides designing or sewing samples for orders or contracts. The sewing sample is the primary stage for building the sewing process for the assembly lines in actual production. The sampling is the basis to determine the level of material (BOM). BOM (Bill of Material) is a list of raw materials needed to be sourced to make a garment and make it ready for shipment as per the buyer's requirement. It is also essential to define production costs, raw materials inventory, and other production plans in the production management process.
Phase (2) is production planning. First, the warehouse department will check the fabrics, accessories, and other input materials for the production process. Next, the human resources department assigns personnel to the sewing lines. When the production plan and the labor arrangement plan are completed, the lines go into production.
Stage (3) is the stage when the line goes into production. In the production process, the sewing line manager needs to evaluate the efficiency of each line to maximize work capacity while minimizing working time. Usually, a sewing line is divided into many stages of sewing each small part, then assembling the details into a finished product. The workers will take on one or more of these steps to complete it, leading to some workers working at total capacity.
Others have to wait because the time to perform different work steps is different. To minimize this waiting time, the line manager needs to find a way to distribute the work properly to create a balance for the sewing line.
In the production process, the final stage, stage (4), is the management of output finished products and inventory of finished products.
After evaluating the current status of digital transformation and the production process of GIOGARCO, we have proposed a cloud-ERP solution with eight modules designed explicitly for garment enterprises, focusing on the management tasks in the production lines of a garment factory. In corresponding to the four above-listed stages in the workflow of a garment factory, this proposed cloud-ERP solution includes the following specific modules:
Under phase (1) in the working process of garment factories (the stage of receiving orders and contracts and designing or sewing samples for orders or contracts), our proposed cloud-ERP system will compose the Sales and Order Management Module.
Following phase (2) in the working process of garment factories (production planning stage), our cloud-ERP system will be proposed, including a module so-called Planning Management Module. This stage requires preparing the fabric and accessories from the warehouse for the production process and allocating personnel to the sewing lines. Therefore, to support the production and planning stage, the cloud-ERP system includes two additional modules: the Human Resource Management Module and Inventory Management Module.
For phase (3) in the working process of garment factories (the production line), our cloud-ERP system will be proposed, including a Production Management Module and Assembly Line Balancing Module.
Corresponding to the final stage, stage (4) manages finished output products and inventory in the production process. Therefore, the proposed ERP system includes a Productivity Management Module.
The final is the System Management Module that manages all the transactions of users in the cloud-ERP system. In total, these eight modules have mutual interaction, connecting all business processes in the enterprise into a joint and single database to allow users to build reports and analyze analysis on the same dataset in real-time, without any manual data merging. The data needed for production is also provided quickly, helping businesses make easier decisions, simplifying management and collaboration across departments.
Figure 5: Basic working stages in the GIOGARCO production line
In terms of system architecture, our proposed cloud-ERP system has three-tier architecture, including: (1) Client tier: This layer allows the client to send a request to the web server; (2) Middle tier: This layer is considered as the webserver layer and the application service layer, which is the logical layer between the client interface and the database; and (3) Data tier: It is the database layer that stores and manages the data. This system architecture is illustrated in Figure 6. The middle and data tiers are subjected to the control and responsibility of the cloud service provider. The advantage of this three-tier architecture is that it will perform very well even when the number of users increases significantly. Therefore, expanding the system also becomes easier by adding more server components. Nevertheless, its most significant limitation is that the system will be more complex with the surge in the communication messages between layers.
Figure 6: The architecture of our proposed cloud-ERP system
Our cloud-ERP system will be offered as a SaaS, which means a software-as-a-service model. For this solution, the service provider will be responsible for all the necessary tasks, including managing the database, configuring network infrastructure, providing and maintaining hardware and applications. The system will be "stored in the clouds." The servers are managed and taken charge of by the cloud-ERP provider. The only thing that enterprise users need to do is do some system configuration to suit the business situation. Users access the application through web browsers and pay the usage fee according to their demands. With this solution, businesses only need to pay for their services instead of buying the whole system. Companies also will not have to worry about service maintenance or hardware infrastructure management. The modules with various management functions are offered as a service on the Internet instead of software packages purchased by individual customers.
7. Conclusion
Many pieces of research have been carried out on the technical, functional, and managerial issues of ERP. Still, a few are available specific to ERP functioning and usage in the textile and apparel industry. This paper has described the current situation of the textile and apparel enterprises in Vietnam in the urgent need to implement a suitable ERP solution that can help them boost their productivity and competitiveness. We emphasize the benefits of the emerging cloud-ERP application for Vietnamese textile and apparel enterprises in their road towards overall digital transformation. In this circumstance, we have introduced a case study of a specific small and medium-sized enterprise in the central region of Vietnam, named GIOGARCO, which successfully deployed our framework of cloud-ERP. As a result, the application of ERP meets their current situation and helps them solve the challenges in the production line. This framework is a system with three-tier architecture and composed of eight modules, including not only the basic management modules such as inventory management, sales and order management, human management, but also the very specialized modules for the exceptional characteristics in planning, production, and balancing assembly lines in textile and apparel factories.
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APPLICATION OF TRACEABILITY TO MANAGE PRODUCTS IN VIETNAMESE ECONOMY: OPPORTUNITIES, CHALLENGES, AND SOLUTIONS
Dao Ngoc Linh Thuongmai University
Abstract
Traceability (TXNG) is becoming a trend that many people are interested in these days. In the digital transformation within the industrial revolution 4.0 (Industry 4.0), traceability is known as the solution to solve the counterfeit, imitation goods, and low-quality goods consumed in the market. At the same time, traceability is the foundation for supply chain optimization in the 4.0 economy. Therefore, TXNG is becoming a hot issue of global concern. Vietnam has also accepted and is gradually approaching this trend as an inevitable thing as Vietnam has moved towards globalization, international economic integration, and trade liberalization since 1986. The application of TXNG technology to manage products is an opportunity for Vietnam to reach out to countries with high and demanding requirements for products quality. In recent years, applied traceability technology to manage products, goods in Vietnam has increased the transparency and clarity of products information. Then, promoting domestic product consumption and export, contributing significantly to the economic growth of the country. However, besides the opportunities, there are many challenges that Vietnam needs to overcome.
Keyword: Traceability, Products Management, Opportunities, Challenges, Vietnam.
1. Introduction
21st century is the era of the industrial revolution 4.0. The world and Vietnam recognize the remarkable development of technology and science in this era. The growth of science and technology has had a massive impact on all areas of the socio-economic life of countries worldwide. Applying 4.0 technology in production and business has risen as a worldwide trend in which organizations have to compete fiercely in domestic and international in the current context. Organizations that take advantage of opportunities, invest and succeed in applying 4.0 technology have all gained theirs' competitive advantages.
Among those technology applications, traceability has emerged as a new trend that has attracted much attention recently, especially in the era of digital transformation. Traceability has a very significant role in the business activities, import, and export of enterprises. The successful application of the traceability system will help organizations take advantage of innovations, improvements, and the rapidity of science and technology, contributing to more effective management and business.
Traceability is no longer unfamiliar to enterprises, consumers, and stakeholders over the world. In most developed countries, traceability is a crucial and mandatory element for many types of products. The number of counterfeit goods, imitation goods, poor quality goods, products of unknown origin, etc., is increasing rapidly. Applied successful traceability systems help organizations create customers' trust, create transparency about their products' quality. However, this technology is still new to Vietnamese organizations and businesses.
Therefore, Vietnamese enterprises cannot avoid difficulties and challenges when applying traceability. According to the Import-Export Department, traceability is a common requirement for export-import items. In other words, if Vietnamese businesses want to access potential markets, they need to be aware that traceability is a requirement that they have to fulfill whether they like it or not. Faced with this situation, studying the opportunities and challenges when applying traceability is necessary for businesses in Vietnam. Since there, the proposed solutions will contribute to promoting and encouraging the application of traceability in Vietnam. Vietnam can catch up with the trend of the world, increase its enterprises' competitiveness within the region and the world.