1 A NEW APPROACH FOR QUALITY MANAGEMENT FOR SEAPORTS INTEGRATED IN SUPPLY CHAINS by Tran Thanh Hai B.Sc Submitted in fulfilment of the requirements for the degree of Doctor of Philosophy Australian Maritime College June 2013. ii DECLARATION OF ORIGINALITY That the thesis contains no material which has been accepted for a degree or diploma by the University or any other institution, except by way of background information and duly acknowledged in the thesis, and to the best of my knowledge and belief no material previously published or written by another person except where due reference is made in the text of the thesis nor does the thesis contain any material that infringes copyright. Signed 27 June 2013 iii STATEMENT OF AUTHORITY OF ACCESS This thesis may be made available for loan and limited copying in accordance with the Copyright Act 1968. Signed 27 June 2013 iv STATEMENT OF ETHICAL CONDUCT The research associated with this thesis abides by the international and Australian codes on human and animal experimentation, the guidelines by the Australian Government’s Office of the Gene Technology Regulator and the rulings of the Safety, Ethics and Institutional Biosafety Committees of the University Signed 27 June 2013 v ABSTRACT Quality management has proven to be one of the most effective methods for organisations to be successfully sustainable in a hyper-competitive environment.
However, this management method has not been fully utilised by seaports, especially in the context of global supply chains. This thesis argues that the increasing integration of seaports into supply chains requires a new approach to quality management to enable seaports enhance their own performance and the efficiency of the whole supply chain, in which they are involved. Thus, the objective of this thesis is to investigate what quality management practices are appropriate for seaports as they become further integrated in supply chains? Employing deductive and inductive reasoning and a two stage methodology, this thesis proposes a literature-based quality management framework for seaports, beyond the quality management standards proposed by the International Organisational for Standardisation (ISO), to incorporate both internal and external approaches. An empirical study is used to test the quality management framework in the context of Vietnam, which is a prime example of seaports that are integrating into their supply chains as a result of implementating significant governmental policies on trade, transportation and supply chain.
The first stage of the empirical study was conducted via a preliminary mail survey with 100 seaports to test the initial quality management framework. A 38 per cent response rate was achieved. This stage suggested that the current quality management approach tended to be internally focused and insufficient for seaports that are broadening their business to incorporate supply chain thinking. Therefore, based on the outcomes of the preliminary survey and further examination of the vi supply chain literature, a quality management framework consisting of eight external and four internal practices was developed for further testing.
A telephone interview survey with senior managers of 43 major Vietnamese seaports was conducted during the second stage. A 79 per cent response rate was achieved. The findings confirmed that although the internally focused ISO quality management approach has benefits, it is insufficient when considering the contemporary supply chain focus of seaports. Customer focus and leadership were perceived as the most important practices among the internal practices.
The findings also indicated that the external practices were perceived increasingly important as seaports become more embedded in various supply chains. Among the external practices, quality integration and network optimisation were considered essential to increase the quality of collaboration and inter-relationships to minimise the complexity of supply chains. To manage supply chain flows and to share the mutual benefits and risks between seaports and other stakeholders, it is suggested that one linked intra-network will need to become the backbone of supply chains. The empirical study also found that as seaports attempt to increase their sphere of influence in enhancing quality management throughout the supply chains, the business reality of implementing requires significant communication and collaboration among their stakeholders.
This requires a stage approach to implementing quality management by the seaports: firstly collaborating with stakeholders who have the most direct relationship with seaports followed by the indirect stakeholders and so on along the supply chains. The thesis has several contributions; firstly, it readdresses the importance of quality management and provides a broader approach which includes external dimensions vii appropriate for contemporary businesses with a supply chain focus. Secondly, the empirical study conducted in Vietnam may draw attention of seaport management to implementing quality management as an economical and powerful means for long term sustainability. This may assist seaport management in preparing effective, competitive Vietnamese seaports for the future.
Thirdly, for seaports in developing countries dominated by central governments, quality management is more than just attaining certification and should be embedded in an organisational culture and along a supply chain. The empirically tested quality management framework, although validated in Vietnam, also provides underlying principles that may be appropriate in other countries. Fourthly, a two stage methodology was found useful for explorative research. The outcomes of the first stage were able to provide initial feedback from respondents to enhance the quality of the second stage by sharpening the focus, and enabling further probing result in much greater insights.
Finally, this thesis found telephone interviews to be an ideal means of collecting data from senior management due to their flexibility, cost effectiveness and convenience for respondents. viii ACKNOWLEDGEMENTS I would like to acknowledge the people who have given me a great help and encouragement throughout this special journey. The thesis would not have been possible without the constant, endless and faithfull support of you all. First and foremost, I own my deepest gratitude to my main supervisor, Dr.
Stephen Cahoon for his knowledge, enthusiasm and patience in guiding me to achieve my dream. His valuable experiences and guidance deepened my insights in this study. It has been wonderful for me to be his student. My heartfelt appreciation goes to my second supervisor Dr.
Peggy Chen who has supported me in many different ways like a real friend. Her encouragement and direction have always kept me on track, especially in difficult times. I would like to express my sincere gratitude to my initial supervisor, Adjunct Professor Devinder Grewal and my spiritual friends ‘parachute’, Assistant Professor Vinh Thai, Dr. Owen Nguyen for your trust, inspiration and unconditional support.
I am also grateful to Dr. Ben Brooks, Dr. Eon Seong Lee, Dr. Elizabeth Vagg for your kind support regardless of your busy schedules.
My special thanks is to the staff of Department of Maritime and Logistics Management for their kind sharing expertise and grateful assistance, to my colleagues Indika Sigera, Imanuel Dindin, Quazi Sakalayen and Mahinda for the lovely sharing research environment we had. Finally, I am indebted to my Mum and Dad for their endless love, scarification and constant belief in me. I dedicate this thesis to my parent, my beloved daughter and son, who are a great great source of nutrition and challenge to me. ix LIST OF ACRONYMS DWT Deadweight tonnage EDI Electronic data interchange EFQM European Federal Quality Management Awards EM Excellence Models GDP Gross domestic product ISM International Safety Management Code ISO International Standard Organisation ISPS International Ship and Port Facility Security Code IT Information technology JIT Just-in-time KPI Key performance indicators MOT Ministry of Transport of Vietnam PRQ Primary research question QA Quality assurance QC Quality control QI Quality inspection SD Standard deviation TEU Twenty foot equivalent unit TQM Total quality management UNCTAD United Nations Conference on Trade and Development VINALINES Vietnam National Shipping Lines VINAMARINE Vietnam Maritime Bureau VPA Vietnam Port Association WTO World Trade Organization x TABLE OF CONTENTS DECLARATION OF ORIGINALITY.
ii STATEMENT OF AUTHORITY OF ACCESS. iii STATEMENT OF ETHICAL CONDUCT. viii LIST OF ACRONYMS. ix TABLE OF CONTENTS.
x LIST OF FIGURES. xv LIST OF TABLES. xvi CHAPTER ONE. QUALITY MANAGEMENT AND SEAPORT EVOLUTION .2 Quality management evolution .4 Total quality management .5 Lean six-sigma quality .3 Quality management practices .6 Education and training .10 Communication and information .4 Quality management in service and manufacturing .5 Fifth generation - seaports in supply chains.
54 SEAPORTS IN SUPPLY CHAINS AND QUALITY MANAGEMENT .1 Supply chain relationships .2 Seaports in supply chains .3 Supply chain quality management .1 Quality management in maritime logistics .2 Quality management in supply chains .4 Proposed quality management practices .6 Education and training .11 Integrated quality management .3 Empirical study - Vietnamese seaports .1 First stage - preliminary study .2 Second stage - main study .4 Conducting a telephone interview .3 Data coding and editing. 128 CURRENT QUALITY MANAGEMENT IN SEAPORTS .2 Method of data analysis .1 Seaport location and major activities .2 Respondent demographic information .1 Respondent position and working experiences .2 Professional education background .3 Summary of demographic information .4 Current quality management in seaports. 159 QUALITY MANAGEMENT FOR SEAPORTS IN SUPPY CHAINS .3 Perceptions on the quality management framework .3 Information and technology .5 Education and training .2 Purpose of the research .3 Summary of findings .4 Contributions of this study.5 Limitations of the research .6 Potential areas for future research .213 LIST OF REFERENCES. VIETNAMESE SEAPORTS – MOT LIST.
PRETESTING LETTER - STAGE ONE. ADVANCE LETTER - STAGE ONE. THU MOI - GIAI DOAN 1. QUESTIONNAIRE - PRELIMINARY STUDY.
CAU HOI - GIAI DOAN 1. VIETNAMESE SEAPORTS – VPA LIST. PRETESTING LETTER - STAGE TWO. ADVANCED LETTER - STAGE TWO.
THU MOI THAM GIA - GIAI DOAN 2. QUESTIONNAIRE – MAIN STUDY. CAU HOI - GIAI DOAN 2. THE DEVELOPMENT PLAN FOR VIETNAM SEAPORT.
311 xv LIST OF FIGURES Figure 1. Seaport and quality management evolution. Quality management evolution. The development of quality management practices.
International seaborne trade. Quality management in Nantes seaport. Seaport expanded activities. A basic supply chain.
Seaport integration in supply chains. The approach of quality management for seaports in supply chains. Quality management for seaports in the supply chain. Deductive and inductive reasoning.
Research reasoning approach. Research process design. Data collection process. Vietnamese seaport ownership.
Designations of the respondents. Working experiences of the respondents. Education background of the respondents. Current quality management in seaports .1 Seaport and quality management evolution.
203 xvi LIST OF TABLES Table 2.1 Summary of quality management practices in different phases. Quality seaport based on European Quality Award. Quality management practices in maritime logistics. Quality management practices in supply chains.
The preliminary study questionnaire structure. The preliminary study result. The main study questionnaire structure .1 Current quality management practices in seaports .1 Quality management practices for seaports in supply chains .2 The perception comparison on Customer focus practice .3 The perception comparison on Leadership practice .4 The perception comparison on Information and technology practice .5 The perception comparison on Human resource practice .6 The perception comparison on Education and training practice .7 The perception comparison on Quality integration practice .8 The perception comparison on Process management practice.9 The perception comparison on Quality performance practice .10 The perception comparison on Network optimisation practice .11 The perception comparison on Social benefits practice.12 The perception comparison on Continuous improvement practice .13 The perception comparison on Quality culture practice. 202 1 CHAPTER ONE INTRODUCTION 1.1 Research background A rapid growth in international trade positively affects all aspects of society: the quality of products and services improved, the economy enhanced and the average living standards improved (Pokrovskii 2011).
The production process of a product is no longer limited to one single country but has expanded to a global scale. This means that organisations are facing greater competitive pressures and are compelled to find a means to be sustainable either by merging, consolidating or changing their management methods.