UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Pham Hong Phuong THE STOCK SHORTAGE OF FINISHED GOODS AT WAREHOUSE: A CASE OF PASTEUR STREET CRAFT BEER AND RESTAURANT CO., LTD MASTER OF BUSINESS ADMINISTRATION Ho Chi Minh City – Year 2020 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Pham Hong Phuong THE STOCK SHORTAGE OF FINISHED GOODS AT WAREHOUSE: A CASE OF PASTEUR STREET CRAFT BEER AND RESTAURANT CO., LTD ID: 22180025 MASTER OF BUSINESS ADMINISTRATION SUPERVISOR: NGUYEN PHONG NGUYEN Ho Chi Minh City – Year 2020 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONTENTS EXECUTIVE SUMMARY. 6 List of tables. 7 List of figures .1 Overview of the craft beer industry.1 Sale volume does not achieve planned sale volume .2 An increasing of the number of customers stop buying Pasteur Street beer .3 An increasing number of customer complaint .1 The initial cause-effect map .1 Customers stop buying Pasteur Street beer .2 Feedback from customers about the quality.2 Updated cause-effect map .1 Inefficient marketing activities.2 Ineffective sale activities .1 Lack of information sharing .2 Shortage of materials. 44 3 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.3 Inaccurate sale forecasting .1 Alternative solution 1: Applying Sale & Operation Planning .2 Alternative solution 2: Applying Enterprise Resources Planning.
54 7 CHANGE PLAN DESIGN .3 Action plan implementation .4 Organization of Pasteur Street Brewing Company. 72 4 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com EXECUTIVE SUMMARY Recently, the financial statement of Pasteur Street Craft Beer and Restaurant Co., Ltd has experienced a drop in revenue, in specific, the sale volume of the wholesale channel in Ho Chi Minh does not achieve planned sale volume. To discover the problem that Pasteur Street Craft Beer and Restaurant Co., Ltd is facing, meeting with the CEO of the company, interview relevant persons such as Sales Director, Marketing Executive, Distribution Manager, and Production Manager, as well as pertinent data of 2019, was collected. Through interview relevant persons, analyzing data from the company, and use related theory, the main problem was identified as the stock shortage.
Finished goods are not available at Ho Chi Minh warehouse to deliver to customers that lead to a decrease in sales revenue of the sale department. Toward the main problem of out of stock, three potential causes had been found out are the lack of information sharing, the shortage of material, and the inaccurate forecasting. After analysis, the main cause that chosen to solve is the lack of information sharing. This study will propose solutions to solve the problem in order to help the company improve business performance.
5 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com Acknowledgments I would like to send my appreciation to my advisors Dr. Nguyen Phong Nguyen, who encourage, instruct, and support me to accomplish this master thesis project. It has been a pleasure working with you on this project. I would like to send my appreciation to other teachers during my journey in ISB.
I got a lot of education and experience in the past two years. That is meaningful education and experience, and I can apply this knowledge in my work to improve my performance as well as develop my career roadmap in the future. Also, I would like to thank my friends and family for greatly supporting me while I was working on my studies. 6 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com List of tables Table 1: List of product sale in Ho Chi Minh City wholesale channel in 2019 Table 2.
Actual sale volume in 2018 of the wholesale channels in Ho Chi Minh area Table 3. Sale volume of the wholesale channel in Ho Chi Minh City in 2019 Table 4. Number of customers stop buying Pasteur Street beer in Ho Chi Minh Table 6. List of customers who stop buying Pasteur Street beer Table 7.
List of products which receive customer complaints Table 8. Stock shortage of Pasteur Street beer in 2019 in Ho Chi Minh City Table 9. Cost for hiring Planning Manager and Planning Executive Table 10. Cost for investing ERP software Table 11.
Action plan List of figures Figure 1: Number of customer stop buying Pasteur Street beer per month Figure 2: Number of customer complaints about Pasteur Street beer per month Figure 3. Initial cause-effect map Figure 4. Cause and effect map Figure 5. Level of production planning at Pasteur Street Brewing Figure 6.
Fishbone diagram of the main problem in PSB Figure 7. Final cause and effect map (Author synthesis) 7 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.1 Overview of the craft beer industry. Since the 1970s, craft beer companies first appeared on the US market, and since then, the number of craft beer companies has increased rapidly in the long-term beer markets such as the US and Europe. Successful craft beer in the world market can be attributed to the following reasons.
One is that consumer tastes are increasingly seeking diversity and originality in flavor, something that mass-produced beer products do not have. Besides, craft beer companies are more flexible in terms of changes in consumers' tastes and preferences due to their small-scale production lines. On the other hand, the market of large breweries and craft breweries is not completely duplicated, since craft beer companies offer a wide range of products at different prices. However, in recent years, large breweries have begun to penetrate the craft beer market by acquiring small breweries themselves or creating their craft beer line.
Besides that, small craft beer companies also can grow thanks to the trend of changing consumer tastes. Thus, craft beer becomes a competitive market. In Viet Nam, craft beer has only developed in the past few years. Currently, there are 30 big craft beer brands in Viet Nam, in which Hear of Darkness, East-West, Platinum, Biacraft, Pasteur Street, Te Te, Fuzzy Logic, Seven Bright, etc.
However, many craft beers start joining the craft beer market because of the benefit of this market, and it is not difficult to joint this market. Thus, the craft beer market in Viet Nam become more competitive, and customers have multiple choice that is also a pressure for a craft beer company in Viet Nam. Moreover, craft beer company is facing with the limited policy from government such as the National Assembly passed a landmark bill on preventing harmful effects of alcohol, which includes blanket ban on driving after drinking for all types of vehicles and decree No 100/2019/ND-CP dated 30th, December, 2019 that impact significantly to business operation of the companies which sell alcohol drink. In the fact that number of consumer is decline when the decree No 100/2019/ND-CP is implemented.
8 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.2 Company introduction Pasteur Street Craft Beer and Restaurant Co., Ltd (PSB) is a private beer manufacturing company based in the Viet Nam, supplying craft beer to an outlet such as luxury hotel, restaurant, and their restaurant called Taproom. The company's mission is to produce high- quality craft beer by combining the best Vietnamese ingredients with professional American craft brewing know-how. The company employees nearly 150 people across a production site and 5 Taprooms. PSB was established in 2015 and grow faster in 2018-2019, and this rapid growth that shown some gaps or trouble of the company during its operation.
In the fact that in 2019 sale volume does not achieve the target of sale, even company set a target of sale based on historical data and business planning that is the reason why we need to find out problem and cause of this symptom to suggest a set of solution to solve this problem to gain PSBC's Vision: To become a craft beer company leading in Vietnam market. PSBC’s Vission To become craft beer company leading in Viet Nam market. PSBC’s Mission - To produce high quality craft beer by combining the best Vietnamese ingredients with professional American craft brewing know-how. PSBC’s Core value • Authentic • Quality Real American craft beer made to world Expatriate, best in class brewmasters sit on our board class standards.
and run our brewing operations to ensure our production meets the highest standards • Innovative • Local Create beer, test boundaries, and excite beer Keeping us true to our origin, we use Vietnamese drinkers with new ideas to ensure we remain sourced ingredients including jasmine, lemongrass, leaders in South East Asian craft brewing. cocoa and passionfruit to add intrigue to our core range of beers. 9 LUAN VAN CHAT LUONG download : add luanvanchat@agmail. SYMPTOM By interviewing with the CEO of PSB through intake meetings, he proposes that the current symptom of PSB is that the actual sales performance of wholesale channels in the Ho Chi Minh City area is lower than the sales target in 2019.
Over the past five years, we have successfully carried out our mission of bringing out the best of Vietnamese ingredients for awesome craft beers to make Vietnamese drinkers understand this lovely fresh quality and appreciate the joy of craft beer. However, in 2019 sales volume in the Ho Chi Minh area in the wholesale channel does not achieve the target as we planned, and we still receive negative feedback from our customers about our product. We need to review each aspect that influences our low sales: Sale operation, Marketing activity, Quality of product, and Production operation to find out the most effective solutions. Firstly, we understand the product and distribution channels of PSB.
In PSB, it has nine core beers, such as Jasmine IPA, Passion Fruit Wheat Ale, Saigon Saison, Viet Wiet, Irish Stout, Pasteur Street Pale Ale, Dragon Fruit Gose, Double IPA, Cyclo Stout, and three seasonal beers will be alternative. Almost Pasteur Street beers are packed in the kegs 20 liters, and some Pasteur Street beers are packed by can or bottle to diversify and create convenience for customers and consumers. In the domestic market, Pasteur Street beers were distributed by two channels that are Taproom of PSB and wholesale. Wholesale include Ha Noi, Ninh Binh, Sapa, Hue, Hoi An, Da Nang, Ho Chi Minh, Nha Trang, Phan Thiet, Phu Quoc.
In which the sale volume of Ho Chi Minh City area contributes 50% in total nationwide sale volume of wholesale channels and sale volume of Ho Chi Minh city in wholesale channel contribute 30% in total nationwide sale volume of both wholesale and Taproom channels. Thus, the sale volume of wholesale in Ho Chi Minh city does not achieve sale targets that impact to sale volume of the company and impact to sale revenue as well as the profitability of the company. Therefore, the improvement of the sale volume of the wholesale channel in the Ho Chi Minh City area has a significant advantage. In addition, understanding the problem, the root cause of the wholesale channel in the Ho Chi Minh City area, we can apply for other areas, such as Ha Noi, Hoi An-Da Nang, as a reference.
We collect the list of products that were sold in the Ho Chi Minh City area by the wholesale channel, as the table below. 10 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.