VIETNAM NATIONAL UNIVERSITY HO CHI MINH CITY HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY PHUNG DUY UYEN A QUANTITATIVE MODEL FOR THE VISIBILITY OF SUPPLY CHAIN PERFORMANCE IN THE APPAREL INDUSTRY: A CASE STUDY OF PRACTICAL APPLICATION Major: Industrial Engineering Major code: 8520117 MASTER’S THESIS HO CHI MINH CITY, January 2024 THIS THESIS IS COMPLETED AT HO CHI MINH CITY UNIVERSITY OF TECHNOLOGY – VNU-HCM Instructors: Assoc. Do Ngoc Hien PhD. Nguyen Duc Duy Examiner 1: PhD. Duong Quoc Buu Examiner 2: PhD.
Tran Quynh Le This master’s thesis is defended at HCM City University of Technology, VNU- HCM City on Jan 27th 2024. Master’s Thesis Committee: 1. Do Thanh Luu 2. Le Song Thanh Quynh 3.
Duong Quoc Buu 4. Tran Quynh Le 5. Nguyen Vang Phuc Nguyen Approval of the Chair of Master’s Thesis Committee and Dean of Faculty of Mechanical Engineering after the thesis being corrected (If any). CHAIR OF THESIS COMMITTEE DEAN OF FACULTY OF MECHANICAL ENGINEERING Ministry of Education and Training Socialist Republic of Vietnam HO CHI MINH CITY UNIVERSITY OF Independence – Liberty - Happiness TECHNOLOGY – VNU HCM Task sheet of Master’s Thesis Full name: Phùng Duy Uyên Student code: 2173622 Date of birth: March 9th 1998 Place of birth: TP.HCM Major: Industrial Engineering Major code: 8520117 I.
THESIS NAME: A quantitative model for the visibility of supply chain performance in the apparel industry: A case study of practical application. Một mô hình định lượng về tầm nhìn của chuỗi cung ứng trong ngành may mặc: Một nghiên cứu điển hình về ứng dụng thực tế. TASKS AND CONTENT: − Understand the research object, analyze the problem, and orient the thesis topic. − Learn about related research and build solution models.
− Use actual company data to evaluate the effectiveness of the solution and suggest future research directions. TASK DELIVERY DATE: September 4th 2023 III. TASK COMPLETION DATE: December 24th 2023 IV. Do Ngoc Hien PhD.
Nguyen Duc Duy HCMC, day … month… year 2024 i INSTRUCTOR HEAD OF DEPARTMENT (Full name and signature) (Full name and signature) DEAN OF FACULTY OF MECHANICAL ENGINEERING (Full name and signature) ii Acknowledgements This thesis is a result of my second journey at HCMUT. With the "continuous improvement" mindset that I have acquired from university until now, I will not stop learning; instead, I am going to keep discovering in many different ways. Of course, I could not have gone through today's journey without the help from my teachers and friends during the past time. First of all, I would like to thank the teachers in the Department of Industrial Engineering for creating a favorable environment and equipping me with the necessary knowledge to complete this thesis.
With respect and gratitude, I would like to express special thanks to Associate Professor. Do Ngoc Hien. Apart from being my teacher, he demonstrated to me his commitment to education in general. Since learning occurs when mistakes are made and corrected, he gave his students permission to make errors.
Without the invaluable support and encouragement from my teacher, I could not have finished this thesis. I would also like to express my deep gratitude to my family and friends who have encouraged and supported me a lot throughout the process of studying, working, and completing my thesis. Due to the complexity of the research topic, as well as limited abilities and knowledge, the thesis cannot avoid certain errors. I look forward to receiving comments from teachers and other researchers to improve the thesis research content.
Thank you sincerely! iii Tóm tắt Luận Văn Đại dịch đã làm gia tăng và trầm trọng thêm các vấn đề hiện có trong chuỗi cung ứng. Số lượng đơn hàng tại Việt Nam giảm mạnh. Với trách nhiệm quản lý chất lượng sản phẩm và dịch vụ từ đầu đến cuối của toàn chuỗi cung ứng, công ty tư vấn quản lý chuỗi cung ứng cần chứng minh khả năng quản lý chuỗi cung ứng với các mối quan hệ đối tác kinh doanh phức tạp. Do đó, tầm nhìn trong chuỗi cung ứng đã trở thành vấn đề then chốt trong nghiên cứu SCM vì nó ảnh hưởng đến hiệu suất của toàn bộ chuỗi cung ứng.
Bên cạnh đó, công ty hiện tại chỉ đo lường hiệu quả hoạt động bằng các KPI riêng biệt nên cần có một thước đo chung để đánh giá tổng thể các nhà cung cấp. Qua đó, công ty có thể xác định nhà cung cấp nào hoạt động kém và thực hiện các chính sách phù hợp để hỗ trợ họ. Do đó, luận án này đã áp dụng mô hình định lượng SCV sử dụng năng lực xử lý để xác định chỉ số tầm nhìn tổng thể. Phép đo này cho phép đánh giá toàn bộ chuỗi cung ứng và các thành phần của nó trên cùng một thang đo, cũng như với các quy trình kinh doanh tương tự của đối thủ cạnh tranh.
Kết hợp với điểm kiểm tra nhà máy, nghiên cứu đã đề xuất Ma trận hiệu suất. Với ma trận này, ban quản lý có thể đánh giá các nhà cung cấp, xác định các điểm yếu trong SC, thực hiện hành động khắc phục và cải tiến liên tục. Hơn nữa, công ty tư vấn quản lý chuỗi cung ứng có thể cải thiện hiệu quả hoạt động của mình, duy trì mối quan hệ với các đối tác kinh doanh và thể hiện năng lực của mình không chỉ trong việc quản lý chuỗi cung ứng mà còn củng cố nó. Nhờ đó, công ty khẳng định được chỗ đứng của mình trong ngành và thu hút nhiều người mua, nhà cung cấp tham gia hệ sinh thái của họ.
Keywords: Supply chain visibility, end to end supply chain, apparel industry, focal company iv Abstract The pandemic has accelerated and magnified existing problems in the supply chain. The number of orders at Vietnam decreased sharply. With the responsibilities of managing the whole supply chain's end-to-end service and product quality, the focal company needs to prove its ability to manage the supply chain with complicated business partner relationships. Visibility has therefore become a key issue in SCM research because it affects the performance of the whole supply chain.
Besides, the company only measures the performance by separate KPIs, so there is a need for a common metric to generally evaluate suppliers. The company is then able to define which suppliers are underperforming and implement appropriate policies to support them. Therefore, this thesis applied the SCV quantification model using process capability to identify an overall visibility index. This measurement allows the entire SC and its components to be evaluated on the same scale, as well as with competitors’ similar business processes.
Combining with the audit score, the study proposed a Performance Matrix. Consequently, management may assess the suppliers, identify the weak areas in the SC, take corrective action and improve continuously. Thus, the focal company improves their performance, maintain relationships with business partners and shows their capability in not only managing the supply chain but strengthen it. As a result, the company affirms their stand within the industry and attracts more buyers, suppliers to join their ecosystem.
Keywords: Supply chain visibility, end to end supply chain, apparel industry, focal company v The commitment of the thesis’ author I hereby declare that this thesis is my personal research in the past and has not been copied from others, carried out under the scientific guidance of Associate Professor. Do Ngoc Hien and PhD. Nguyen Duc Duy. All data used and analyzed in the thesis and research results were researched and analyzed by myself objectively, honestly, with clear origins and have not been published in any form.
I take full responsibility for any inaccuracies in the information used in this research. AUTHOR (Full name and signature) vi Table of Contents List of Figures. ix List of Tables. x List of Abbreviations.
Introduction to Subject. Aims of the thesis. Limitation of the study. Outline of the report.
Definition of Supply Chain Visibility. Quantification of Supply Chain Visibility. Measuring Business Performance and Supply Chain Visibility. Methodology: Quantification Model of Supply Chain Visibility Using Process Capability.
Process Capability-Based Quantitative Model of SCV. Quantification Model for the Overall Supply Chain Visibility. Business of process links. Assessment of Overall Supply Chain Visibility in a Focal company.
Introduction to the research object. Performance Matrix Formation. Visibility index result. Conclusions and suggestions.
49 viii List of Figures Figure 1. Vietnam’s textile and garment export turnover (Synthetic BSC 2021). Export growth of textile and garment industry and GDP growth of Vietnam (Vietstock Finance 2021).Supply chain network structure for visibility assessment. End-to-end SCM.
Supply chain solutions. The Maritime Incoterms. Free on board Incoterm. Performance Matrix Example.
v_OTD histogram with 3 days buffer. HUYEJO information dashboard. Fabric in bale form. Bale form relaxing machine.
Fishbone diagram for Defect 1. Relaxation fabrics are stored in the racks with clear document record. Pareto chart for ALT of HUYEJO. 41 ix List of Tables Table 2.
Definitions of SCV. Sigma level to visibility index. Technical facility assessment requirements. Overall handling methods.
Calculation of v_ALT of BRAHAN factory. Overall visibility index of TDTINV factory. Average lead time of HUYEJO. 40 x List of Abbreviations Abbreviation Meaning ALT Average Lead Time DIF Delivery in full FIR First inspection result OTD On-time Delivery RTY Rolled Throughput Yield SC Supply Chain SCV Supply Chain Visibility xi 1 Chapter 1.
Introduction to Subject The ongoing pandemic poses substantial challenges for supply chains on a global scale. Lockdowns, shelter-in-place orders, and travel restrictions have all been a major disturbance, impacting every aspect of the economy. Demand for certain categories has decreased, while others have seen an increase. As a result, companies are contemplating significant strategic adjustments to the structure and operation of their supply networks in order to maintain the flow of their business.
In 2020, Vietnam's textile and garment industry encountered numerous obstacles as a result of the severe impact of the COVID-19 epidemic. The implementation of social distancing in Vietnam led to a sharp decline in orders. By the conclusion of 2020, the entirety of the Vietnamese textile and garment industry managed to attain an export turnover of 35.29 billion USD, which represented a 10.91% decrease in comparison to 2019 (Figure 1. Vietnam’s textile and garment export turnover (Synthetic BSC 2021).
2 According to statistical data, the textile and garment industry witnessed a growth rate of 16.5% in export in 2018. However, due to the outbreak of COVID-19 by the end of 2019, this growth rate declined to 8%. In 2020, the prolonged pandemic situation led to a significant drop in the growth rate of the industry (as shown in Figure 1. The export turnover of textiles and garments reached 26.73 billion USD in the first 11 months of 2020, experiencing a decline of 10.
As a result, Vietnam's GDP reduced from 7. Export growth of textile and garment industry and GDP growth of Vietnam (Vietstock Finance 2021). In 2022, national lockdowns are still prevalent, which can hamper the manufacturing sector by impeding the flow of both finished goods and raw materials. At the same time, the pandemic did not necessarily cause new challenges for supply chains, but it did expose unanticipated vulnerabilities such as staff shortages and losses due to closures.
Hence, it has intensified and accelerated current issues in the supply chain. After the Covid pandemic, the number of orders at Vietnam decreased sharply. In order to earn more orders, a supply chain management company must prove itself through continuous improvement in its service.