MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY -------------------- NGUYỄN PHỤNG HIẾU EVALUATING THE PERFORMANCE OF SUPPLY CHAIN MANAGEMENT AND SOLUTIONS: A CASE STUDY OF THAI BINH SHOES MASTER OF BUSINESS ADMINISTRATION THESIS Ho Chi Minh City, 2010 TIEU LUAN MOI download : skknchat@gmail.com MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY -------------------- NGUYỄN PHỤNG HIẾU EVALUATING THE PERFORMANCE OF SUPPLY CHAIN MANAGEMENT AND SOLUTIONS: A CASE STUDY OF THAI BINH SHOES Major: Business Administration Major code: 60.05 MASTER OF BUSINESS ADMINISTRATION THESIS Supervisor: Dr. Trần Hà Minh Quân Ho Chi Minh City, 2010 TIEU LUAN MOI download : skknchat@gmail.com Aknowledgement I would like to express my heartfelt gratitude and deepest appreciation to my research Supervisor, Dr. Tran Ha Minh Quan for his precious guidance, share of experience, ceaseless encouragement and highly valuable suggestions throughout the course of my research. Besides, I would like to extend my sincere thanks to Prof.
Ms Ta Thi Bich Thuy, for her valuable comments and constructive suggestions on the theory foundation and the APA format from early draft of my thesis. My special gratitude is extended to all instructors and staff at Faculty of Business Administration and Postgraduate Faculty, University of Economics HoChiMinh City (UEH) for their support and the valuable knowledge during my study in UEH. I would also like to avail this opportunity to express my appreciation to Professor Nguyen Dong Phong and UEH Board of Directors for creating MBA program in English. Specially, my thanks also go to to many of my collegues from Shoes Secteur in Decathlon company, who have helped me during the collection of data as well as support me during doing research: Ms.
Nguyen Thi Hoai Trinh (Supply chain production leader), Mr Nguyen Du Thuan (Development Industrialization Production Leader), as well as Mr Nguyen Thanh Son from Board of Director, Ms. Phan Thi Thu Thao, Ms. Ngo Ngoc Thy, Mr. Phan Van Phuong and other staffs of Production& Planning, Costing, Purchasing…Departments in TBS Group.
Many thanks to Ms. Nguyen Thi Kim Anh, Mr. Nguyen Thanh Trung, as well as the other classmates in MBA class, Batch 16 for their valuable and enthusiastic support for this research study. Last but not least, the deepest and most sincere gratitude go to my beloved mother, my husband Mr Nguyen Le Thanh Vinh for their boundless support, abundant love and encouragement throughout my period of study.
I, therefore, dedicate this work as a gift to them all. i TIEU LUAN MOI download : skknchat@gmail.com Abstract Nowadays, the wide application of supply chain in most of business has been observed. Based on this, there are many improvements in customer’s reliability and speed of order fulfillment. The impacts of supply chain on business’s activities were examined in reality.
This experimental study will seek to discuss more detail in the Chapter 2,3,4. The function of supply chain management is to design and manage the processes, assets, and flows of material and information required to satisfy customers’ demands. The evaluation Supply chain management‘s performance is more important in most of companies. Author chose TBS Group – one of biggest footwear enterprises with their supply chain management (SCM) for her research study.
Through key indicators to measure SCM’s performance at TBS, author will generalize the statement problem which still exist in TBS’s SCM and have deeply understanding about TBS’s production planning and their organization of shoes process. Recommendations with concrete solutions for related entities concerning pending problem of TBS such as the delivery on time, quality, cost and lead time are suggested to improve the supply chain management of TBS Group. Keywords: supply chain, supply chain management, key indicator to measure, performance; delivery on time, quality, cost and lead time, production planning. ii TIEU LUAN MOI download : skknchat@gmail.com Contents Acknowledgement.
iii List of Tables. iv List of Figures. vi CHAPTER 1: INTRODUCTION. Scope and limitations.
Structure of thesis. 4 CHAPTER 2: LITERATURE REVIEW. SUPPLY CHAIN AND SUPPLY CHAIN MANAGEMENT DEFINITIONS. FRAMEWORK OF SCM FROM PRODUCTION SIDE .3 KEY INDICATORS OF EFFECTIVE MEASUREMENT IN SCM.
10 CHAPTER 3: THAI BINH FOOTWEAR JOINT STOCK AND THEIR SUPPLY CHAIN MANAGEMENT. GENERAL VIEW OF LEATHER AND FOOTWEAR INDUSTRY IN VIET NAM. THAI BINH FOOTWEAR JOINT STOCK TBS Group)’S BACKGROUND………………. SUPPLY CHAIN MANAGEMENT IN TBS GROUP.
MEASUREMENT SCM IN TBS GROUP. Current indicators of TBS to measure the SCM’s performance. 35 CHAPTER 4: CONCLUSIONS AND RECOMMENDATIONS FOR TBS GROUP’S IMPROVEMENT IN SCM. RECOMMENDATIONS OF THE RESEARCH STUDY:.
Self-contained process. Simplification of major processes. Upgrade the system or expand sub-contract supplier. Design main style of product with investment.
Outsourcing the satellites factories. LIMITATIONS AND FURTHER RESEARCH:. 58 APPENDIX 1: Guide for Interview & Questionaires. 59 List of interviewees.
61 APPENDIX 2:Key Figures of TBS Groups. 62 iii TIEU LUAN MOI download : skknchat@gmail.com List of Tables Table 2.1 Framework of production planning.1 Sharing percent of Vietnam’s export market…………………………….2 Interviewees and statement concerning to SCM.3 Shipment report of TBS from week21-week 25, 2010….4 Quality control of TBS from the beginning until shipment.5 Top 10 models in TBS with quality high return rate.6 Situation of lead time at TBS Groups before for some typical model….7 Lead time flow in production of TBS Groups.44 iv TIEU LUAN MOI download : skknchat@gmail.com List of Figures Figure 2.1 Basic flow of SCM (sited of Decathlon company).2 Basic Quality Control (From Quad tool of Decathlon Company)………….1 % Delivery on time of TBS through years for Europe Customer.2 Global lead time 2008 of TBS.3 Replenishment lead time 2008 of TBS…………………………………….4 Derivation of basic cost elements.47 v TIEU LUAN MOI download : skknchat@gmail.com Abbreviations SCM: Supply chain management DOT: Delivery on time LT : Lead- time TBS: Thai Binh Shoes EU: Europe FDI: Foreign Direct Investment Lefaso: Vietnam Leather and Footwear Association OEM: Original Equipment Manufacturing R&D: Research and Development QFD: Quality Function Development LOP: Labor cost, Overhead and profit EDI: Electronic Data Interchange TMS: Transportation Management System SQC: Statistical Quality Control vi TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 1: INTRODUCTION 1. PROBLEM STATEMENT: Nowadays, Supply chains are becoming increasingly global and ever more complex. In addition, organizations also want try to support strategic management practices such as entering new markets, controlling business activity in a good system, increasing the pace of new product introductions, improving customer satisfaction.
Thus, for organizations to work closely with their suppliers, logistics providers, distributors and retailers, their supply chains must be streamlined and technology-enabled. However, the full understanding about supply chain management (SCM) and its application in the real organizations are different among enterprises. Assessing the performance of SCM is necessarily indispensable in the period and Thai Binh Footwear Joint Stock is the case at point, especially when Thai Binh is one of biggest footwear companies of Vietnam. On the other hand, Thai Binh also has a full supply chain from the beginning of material purchase until the finished product among footwear enterprises.
The results from the evaluating supply chain management of Thai Binh can be used to refer for the application of SCM in real enterprises. Importantly, this research will outline how supply chain management is an important part in business activities, from production view, especially in footwear industry. Through working few years as supply chain leader, the real problems in applying supply chain management in general and in Thai Binh Footwear Joint Stock- one of typical 1 TIEU LUAN MOI download : skknchat@gmail.com footwear company of Vietnam in particular can show the function and physical structure supply chain management as well as the inner problems in key indicators to measure SCM’s effectiveness. I will go to the detail to state clearly my understanding in literature review and analyze bottle neck in this company (Chapter 2&3).
Although TBS Group owns one strong supply chain, in their management, it still exist some problems, especially with main key indicators that use to measure the efficiency of their supply chain. By analyzing the situation arising at SCM of TBS Groups, the author reveals that the delivery on time (DOT) at TBS still faces some big delay. Besides, Thai Binh controls well the orders but lead time of order processing is too long. Concerning to the quality, whether TBS can produce the shoes in good quality, there are many additional steps and they need to control more to follow the good and do the traceability when there is any problem arising at destination.
For the cost, the author would like to analyze deeply the detail of production cost and investigate why the cost of TBS is still higher than other competitors in footwear field. By examining the concrete footwear company Thai Binh Joint Stock, the author will show out the main purpose of this study, that is to find the solutions to improve their production planning in order to ensure the rate of delivery on time (DOT), reduce lead time, control quality figure, optimize the cost in supply chain management. RESEARCH OBJECTIVES: The primary objective of this study is to present the important role of supply chain in a footwear company, to identify key drivers to measure the performance of supply chain 2 TIEU LUAN MOI download : skknchat@gmail.com management and their inter-relationship in SCM. It would be an interesting study to tackle all inner problems at TBS Group on delivery and production planning and have a deeply understand on lead time break down in order to improve it, manage quality and cost- all key indicators to measure supply chain management in order to satisfy more and more customers in footwear industry.
RESEARCH QUESTION: The questions raise some critical points on the topic. In lieu with this, the study will answer the following research questions: 1. Which causes have big impact on DOT, lead time, quality and cost in SCM from production view at TBS Groups? 2. What solutions can be made to improve the SCM of TBS Groups? 1.
SCOPE AND LIMITATIONS: The study will particularly focuses on Thai Binh Joint Stock Footwear business from production view to clarify the real application flow of SCM as well as their SCM’s control comparing to the theory. METHODOLOGY: The research takes most principles of SCM from the experiments and reality application in footwear Company. Information will be summarized to show the impact of SCM to business activities from procurement of materials to delivery finished product to customers. Furthermore, by analyzing the case studies of a shoes company with the implementation of SCM, the research identifies the real impact of the key indicators of SCM on business operations and outlines the practical flow from material to finished good.
3 TIEU LUAN MOI download : skknchat@gmail. RESEARCH RATIONALE: The study also helps us to understand the various factors of SCM as well as their influences on supply chain. Analysis from this study will improve our understanding of measurement of SCM’ s effectiveness through the scales: Delivery on time, quality, lead time and cost and result findings will lead us to the solution of improvement in these scales to obtain the well control SCM in footwear company. STRUCTURE OF THESIS: The thesis is presented in 4 chapters: CHAPTER 1 Introduction: give general information about the problem.
CHAPTER 2 Literature review with the theoretical supply chain management, its application, element and the framework of effectiveness measurement. CHAPTER 3 Thai Binh footwear joint stock and their supply chain management CHAPTER 4 Conclusion and Recommendations for TBS Group’s improvement in SCM 4 TIEU LUAN MOI download : skknchat@gmail.com CHAPTER 2: LITERATURE REVIEW 2. SUPPLY CHAIN AND SUPPLY CHAIN MANAGEMENT DEFINITIONS: Why do so many people spend so much time on thinking, writing and doing SCM? The answer is that it is a considerable source of competitive advantage in the global market. The fierce competitions in today’s markets is led by advances in industrial technology, increased globalization, big improvement in information availability, plentiful venture capital and supply chain management (Bovet & Sheffi, 1998).