VNU- UNIVERSITY OF ECONOMICS AND BUSINESS FACULTY OF BUSINESS AND ADMINISTRATION APPLICATION OF “MADE IN VIET NAM” LEAN MANAGEMENT PHILOSOPHY IN MANUFACTURING COMPANIES: CASE STUDY OF THANH AN MECHANICAL MANUFACTURING AND TRADING CO., LTD Student’s name : Le Thi Ly Ly Student ID : 12050290 Intake : QH2012-E Program : International standard Hanoi — May, 2016 TABLE OF CONTENT (OO .' i Pe eee CS, ee nee iii La PGI CAE Ee sẽ. RA SS NN iv OO, en V ID 706 /22,/1:2-). ` Vi PUEDEN AS TẾT cuong semen seamstress dninetnnnermml ihn hi AREA ARR NAO Vil 7. Research objectives and questions .OBJ€GES/an(SGODfssesznsrrrresrennrinsretrseeraiviudsroEntB3Sh0200.---- LH HH nu TT ưkc 2) 5.-05EL3D8G8160855 130525564858 50565858 36088 3 lối IRGSERTEHTSIEHGLIIREỂsesrorpanytrepnorogirhotortirtgomdissvgtstoyrosgwtygrtseeaisieeosrosszEuitbrPtePiosodSfRdEnifirvl 6 CHAPTER 1: LITERATURE REVIEÔW.
Gà Hàng kh 7 Lil. The Origin and Development of Lean. Concepts and prITCIDÏCS.--- << + 11v vn ng nh ngư 9 1.38 16 ã308280055G:88 9 Lslele2, - jLOOIS/AT1(/NVIGLHOlSsssesrrsrszoniosongmtryorgosnotresdtropgserisgsptvsovredsowrsÐsEVS0HEH0Nđ 1] 1. Principle of Lean Managemen(.
Introduction of “Made in Vietnam” Lean Management. Definition and model of “Made in Vietnam” Lean Management. The development of Tam The in “Made in Vietnam” Lean Management 01 ồằằ. Why “Made In VietnaIm””?.
Background of manufacturing industry. Appling lean management in manufacturing InduSfry.- --«--««««-++ 21 ii CHAPTER 2: RESEARCH CONTEXT AND METHODOLOGY.cc-ssscssssorsnensessanseensenuocsevennaasangansnswenentseabvnndisndeannesncousewaas 23 Deed, Lata: COLE CH OM s wcs sen cans tờ th E14 eres caer GH03038101 5540109 HNGh neeeerers renner MEETS 25 CHAPTER 3: RESEARCH RESULTS IN THANH AN COMPANY. Introduction of Thanh An company uu. 1afitrIDÌ€:WRS SE ¿.
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Wastes In ODDOTfUTIẨY .-- - HH HH HH HH TH Họ TH TH TH nh nh 35 CHAPTER 4: SOLUTIONS FOR THANH AN COMPANYY. Applying Made in Vietnam Lean in a company, which has never been APPliCd) DELOL srysaorrenonritseittptetDtotitrissyptyetzrszt0sgtzreeesspnttciBssägatiĐnirifbviSEYbESWSTrEtfØfoibiồulTaxgrzss 38 X01. Apply HD Kai ĐTosssnnniise 122381 86x sxsxksverrsnesuriksSS 85585 40388953/-s8461838165643658.kcensoselSZ0588 45 AA, Apply Tre visual THENYAEEHHIEaeeeesnmerennnrsrsrrittrutrttthoosfbtaseiitnditisibti0nBtotSi0888n785/0Ấ0 48 CONCLUSION 0115. 52 BE SBIE SE TL Bê snngeeouitarndiidftrks4Bd41ssnk bói dán suiÕnnsuehoirinnngrtrkrrttrtmerttlelsccseesetereeromnflf .588/208/706,m3ndtg0E 54 APPENDIX A: INTERVIEW QUESTIONAIRES.- Si, 56 iil ACKNOWLEDGEMENTS First of all, I would like to express my deep and sincere gratitude to my supervisor, Dr.
Nguyen Dang Minh, University of Economics and Business, Vietnam National University. His wide knowledge and logical way of thinking have been of great value for me. His understanding, encouraging and personal guidance have provided a good basis for the present thesis. I wish to express my warm and sincere thanks to all those who have helped me with my work in the Thanh An Company during my period I spent in there.
The supports of officers and teachers in the Department of Business Administration and University of Economics and Business are gratefully acknowledged. Finally, I would like to thank my family for their love and supporting for me when I worked with my research Hanoi, Vietnam, May 2016 Le Thi Ly Ly IV LIST OF TABLES Table 1. Share of industrial sectors in GDP, 2001-2011. Vietnam: Potential benefits and costs of international Integration.
Advantage and disadvantage of two kinds of qualitative methods. Semi-structured interview Questions. Tangible wastes table. Intangible wastes tabÏe.
- --- TH HH HH nếp 33 Table 4. Table of solutions for Thanh An companyy. -- cà key 36 LIST OF FIGURES Figure T= Research VIETHilasseoeneeoaisrrnsirtrntentnongiiiSES00550556/380285E53i9E-0P9108005029E010-TE037801009855096E 1008 5 Figure 2. Machinery is not used for a long time at Thanh An company.
The inventory in Thanh An company. Small objects always are thrown away in Thanh An company. Defective products in Thanh Ann’s factory .6, Messy factory tn Thanh Am. GGHHRRHY sas sss unsacssanensinacanevesmimnsns tũnagEg50gã816066 32 Figure 3.
The backward information table in Thanh An company. Example of Leader Standard Work. Example of Visual controls. Example of Visibility NAÌiá‹: cai cccceosooi S06 E21 g6 gánh ng c sá 01 454161066 616556866 6065 50 Figure 4.
Example of Production display boarS. Example of AndOH.- ---- + + 1191191 1T TH HH HH kh 51 VI LIST OF ABBREVIATIONS SOEs State-owned Enterprises Vietnam’s Socioeconomic Development SEDS Strategy WTO World Trade Organization FDI Foreign Direct Investment R&D Research and Development Co., Ltd Company Limited GSO General Statistics Office (Vietnam) WMS Warehouse Management System — GDP Gross Domestic Product Vii ABSTRACTS Before the international integration of nations’ economy all over the world, there was no strong competition in the markets to sell the various consumer items manufactured by different industrial undertakings and the availability of materials to manufacture these items was not scarce. Therefore, manufacturing management was not thought to be so important and its separate identity in the organization was not felt. But today, with the rise of competitive pressure, there is no doubt that it has become an important management activity to streamline production.
Despite the fact that state-owned enterprises have become decreasingly part in Vietnam’s economy. However, in a socialist — oriented market economy, these state-owned enterprises still play an important role in shaping the structure of the nation’s economy as well as contributing to the aggregate gross domestic product. Among these enterprises, especially manufacturer, various materials which used as inputs, are required to be purchased and made available to the users and to ensure uninterrupted production. However, materials management is still not taken as an important factor and it has not been paid enough attention, time and resource to be entirely researched.
Main purpose of this thesis is to illustrate the current situation as well as the problems and limitations of the manufacturing management in Thanh An Company and suggest a set of activities appropriate to enhance the efficiency of manufacturing management. Moreover, the factual information and improving suggestions could be the background supporting the development of manufacturing organizations and other researches in the future. Background statement Manufacturing industry plays the very important role in the Vietnam’s economic development. We can see Manufacturing always reaches the highest percentage in industrial sectors in GDP from 2001 to 2011.
This trend is quite stable over the years. Share of industrial sectors in GDP, 2001-2011 Unit: % 2001 2005 2006 | 2007 2008 2009 2010 | | Share of 32.55 industrial sectors in GDP (%) Of which: Mining and | 9.23 gas and water ——_] ___—_] Source: General Statistics Office (Vietnam) According to General Statistics Office of Vietnam, GDP from Manufacturing in Vietnam is 127955 VND Billion in the first quarter of 2016. GDP From Manufacturing in Vietnam averaged 195142.50 VND Billion from 1999 until 2016 [2]. In international integration, manufacturing companies in Vietnam have a lots of opportunities to grow and expand.
Besides, we have to face with many threats. It’s showed at Table 2. Vietnam: Potential benefits and costs of international integration. Therefore, finding a solution to stabilize manufacturing companies in Vietnam is very important and necessary.
Vietnam: Potential benefits and costs of international integration Benefit Cost Better allocation of resources Profit decrease, loss, and based on competitive advantages. bankruptcy due to low Adjustment of advanced competitiveness in both domestic economic structure and international markets Market expansion, cheaper inputs Employment instability, increase cost in differentiation between the rich Scale economic advantage and and the poor because some product diversification groups are not benefited by Benefits from competition integration enhancement Decrease in FDI Benefits from investment Adjustment cost for economic diversification and risk sharing restructuring in integration Receipt of FDI capital inflows process New opportunities for foreign Negative impacts on the state development aid budget due to tariff reduction Transfer of technology, Dependence on loan and aid management skills and Direct impact from changes in knowledge international market, loss of Human resource training and control over some resources and development, enhancement of industries _————= learning, Job creation, income Increase in international pressure generation and poverty reduction to implement economic policies e Application of international rules Influence from other cultures, for the national policies: decrease loss of national identity of inefficient investment, Faster destruction of environment strengthening of policy effectiveness, prevention and settlement of difficulties if necessary, and activeness in the globalization process Source: Adam McCarty, Globalization, integration and Vietnam: Perspective for 2050, Hanoi, 2002, various issues Currently, there are many methods and tools to help enterprises improve productivity, reduce costs and boost profitability, including lean management which can be considered as a perfect tool to help firms eliminate maximally wastes and meet the needs of customers better. In the world, especially in Japan, companies have applied lean management for long time and achieved great success, contributed to the development of economics. However, in Vietnam, the number of company knows lean management is very limited.
Hence, the amount of firm has been applied it even rarer and the majority of which are joint ventures with foreign countries (especially Japan). Although in the world, many studies have shown the benefits of adopting lean management and given some applying models to the enterprises, but these studies are not appropriate with the situation of Vietnam enterprises. In some countries the author has studied of lean management but it is still very low. The majority of these studies highlighted the advantages when applying lean management but not including an appropriate model for the application of this production method on firms in Vietnam.
Recognizing these problems, the student has chosen the issue: "Application of "Made in Vietnam" Lean Management Philosophy in Manufacturing Companies: Case Study of Thanh An Mechanical Manufacturing and Trading Co., Ltd" as research topic. The study focuses on applying "Made in Vietnam" Lean Management Philosophy in a small manufacturing firm, then building an appropriate model to apply lean management in manufacturing Vietnamese firms. Research objectives and questions Lean management is a useful tool to help the companies grow stronger. Currently, this method is considered as the most comprehensive in the elimination of waste, production orientation based on maximizing the customer's satisfaction.
Therefore, all research is done to apply this method into manufacturing Vietnamese enterprises. The purposes of this study is to answer the following research questions: > Research Question 1: How are Lean Management Philosophy applied in manufacturing companies? > Research Question 2: What are the wastes and problems in Thanh An Mechanical Manufacturing and Trading Co., Ltd? > Research question 3: How can Lean Management Philosophy eliminate those wastes and solve those problems in Thanh An Mechanical Manufacturing and Trading Co. Research objects and scope - Research objects: “Made in Vietnam” Lean management Philosophy; manufacturing companies. - Content Scope: Finding out wastes and applying some lean tools to eliminate wastes at Thanh An Mechanical Manufacturing and Trading Co.
- Space Scope: at Thanh An Mechanical Manufacturing and Trading Co., Ltd - Time Scope: in the first quarter of 2016 4. Research Methodology The author practiced as an internship staff in HR department in 2 months: March and April, in 2016. The author used qualitative approach with direct observation, survey, and semi-structured interview method. All information and observations were collected to find out wastes, their causes and and how to apply lean management to eliminate those wastes, improve profitability.
The steps are described in the following figure: Step 1 > Observation Survey Semi-structured interview 4 Step 2 > | Identifying wastes | L Step 3 > Apply lean management to eliminate wastes Figure 1. Research contributions This study contributes to both the theoretical and practical dimensions of applying lean management philosophy to manufacturing companies. The study is important to review and understand the interpretation of lean management philosophy in manufacturing companies. Through the issues studied in this paper, practitioners and researchers may have a background of how to apply lean management philosophy to firms.