UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ VU THI BICH HOP FINAL THESIS LACK OF CAREER GROWTH OPPORTUNITY IN OPERATION DEPARTMENT AT THI GROUP VIETNAM HCM BRANCH MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 1 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ VU THI BICH HOP FINAL THESIS LACK OF CAREER GROWTH OPPORTUNITY IN OPERATION DEPARTMENT AT THI GROUP VIETNAM HCM BRANCH MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2019 2 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONTENTS EXECUTIVE SUMMARY. 4 CHAPTER I: INDUSTRIAL OVERVIEW AND COMPANY BACKGROUND. 8 CHAPTER II: PROBLEM JUSTIFICATION .1 Problem finding process .2 High turnover rate in Operation Department .1 The Initial cause-effect map .2 The Updated cause-effect map .3 The Final cause-effect map. 24 CHAPTER III: ALTERNATIVE SOLUTIONS .1 List of real causes.1 Lack of training .2 Lack of knowledge sharing .3 Lack of orientation .4 Lack of promotion .1 Solution 1: Provide an effective orientation program .2 Solution 2: Provide an official training process .3 Solution 3: Open sharing session between teams .3 Alternative sets of solution.
37 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Objective of action plan .2 Timeline and Cost. 40 CHAPTER IV: SUPPORTING INFORMATION .2 Questionnaire for the existence of problem .3 Questionnaire for the chosen set of solutions. 68 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LIST OF FIGURES Figure 1: Organization Structure. 9 Figure 2: The initial cause-effect map.
19 Figure 3: The update cause-effect map. 23 Figure 4: The final cause-effect map. 26 Figure 5: Solution Map. 34 Figure 6: Sets of solutions.
37 LIST OF TABLES Table 1: Summary revenue of THI Group in 3 years ··············································· 11 Table 2: Operation Department customers’ situation ··············································· 12 Table 3: Turnover rate of operation department ······················································ 14 Table 4: The result of survey ···················································································· 38 Table 5: Cost-benefit analysis ··················································································· 39 Table 6: Timeline and estimated cost for Solution 1················································· 41 Table 7: Timeline and estimated cost for Solution 2.1·············································· 42 Table 8: Timeline and estimated cost for Solution 3················································· 42 5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ACKNOWLEDGEMENTS I would like to express my gratefulness for the period two years studying in ISB Ho Chi Minh City. I also would like to express my deep sense of gratitude to Dr. Thu Phan for her valuable guidance, keen interest and especially encourage me at various stages of doing this thesis. Besides, I would like to thank my family; friends who always stand by me to support me finish this thesis well.
Especially, many thanks for my colleagues who gave me valuable information and advices so that my thesis can be done well. 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com EXECUTIVE SUMMARY This study analyzes the case in Operation Department of THI Group Viet Nam Ho Chi Minh Branch with the symptoms are high turnover rate and the declining in revenue of Operation Department. There are three main chapters in this paper. In chapter I, an overview of the logistics industry as well as the background of the company THI Group Vietnam will be introduced.
Chapter II will be all about the existing problem in the department. Firstly, based on the primary and secondary data, there are two symptoms low revenue and high turnover rate found out. After that, through depth-interview with some related people, a problem mess is figured out on the initial cause-effect map. Next part is the updated cause-effect map, in this section three potential central problem are figured out based on the information from interview and literature review.
Finally, the final map with all details about the central problem is demonstrated. The central problem is lack of career growth opportunity, which lead to many consequences; thus, it has been chosen as a central problem, which need be solved in this paper. Chapter III is included a list of real causes of the central problem and a set of solutions for the problem. In Chapter IV, all supporting information for this paper is indicated.
7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER I: INDUSTRIAL OVERVIEW AND COMPANY BACKGROUND 1.1 Industrial Overview Vietnam grows vigorously in trade over the coming years, which will support for the development and expansion of logistics industry, one of the fastest growing industries in Vietnam. There are many main logistics hubs in Viet Nam which are located in the North including Ha Noi – Hai Phong area and in the South, Ho Chi Minh City area, Dong Nai province, Binh Duong province as well as Ba Ria - Vung Tau. The logistics industry is estimated to grow at a pace faster than the GDP growth rate, and currently, the logistics service accounts for 15-20% of GDP in Vietnam. There are many parties involved in this industry, such as liner who are owners of vessels to transport cargo, forwarding company, the manufacture, the seller, the buyer, custom official, trucking company and so on.
All these parties will cooperate to serve customers by taking cargo from supplier and delivering to the final customer.2 Company Background THI Group Viet Nam is one forwarding company, which belongs to a Taiwan Group and was established in 2004 in Ho Chi Minh City. Now, it is one of the leading international logistics service providers in Vietnam with branches. With almost 150 friendly and professional staffs working in four offices together with a reliable and robust partner network in the world, it serves every single demand of customers’ shipment at any corner in the globe. History Timeline 2004 THI Group Viet Nam was founded in Ho Chi Minh City 2005 Set up Ha Noi and Hai Phong Branch 2015 Set up Da Nang Branch Vision THI Group will be a global company, providing professional logistics services, keep creating value for society and its people.
Mission The mission of THI Group is offering modern, integrated logistics solutions to customers based on the creativity and the ongoing optimization of our operations through our team. 8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com The main business of THI Group Viet Nam – HCM Branch Ho Chi Minh Office is head office of THI Group Viet Nam, and it provides all logistics services to all customers around the world. It provides customs brokerage service to customers. In addition, with a global agent network, THI Group is able to provide its clients import and export FCL and LCL services from anywhere to Vietnam or from Viet Nam to any country around the world at most competitive rates.
Especially, THI Group operates regular import and export airfreight consolidation to and from cities throughout the world using our network. Organization Structure General Director Accountant Operation Sales Pricing Admin and HR Department Department Department Department Department Figure 1: Organization Structure 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CHAPTER II: PROBLEM JUSTIFICATION 2.1 Problem finding process In order to identify the existing problems of the company, the following steps will be executed: - Referring to the reports from the company as well as from Operation Department to collect and analyze data. - Conducting the depth interview with the related people, including Operation Manager, Admin Staff, Current Operators and Old Operators to understand the division symptoms and possible problems. - Conducting a small survey to get data from a number of employees in three departments: Accounting Department, Operation Department and Sales Department to affirm the existence of central problem in the department.
- Review the literature and theory, which is relevant to the problem.1 Low Revenue As per information from the previous part, logistics industry is strongly developing in Vietnam, many forwarding companies are founded around the country, they grow very fast from year to year, and below is data about the revenue of five companies in three years: Unit: USD Seq Company 2016 2017 2018 1 Bee Logistics 8,638,105 9,537,682 9,767,562 2 Everich Vietnam 7,046,294 8,465,738 8,864,321 3 VVMV 6,830,976 7,341,986 8,024,673 4 Eculine 6,793,746 7,145,763 7,737,945 5 ANC VietNam 5,734,144 6,542,986 7,097,023 Table 1.1 Revenue of logistics companies Source: www.com It can be seen clearly that, the revenue of above companies is increased year by year, these companies have same background with THI Group Vietnam. Back to THI 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Group Viet Nam, according to financial report, the revenue of the company THI Group (HCM Branch) in three years 2016, 2017 and year 2018 has big gaps. Especially, the revenue of year 2018 is lowest in the period of 3 years; details are as the following table: Unit: USD Year Sales Department Operation Department Total of Company 2016 1,158,960 1,796,335 2,955,295 2017 1,023,457 1,289,210 2,312,667 2018 1,167,987 911,017 2,079,004 Table 1: Summary revenue of THI Group in 3 years As mentioned in previous part, the main business of THI Group is about logistic field. In the company, there are two types of customers, nominated customers and freehand customers.
In the company, Sales Department will be in charge of freehand customers and Operation Department will handle all nominated customers that is the reason why there are two kinds of revenues as above, one is from Sales Department and one is from Operation Department. Follow the data from above table, it can be seen clearly that compared among three years 2016, 2017 and 2018, then 2016 has the highest revenue. Indeed, the revenue of 2016 is 2,955,295 USD, meanwhile in 2017 it dropped to 2,312,667 USD, nearly 22% is decreased and the worst is in 2018, 2,079,004 USD, nearly 30% decreased compared to 2016. The percentage 30% revenue drop is a considerable number for a company to pay attention.
Especially, compared with the revenue of other companies, revenue of THI Group VietNam is very low. With the same background, they have more than five million USD per year; meanwhile THI has just no more than 2 million USA per year. Thus, it can be concluded that revenue of THI is too low. 11 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Besides that, according to the monthly and annual report from Operation Department, a big number of nominated customers has terminated the services contract with company; in addition, number of new customers signing contract is lower than previous year.
This information is also confirmed by data recording as below table: Year 2016 2017 2018 Total number of customers 297 100% 279 100% 238 100% Number of customers stop using THI 55 19% 62 22% 71 30% Group’s service Number of new customers signing contract 37 12% 21 8% 18 8% with THI Group Table 2: Operation Department customers’ situation In 2016, the company has total 297 nominated customers, however through the year, there are many customers left the company and the specific number is 55 customers stop using the service of company, 19% customer stopped using service of the company. Meanwhile the number of new contracts is lower than the number of terminating, and there are only 37 new customers in 2016, there is only 12% new customer compare with the total. This caused to the drop in 2017, there are only 279 customers for total, nearly 7% drop compared to 2016. The most important thing is that there are many customers chose to leave the company in 2017 than 2016, and especially there are only 21 new customers for this year.
Based on the table, it can be seen clearly that the percentage of new customer is decreased year by year. In the meantime, the percentage of terminating is increased, the highest is in 2018, 30%. In all industries, it is too hard to approach and win a new customer, especially in logistics field, one of the most competitive services in Ho Chi Minh City.