VIETNAM GENERAL CONFIDERATION OF LABOUR TON DUC THANG UNIVERSITY DEPARTMENT OF BUSINESS ADMINISTRATION SOLUTIONS TO IMPROVE QUALITY MANAGEMENT OF CREW EXPORT AT INLACO SAIGON Thesis s
LITERATURE REVIEW
Some definitions
According to the Vietnamese labor law, "Labor export is the process of sending laborers to work abroad legally in identified period It is managed and assisted by state through service organizations, business organizations, enterprises winning the bid, enterprises getting contract, organizations and individuals investing abroad, occupation skills developing contract, or individual contracts between workers and labor users." Laborers working abroad are called abroad workers Country they leave is called abroad country Labor coming to one foreign country is called immigrant labor Country they coming to is called immigrant country
Labor export is a special type of service which is shown by exporting “human physical strength” It is a special commodity because the owner is human being and human being is free to use and dispose purchase on the domestic and overseas market Labor export organizations are subject which is not only managed by the state but also adjusted by foreign laws On the other hand, they are subject manage labor export activity Their duty is to bring workers to work overseas, and then manage workers Therefore, labor export activity is related to human being, enterprises, and affected by many factors subjective, objective complexly In brief, labor export is socio-economic activity which is complex and sensitive
When mentioning labor export, we need to understand that “human physical strength” is exported Workers sell it to their foreign owners According to the contracts the workers sign, they have to live and work overseas There are abroad complicated factors in relationship between selling partner and buying partner which are shown in the following three features:
Economy: Human physical strength said here is valuable and used valuable labor It must be seen as commodity Party having labor needs to be paid with the reasonable price consistent with market’s price and not contrary to law The purchaser of labor must calculate how to utilize it effectively
Society: Human physical here is wide comprehension It includes physical force, mental power, and willpower It is also the human’s capital and reflects the educational level, quality and dynamic of the country's human resources
Labor relations having abroad factor: When worker live and work abroad, they will be managed by not only abroad country’s law but also immigrant country’s law In addition, they will be affected by the economic relations, culture, society, and customs in immigrant country Furthermore, international treaties that abroad country and immigrant country participate in will adjust them
Currently labor export is performed in many forms:
Based on contract bringing labor to abroad country: labor export is performed by an agreement between the Governments; a contract between labor export enterprises; bid contract; foreign investing contract; occupation developing contract; or single contract between worker and owner of labor
Based on spatial movement of workers: direct labor export means that moving labor is organized from one country to another with changing place to stay in identified period This is popular international exchange of labor now Limitrophe labor export means employees in the countries have same borderline work back and forth between countries There is no temporary or permanent movement of place to stay Stay-in labor export means workers have job on their country in export processing zones, foreign invested industrial parks ; non-formal labor export is that workers find jobs abroad illegally, this way is accounted for small percentage, the workers’ risks is very high
Based on the quality of exported labor: skilled labor export is also known as exporting specialists, technicians, and skilled labor Low-skilled labor or unskilled labor export is also known as general type The two types of labor export’s movement are so diverse Skilled workers move in parallel investment flows from developed countries to less developed countries On the contrary general workers move from less developed countries to more developed ones Currently, Vietnam's labor export was carried by the following forms:
Through service businesses, business organizations are permitted to bring workers to abroad countries
Through businesses winning the contract; business are received contract; or organizations or individuals to invest abroad are allowed to send laborers to work abroad
Through trainee forms, internship forms to improve their professional skills abroad
According to Labor individual contracts directly signed with the foreign use of labor
Quality is equivalent to consumer satisfaction and the price of a product or service is an important part of its quality (Doan Gia Au Du, Quality Management)
Quality management is a process in which applies to how organization ensure they can offer quality products and services to meet requirement, at lost cost, first time every time (Doan Gia Au Du, Quality Management).
Theoretical review
Joseph Juran is responsible for what has become known as the “Quality Trilogy” The quality trilogy is made up of quality planning, quality improvement, and quality control If a quality improvement project is to be successful, then all quality improvement actions must be carefully planned out and controlled Juran believed there were ten steps to quality improvement These are:
An awareness of the opportunities and needs for improvement must be created
Improvement goals must be determined
Organization is required for reaching the goals
Training needs to be provided
Dr W Edwards Deming's innovative quality management theories have greatly advanced the quality management process Deming believed that inspecting and correcting defects after production was ineffective He believed that, since it could cost as much to correct a defective product as it had originally cost to produce it, the
12 quality issue was critical to address before production, rather than afterward Deming asserted that quality control issues arise from poor management According to Deming theory, management's job is neither to assess employee output numerically (encouraging speed at the expense of quality) nor to inspect product quality after production, but rather to create a production process and company culture that encourage exceptional workmanship Some ways Deming proposed to do this (from his 14 points of management) are these:
Share company goals with employees
Drive out fear, create trust and raise employee morale
Focus on quality rather than quotas
Implement on-the-job training
Work continually to improve quality and productivity
Adapt to changing economic and industry needs
Creator of the last theory, Dr Kaoru Ishikawa is often known for his namesake diagram, but he also developed a theory of how companies should handle their quality improvement projects Ishikawa takes a look at quality from a human standpoint He points out that there are seven basic tools for quality improvement These tools are:
Pareto Analysis: helping to identify the big problems in a process
Also called: Pareto diagram, Pareto analysis
Variations: weighted Pareto chart, comparative Pareto charts
A Pareto chart is a bar graph The lengths of the bars represent frequency or cost (time or money), and are arranged with longest bars on the left and the shortest to the right
In this way the chart visually depicts which situations are more significant
When to Use a Pareto Chart
When analyzing data about the frequency of problems or causes in a process
When there are many problems or causes and you want to focus on the most significant
When analyzing broad causes by looking at their specific components
When communicating with others about your data
Decide what categories you will use to group items
Decide what measurement is appropriate Common measurements are frequency, quantity, cost and time
Decide what period of time the Pareto chart will cover: One work cycle? One full day?
Collect the data, recording the category each time (Or assemble data that already exist.)
Subtotal the measurements for each category
Determine the appropriate scale for the measurements you have collected The maximum value will be the largest subtotal from step 5 (If you will do optional steps
8 and 9 below, the maximum value will be the sum of all subtotals from step 5.) Mark the scale on the left side of the chart
Construct and label bars for each category Place the tallest at the far left, then the next tallest to its right and so on If there are many categories with small measurements, they can be grouped as “other.”
Steps 8 and 9 are optional but are useful for analysis and communication
Calculate the percentage for each category: the subtotal for that category divided by the total for all categories Draw a right vertical axis and label it with percentages Be sure the two scales match: For example, the left measurement that corresponds to one- half should be exactly opposite 50% on the right scale
Calculate and draw cumulative sums: Add the subtotals for the first and second categories, and place a dot above the second bar indicating that sum To that sum add the subtotal for the third category, and place a dot above the third bar for that new sum Continue the process for all the bars Connect the dots, starting at the top of the first bar The last dot should reach 100 percent on the right scale
Example shows how many customer complaints were received in each of five categories
Cause and effect diagrams: helping to get to the root cause of problems
Also Called: Cause–and–Effect Diagram, Ishikawa Diagram
Variations: cause enumeration diagram, process fishbone, time–delay fishbone, CEDAC (cause–and–effect diagram with the addition of cards), desired–result fishbone, reverse fishbone diagram
The fishbone diagram identifies many possible causes for an effect or problem It can be used to structure a brainstorming session It immediately sorts ideas into useful categories
When to Use a Fishbone Diagram
When identifying possible causes for a problem
Especially when a team’s thinking tends to fall into ruts
The steps for constructing and analyzing a cause and effect diagram are outlined as follows:
Step 1: Identify and clearly define the outcome (or effect) to be analyzed, and draw a horizontal arrow pointing to the right, and create the effect box (in which indicates a brief description of the outcome)
+Notify the effect to be examined Effects, which should be stated as particular quality characteristics, result from work, planning objectives, and the like
+An effect may be positive (an objective), or negative (a problem), depending upon the issue that’s being discussed
Step 2: Identify the main causes contributing to the effect being studied (the primary cause) Some commonly used categories of main caused:
3Ms and P: methods, materials, machinery, people
4Ps: policies, procedures, people, plant
Environment: a potentially significant fifth category
Step 3: For each major cause, identify other specific factors which may be the causes of the effect, and attach them as sub-branches (minor causes) of the major branches
Step 4: Identify increasingly more detail levels of causes and continue organizing them under related causes or categories We can do this by asking the team members a series of questions, especially questioning the people who involve directly to the quality process
Step 5: Adjust the minor factors/ sub-branches and organize the cause and effect diagram
Step 6: Analyze the diagram to identify major causes that warrant further investigations We need to look for causes that appear repeatedly These may represent root causes Supervisor looks for what we can measure in each cause to quantify the effects of nay changes the firm focuses Most importantly, they identify and circle the causes that the firm can take action on
Various tools can be utilized to conduct a cause and effect analysis Some of the methods are listed below
Brainstorming: A group of people can brainstorm over the problem and come up with a comprehensive list which can then be further evaluated to determine if they are actual causes of the problem If they are, they can be suitably represented on the cause and effect diagram
Affinity diagram: This can be used to group similar caused together under a common head once the brainstorming session is completed It is normally used in conjunction with brainstorming
5 Why analysis: Sometimes, the causes which have been determined by brainstorming through discussion may be a superficial indicator of an actual underlying problem By digging further, one will be able to identify the root cause Hence people follow a
16 technique known as 5-Why Analysis were one will ask the question “Why” consecutively 5 times in order to determine the root cause of the problem
This fishbone diagram was drawn by a manufacturing team to try to understand the reasons why technology is not accepted on roll out The team used the four generic headings to prompt ideas Layers of branches show thorough thinking about the causes of the problem
Stratification: analyzing how the information that has been collected fits together
Stratification is a technique used in combination with other data analysis tools When data from a variety of sources or categories have been lumped together, the meaning of
17 the data can be impossible to see This technique separates the data so that patterns can be seen
When data come from several sources or conditions, such as shifts, days of the week, suppliers or population groups
When data analysis may require separating different sources or conditions
Before collecting data, consider which information about the sources of the data might have an effect on the results Set up the data collection so that you collect that information as well
OF INTERNATIONAL SHIPPING AND LABOUR
Duty and function of Inlaco Saigon
The company was established to mobilize and use efficiently capital sources for investment activities, shipping business, marine services in order to aim at maximizing profits, creating employment, steady income for the workers to ensure legal rights for shareholders, fulfill obligations to the State, keep building the brand and create foundation to develop company in a stable, long-term and steady
The company was allowed to conduct business throughout the territory of Vietnam and in foreign countries in accordance with the provisions of law Inlaco Saigon’s scope of business is:
Marine services (Ship agency, Sea transport agency, Multimodal transport agency, Ship supply; Marine brokering, Ship management)
Labor cooperation service (labor supply and export), recruiting, training, improving professional skills and foreign language of labors to send abroad to work
Container CY, trucking and warehousing
Transport and customs clearance service
Sea and land container transport
Export, import and sale, purchase of marine spare parts and equipment
Sale and purchase of vehicles and spare parts, minerals, nonferrous metals, steel, electronic equipment, consumer products, agricultural, forest and aquatic products, handicrafts, garments
Distributing agent in marine diesel engines and spare parts of foreign manufacturers
The company has 03 branches in major cities of the country such as Hanoi, Hai Phong, Thanh Hoa Inlaco Saigon also has one limited liability company named Inlaco Logistics in Nghe An
Organizational system of Inlaco Saigon
Figure 2.1: Organizational system of Inlaco Saigon
The company was established in 2007, so the organizational structure is compact, departments are divided with function Each department has different tasks and activities under the administration of the manager Board of Directors is responsible for operating activities of departments, such as activities between departments each other Although departments have their own tasks, the relationship has tied each other for common goal the company
Ha Noi Branch Hai Phong
Company’s Shareholders: including all shareholders with voting rights, they are the highest decision-making of the company Company’s Shareholders convened to implement their rights
Board of Directors: managing the company, responsible for the development of the company according to the tasks of the state and the shareholders Board of Directors is five members by voting of the Shareholders
Supervisory Board: depended on the Shareholders and it is elected by the Shareholders Supervisory Board is on behalf of the Shareholders to monitor and operate activities of the company
Board of Directors: managing and operating entire activities of the company directly, such as conducting the departments, the branches, Inlaco Logistics Co., Ltd
Planning and Investment Department: planning and implementing business strategies, giving advises to Board of Directors for using and rising capital efficiently
Legislative Department: advising legal, drafting documents
Accounting Department: responsible for entering in the accountant, evaluating results and operation of the companies under the plan and monitoring and drawing the balance sheet
Personnel Department: responsible for advising the General Director in management labor and implementation of policies on labor and salary
Technical Department: planning to using equipments and repair ships of the company
It draws consumption norms of raw materials to present Board of Directors
Administration Department: monitoring the organization in the company, recruiting and training employees, the statistic and analysis data, such as managing the organization of labor, salary, the market
Operation Department: it is intermediacy in almost business activities such as transported contracts, marine insurance, hiring ship, crew hire contracts, according to mandate Agency department: implementing the signing of agency contracts for each shipment or time according to agree between both parties and evaluating agency fee Crew manning Department and Tanker crew Department: receiving records of crew, recruiting and training crew, improving skills and foreign language employees
Department of Safety Management and Crew training: advising the Board of Directors in the training field, advanced training crew for supplying crew the company's ships and foreign ships and maintaining and implement effective safety systems for ships
Branches: the departments of the branches will implement activities directly which the company coordinates.
Review of Inlaco Saigon’s operation
Mining fleet: 6 ships Thanh Son, Thanh Ba, Thanh Thuy, Inlaco Bright, Aquamarine
Inlaco Accord of the Company's fixed-term leased
Thanh Son Thanh Thuy Thanh Ba
Aquamarine Inlaco Bright Inlaco Accord
Labor export: Inlaco Saigon is one of the leading companies of exporting shipcrew in
Vietnam, thanks to appropriate policies for this work over the years Until 22/03/2012, the number of shipcrews of the companie is 1066, in which has 1450 turn of shipcrews enter and leave ship Exporting partners of Inlaco Saigon are: Inlaco Japan, Nissho In addition, shipcrews also work on the company's ships and other shipping companies in country such as Vinalines, Saigonship, Inlaco HaiPhong, shipping company, PET, Nghi Son Cement
Shipping agent: With a team of highly skilled employees, the company is willing to provide the best services as owner agent, charterer agent, agent for all kinds of ships such as oil ship, container ship, bulk or general cargo ship, ship carrying liquefied gases at all the ports of Vietnam Also, with branches in Ha Noi, Hai Phong, Nghe
An and Thanh Hoa, can provide agency services quickly and efficiently in different ports of Vietnam
Currently, company is acting as agents for domestic shipowners and shipowners of Japan in Vietnam's ports These services include arrangement of procedures for vessels
32 to enter and leave port to shuttle crew, wharves and unload goods Besides, Inlaco Saigon also offers logistics services for customers in Vietnam
Inlaco Logistics was established on 11/2007 to take advantage and improve business efficiency in the use of capital and the existing infrastructure of the company Inlaco Saigon including warehouses, container and transport fleet, human resource of forwarding department in Hai Phong, Hanoi and prevention agents
The main objective of Inlaco Logistics is to maintain logistics operations using container warehouse in Hai Phong, fleet of trucks as well as associated service branches to provide logistics services to customers nationwide
The work of supplying machine and parts of Hanshin ship engine: Engine and
Hanshin devices are installed on many ships of the companies from North to South of Vietnam such as: Vosco, Vitranschart, Vitaco, Vietpetroco, Vinaship, Nosco , Seagull shipping, Damacosco, Inlaco Saigon, Vietranstimex
The management of ship and cargo brokerage: Currently the company is managing for MH Adventure vessel of Minh Hung Company and The Son vessel of Lam Kinh
Investment in building vessel: The company decided to get two double hull ships, the owner of which is Vinashin, tonnage of 34,000 DWT The company has signed the contract with Pha Rung shipyard to conduct building Inlaco Express vessel in November, 2010 and is expected to be completed in 10/2011 Another contract will be signed between Pha Rung shipyard and Inlaco Saigon in 2012
2.5 Importance of crew export at Inlaco Saigon
Inlaco Saigon is one of the earliest companies establishing crew export field The company was established on 27.02.1995, and the export crew began on 29.04.1992 So the experience of crew export is about 20 years Revenue from crew export activity accounts for nearly 80% of turnover of the company In 2011, revenue from this activity accounted for 90.78% of total turnover This number indicates that crew export has been playing an important role in Inlaco Saigon’s success
Currently, supplying crew has become one of the principal activities to bring high profits for shipping companies In strict competition in crew export, the company must quickly improve the quality of crew export to meet customer needs as well as to maintain their own existence The number of Vietnamese exported crews has been increasing in recently It can confirm the quality of Vietnam's current crew has been enhanced and guaranteed to meet the needs of foreign ship owners
Since the company was set up, Inlaco Saigon has focused on the export of crews Basing on crew export, other services such as shipping agents, cargo brokerage…are developed to make Inlaco Saigon grow in all aspects and add prestige to the partners in Vietnam and abroad
2.6 General review of Inlaco Saigon’s in 2010-2011
Table 2.1: Result of the business activities of company in 2010-2011
II Maritime service activities and other business
III Sum of financial indicators
Source: Accounting Department at Inlaco Saigon
In 2011, though the company met many difficulties, but the producing activities of business maintaining a stable manner When compared with previous years, the situation the company's business has positive signs Specifically:
Revenue: 304 billion VND , Profits: $ 9.2 billion, Budget: $ 4.2 billion
To review the business production situation, we analyzed the production activities of the company business
In 2011, the Company's fleet includes 06 ships and company combine medium-term lease and mining Thanh Ba ship, Thanh Thuy, Inlaco Bright, Thanh Son, Aquamarine and Inlaco Accord ship This leads to turnover of the fleet in 2011 was 276 billion, up 18% when compared with 2010 and reached 123% of the yearly plan The situation fleet operators in 2011 met many difficulties because rate dropped sharply, scarcity of sources leading to company didn’t have profit in business fleet In addition, fleet cost in that year is high due to:
Aquamarine ship overhaul on track at Ba Son from 25/3 to 11/4/2011
Rising oil price, leading to the repairing costs, labor also increased
The vessels visit less to Vietnam, so supplies must be purchased abroad, this also increases costs
Regarding investment in fleet development:
+ To complete the new building of Inlaco Express ship and expectedly put into usage in 01/2012
+ Signing contract of new building for vessel marked HR34-PR10 with Pha Rung Shipyard, the project will be implemented in 2012-2013
According to report on 31/12/2011, the number of crews is 1057 crews In 2011, there are 1177 turns in and left Turnover of crew export remained stable gain of $ 4.2 million
In 2012, the Company continues to provide crews for the foreign partner They are Inlaco Japan, Nissho, PSSI, NS United Marine, Excel Marine and the company's fleet
The work of building ships and Hanshin services:
Progress of building Inlaco Express tonnage of which is 34,000 DWT in Pha Rung Shipyard is as schedule In 01/2012, the company will receive Inlaco Express vessel and put into operation
In 9/2011, the company has signed a contract with Pha Rung Shipyard to build dry cargo tonnage of which is 34,000 DWT This vessel is signed PR10 Total cost is 699 billion Capital structure including 85% from Agribank and 15% from commercial loans Ship is expected to be completed in 10/2013
Hanshin work: in 2011, Division of Engineering provides materials and spare parts of ships for some companies such as Da Nang ship, Vitranschart, and others However, Hanshin service revenue in 2011 was very low The main cause is the main supply for the ship building project is not implemented due to the small shipbuilding hardly
35 occur In addition, the supply of spare parts and materials was increased for smaller ships are in difficulty situation
Activity of the Inlaco Logistics Company:
Production and sales of Inlaco Logistics in 2011 as follows:
Total revenue: 21.9 billion, up 10.07% compared to 2010
Total cost: 19.9 billion, up 20.5% compared to 2010
Profit: 2.01 billion, with 59.32% compared to 2010
The main revenue is from services of container lifting and transport, accounting for 90% of total revenue Warehousing has offered high performance until end of 2011 Production and sales dropped significantly, because roads leading from warehouse to port were frequently blocked
Production and sales of logistics in 2011 increased compared to 2010 but only 59% profit due to higher input costs, especially fuel costs, supplies, repairs, labor and other surface, result of investment to buy two vehicles used for lifting container in 12/2011 Meanwhile, prices of services did not increase significantly
The management of ship and cargo brokerage:
The company is managing two vessels: the Tu Son ship of Lam Kinh company and the
REAL SITUATION OF CREW EXPORT AT INLACO SAIGON
Real situation of crew export at Inlaco Saigon
3.2.1 Result of business operation in crew export from 2009 to 2011
Table 3.3: Result of business operation in crew export from 2009-2011
Source: From Accounting department at Inlaco Saigon
The Crew export sales from 2009 to 2011 have decreased from $ 576,004 (2009) to
$513,058 (2011) In the last 3 years, turnover has decreased by 11% ($ 62,946) In
2010 sales decreased by 8% ($ 47,549) compared to sales the previous year In 2011, sales decreased by an additional 3% ($ 15,397) In general from 2009 to 2011, although crew export sales went down, the rate of reduction has decreased The cause of this decline the last few years is primarily due to the company concentrating its’ resources to develop a fleet So the Crew Department was not focusing its resources on Crew Exports, and the leaders of the company have the perception that the advantage and prestige of Inlaco Saigon is to provide crew for domestic and foreign ship owners This is a strong effort that the company has maintained since its establishment and will continue to be more focused on in the future
In 2010 crew export costs decreased by 17% ($ 41,340) compared to 2009 Cost reduction is due to the difference in the number of workers, a decrease of 51 people In
2011 crew export costs then increased by 26% ($ 49,222) The increased cost is due to export number increased by 16 persons, the cost of training new crews, and costs for the construction crew with officers, managing officers and operating officers
In 2010, profits fell 1.7% ($ 12,545) compared to 2009, primarily because revenue in
2010 decreased by 8% compared to 2009 In 2011, profits fell another 10.7% ($ 77,822) Due to costs and revenue decreases, profitability in 2011 was greatly reduced compared with 2010
In recent years the number of exported crews has reduced because the global transportation situation is not as optimistic The crew export activity of Inlaco Saigon depends on the transport situation in the world A shipping company operating in the maritime business sector will depend entirely on the market’s development in international maritime transport It is reflected by the Baltic Dry Index (BDI) This index reflects the supply and demand of goods and should be considered as a measure of growth and production of the world economy Because the supply of seafarers for ships transporting is dependent on needs of supply and demand of goods and thus can increase or decrease, the number of crews also depends on this index
Figure 3.2: Baltic Dry Index Chart
In the table above, the BDI includes four separate indices used to evaluate the four size bulk carriers, different vessels
- Baltic Capesize Index (BCI) for ships Index Baltic Capesize Group (172,000 dwt) not more than 10 years old - 25%
- Baltic Panamax Index (BPI): Baltic index for Group Panamax ships (74,000 dwt) not more than 7 years old - 25%
- Baltic Handymax Index (BHI): Baltic index for Group Supramax ships (52,454 dwt) not more than 10 years old - 25%
- Baltic Handysize Index (BHSI): Index Baltic Handysize Group for ships (28.000 DWT) - 25%
From the graph, BDI began to collapse in late 2007 Half a year later, in December
2008, the index was in a "free fall", signaling the decline of the shipping market with the phenomenon of rising fuel prices constantly By September 2008, the world economy clearly showed this crisis, the financial economy, the world, and the U.S having large uncertainties that have led to the degradation of the world economy A series of bank failures causing operations to be delayed, and the LC made many goods become stuck in ports, and demand for imported raw materials from around the world has plummeted as companies reduced production However, since early 2009, the BDI has increased slightly By 2010, the BDI has started showing signs of recovery The shipping market in general was said to have a temporary crisis, and began to recover at a slower rate but there has been no sign of outbreaks again
So the situation to increase or decrease the supply of crews also depends on this index
We see from 2007 to 2008 a period at the start of the economic crisis, the BDI also declined, and accordingly, the number of crews required of the company declined From 2009 to 2010, the shipping market in general began to recover at a slower rate, and the BDI was relatively stable But there is no sign of outbreaks should the situation back to crew exports also not very satisfactory
Thus, despite the world economic situation in general and in particular the maritime transport sector being in trouble, Inlaco Saigon has tried to maintain its relative number of crews to maintain exports The number of crews, annual exports decreased but only up to a small ratio The proportion of crews on average annual export is about 45% compared to all crews of the company This has proved the business of the company is stable and running well From early 2011, to further expand, market companies held more than 100 crews recruited to different positions to cater for this activity
3.2.2 Some problems of crew export
After the 2009 economic crisis, the situation of the international maritime transport has declined dramatically In addition, fuel prices has accounted for over 50% of freight, so that shipping agents tend to hire crews from developing countries to lower costs This is an opportunity for increasing Inlaco Saigon’s exported crews It also creates a good condition for Inlaco Saigon to improve its’ quality management of crew export After a three-month period of probation, the result is that thesis finds three major problems of Inlaco Saigon’s crew export By now, many foreign customers know its reputation Because shipping agents are opening doors widely for crews from Inlaco Saigon, the company can take advantage of it so as to improve quality management of crew export There are three issues that the company has been facing in crew export They are: a missing number of crews, the poor quality of crews, and ineffective marketing in crew export To find out the cause of these problems, this thesis uses a cause-and-effect diagram
In order to make cause-and-effect diagram for each problem, it needs to follow six steps which is shown in Chapter 1 These are:
Step 1: Identify and clearly define the outcome (or effect) to be analyzed
Step 2: Identify the main causes contributing to the effect being studied (the primary cause)
Step 3: For each major cause, identify other specific factors which may be the causes of the effect, and attach them as sub-branches (minor causes) of the major branches
Step 4: Identify increasingly more detail levels of causes and continue organizing them under related causes or categories
Step 5: Adjust the minor factors/ sub-branches and organize the cause and effect diagram
Step 6: Analyze the diagram to identify major causes that warrant further investigations Most importantly, they identify and circle the causes that the firm can take action on
There are various tools to conduct a cause-and-effect analysis such as brainstorming, affinity diagram, 5 why analysis According to characteristics of Inlaco Saigon, the thesis uses brainstorming to do it Staff of Inlaco Saigon is gathered to brainstorm over the problem and come up with a comprehensive list Each problem is brainstormed by related employees as follows
Tran Thi Cam Ha Crew Manning Department Manager
Truong Tan Loc Crew Chemical Department Manager
Vo Le Anh Dung Crew Manning Department Deputy Manager
Bui Hoang Thien Safety Management and Training
Nguyen Dang Nhat Crew Department
Nguyen Hoang Hai Crew Department
Nguyen Anh Dao Crew Department
Nguyen Thi Thuy Crew Deparment
Le Chieu Quyen Crew Deparment
Nguyen Thi Huong Crew Deparment
Nguyen Ngoc Anh Crew Deparment
Nguyen Hoang Anh Crew Deparment
Table 3.4: Group of staff joining brainstorming
Lack of crews Poor quality of crews Ineffective marketing Tran Thi Cam Ha
Tran Thi Cam Ha Truong Tan Loc
Vo Le Anh Dung Nguyen Dang Nhat Nguyen Hoang Hai Bui Hoang Thien Nguyen Hoang Anh
Tran Thi Cam Ha Truong Tan Loc
Vo Le Anh Dung Nguyen Anh Dao Nguyen Thi Thuy
Le Chieu Quyen Nguyen Thi Huong Nguyen Ngoc Anh
Figure 3.3: Cause-and-effect diagram of lack of crews
There are 914 crews with different titles in Inlaco Saigon They are Captain (31), C / O
(41), 2 / O (49), 3 / O (47), C / E (33), 1 / E (48), 2 / E (54), 3 / E (40), BSN (41 people), AB (150), OS (123), No.1 (38), OLR (108), WPR (40), Elect (4), C / C (47),
M / M (20) Customers’ need for crews is increasingly So with the number of crews Inlaco Saigon having, it must consider by which ways to have enough crews By using cause-and-effect diagram, thesis finds some causes for lacking crews
The Vietnamese Marine education system has 2 majors so as to crews They are is controlling vessel and operating vessel machine Most people have misconception of working on board Even though only some people know crew occupation People think that working on board is a dangerous occupation related to catch fish When referring to working on board, people often think of piracy, natural disasters, sinking Currently, the number of accidents in maritime transportation is increasing, especially Somalia
50 piracy So parents do not let children choose these majors The number of people applying for these majors is limited This leads to decrease the number of future crews
Based on figures published by schools, crew training centers, the annual average number of crews is from 1,300 crews to 1,500 crews are trained in different levels: university, college, under college Nowadays, because of the impact of factors: the establishment of the private maritime enterprises; establishment of domestic and foreign shipping, Vietnamese developing marine industry, crews have many opportunities to work ashore So the number of crews for crew export industry is less than before In addition, the growth of Vietnamese economy after joining WTO raises the living standards of Vietnamese gradually So working on board is not still high- income occupation and attractive as before Nowadays, many marine fresh graduates have tended to do on land This leads to lack of crews to export The domestic shipping companies in general and Inlaco Saigon in particular are facing that problem
How to change people's opinion about working on board and attract crew to work abroad is great challenge to the company Inlaco Saigon had better use media to publicize crew occupation such as some programs about introduce jobs to everyone on HTV channel By the way, the company also supplies information about crew export business to everyone Exported crews mean that crews are hired by foreign shipping agents Crews will work on dry cargo, bulk cargo, general cargo, or chemical tanker (To know more clearly about job on board, organization system of vessel is attached as Appendix) Most of these vessels are equipped with modern equipments to ensure safety of crew and reduce their labor So working on board is not really as hard and dangerous as people think
The cause of this problem is the recruitment at the company now is not effective Recruitment time of the company is associated with the time of beginning each Vsup course A Vsup course lasts 4 months so there are 3 Vsup courses each year So recruitment time in the company will be in January, May, and September The recruitment is aimed at recruiting students who have just graduated from the marine schools The company does not publicize this recruitment, only those in the new company know about it Therefore, a few students get the information through the introduction of friends working at the company Such as a fourth year student of the University of Transport, during the internship he is introduced about Inlaco Saigon The effectiveness of recruitment is shown in the number of records submitted to the company With the current recruitment practices, how the company can recruit the sufficient number of crew Today, most shipping companies is using the web page as an effective tool to inform recruitment needs When we are on the web page of the
51 shipping companies as Vosco, we easily find the need to recruit crews In the era of computerization, if only based on the company’s reputation is built in 20 years; Inlaco Saigon would not be competitive with other shipping companies The company should consider the use of web page in recruitment By this way, many people will know and update frequently the recruitment needs of the company The number of people knowing its recruitment must be considered an important requirement in the job of crew department
The following table is about income of seafarers working on chemical tanker It has been applying since November, 11th, 2011
Table 3.5: Incomes for each rank
Source: Crew Departent at Inlaco Saigon
Crews leave the job because of inadequate income with work on board There are two causes of income unreasonable
First, crew department have not still negotiated with shipping agents to improve wages for seafarers
Working on board is no longer a high-income occupation and charismatic as before
So many experienced crews having the title in the management officers have left vessels and find a suitable job on the ground The foreign shipping agents tend to hire Vietnamese crews in order to save costs, so that wages of them is very low compared with foreign crews Facing international shipping has not recovered yet and the increasingly fierce competition on the international labor market so price of hiring Vietnamese seafarers is declining According to crew department, nearly 50% of crews having officer titles have terminated contract with the company Among these officers, there are nearly 50% of crews with top-level management positions on board In the future, crew department need to be active so as to seek solutions to improve the income of crews The income has to guarantee good life on board and family life of crews Prior to this difficulty, crew department must keep negotiating with partners to improve wages for crews of the company
Second, income tax rates applied to crews is very high