MINISTRY OF EDUCATION AND TRAININGHO CHI MINH CITY UNIVERSITY OF TECHNOLOGY AND EDUCATION GRADUATION THESIS MAJOR: INDUSTRIAL MANAGEMENT INSTRUCTOR: NGUYEN DANH HA THAI CONTROL INPUT FAC
Reason for choosing the topic
Vietnam's leather and footwear industry holds a significant position globally, contributing approximately 10% to the worldwide export shoe market and ranking as the third-largest footwear producer after China and India In 2023, the sector faces challenges due to the global economic slowdown, resulting in reduced orders and high input costs, which may lead to decreased production and working hours However, projections for 2024 indicate a rebound, with total export turnover expected to reach between 26-27 billion USD, reflecting a 10% increase from 2023.
The United States, European Union, China, Japan, and South Korea represent 80% of total export turnover, highlighting their significance in export markets Notably, the footwear industry effectively leverages Free Trade Agreements (FTAs), particularly benefiting from the Vietnam-EU Free Trade Agreement (EVFTA) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
The effectiveness of the production process hinges on the preparatory activities undertaken prior to production, known as the production preparation process This essential phase encompasses both structural and technological preparation, while also considering organizational planning.
Production preparation is essential for formulating new product designs and production methods, ensuring a smooth start to manufacturing and ongoing product improvements This planning process encompasses material, human resources, machinery, and financial considerations, with emphasis varying based on each business's focus and operations A well-developed production plan is crucial prior to initiating production, as it significantly impacts the technical and organizational capabilities of manufacturing companies, ultimately influencing their economic performance Neglecting production preparation can lead to common issues, such as shortages.
Disruptions in raw material supply can lead to production delays, compromising product quality and resulting in excessive inventory, wasted costs, and capital misallocation Additionally, human resource challenges can hinder labor productivity, increase salary expenses, and diminish management efficiency Machinery and equipment failures further exacerbate production issues, incurring costly repairs and replacements A lack of a production preparation plan can significantly elevate production costs, reducing profits and overall business efficiency Effective business management is primarily driven by economic considerations (Halevi, 2003).
Thai Binh Investment Joint Stock Company (TBS Group), a leader in leather and footwear manufacturing, faces market challenges that necessitate cost optimization to minimize operating expenses and enhance management quality With a focus on shoe production and the Wolverine brand, TBS operates two factories capable of producing 30 million pairs annually, yet currently only achieves 11 million pairs due to ongoing expansion since the Wolverine production chain began in March 2021 The company's sample development center is crucial, serving as the origin for new shoe models and preparing production conditions for factories This center also develops templates, coordinates with partners and suppliers, and manages essential resources Successful market acceptance of shoe models hinges on various factors, including design, materials, pricing, quality, and branding, meaning that new models may take months to years to transition into large-scale production.
The sample development center plays a crucial role in establishing a standardized production model for factories as we transition to mass production of millions of shoe pairs As business managers, our goal is to ensure that the shoe production process operates efficiently and cost-effectively, enabling us to strengthen our position in the "upstream" market despite current challenges.
Effective production preparation is crucial for minimizing defects, enhancing productivity, lowering costs, and improving product quality, serving as a foundation for larger-scale applications before mass production Consequently, process planning is essential for all manufacturing plants, irrespective of their size, part complexity, or production scale This significance underlines the importance of the topic "Control Input."
Factors to Improve the Efficiency of Production Preparation for the Wolverine Worldwide Product Chain -TBS Group" to conducting research.
Research objectives
This article analyzes the current state of production preparation for the Wolverine product line at Thai Binh Investment Joint Stock Company It identifies key issues impacting preparation, such as production planning, material sourcing, machinery and equipment readiness, and workforce balance The article also proposes solutions to enhance the efficiency of production preparation processes.
Learn about the organizational structure and production process at My Phong 1 factory
- Thai Binh Investment Joint Stock Company
Understanding the key factors influencing production preparation is essential for effective planning This article explores the planning process and various methods for optimizing production readiness Additionally, it analyzes the challenges and issues faced in planning at the Model Development Center of Thai Binh Investment Joint Stock Company, highlighting the current situation and areas for improvement.
Propose solutions to help improve the efficiency of production planning for the Wolverine product chain to bring high production efficiency
Subject and scope of research
Preparation for production of Wolverine Worldwide product line - Thai Binh Investment Joint Stock Company
Location: Sample Development Center, My Phong 1 Shoe Factory - Thai Binh Investment Joint Stock Company
Time: Figures, tables and figures for research at My Phong 1 Shoe Factory are collected and updated as of 05/2024.
Research Methodology
Identify related issues: concepts, roles, etc
Data collection and processing Forming a report
Practical direct observation method at My Phong 1 Sample Development Center and Factory - Thai Binh Investment Joint Stock Company
Direct interviews were conducted with Line Managers and production employees, alongside gathering insights from the factory's production manager and the head of the production planning and operations department.
To ensure accurate and efficient data collection during interviews, it's essential to tailor the approach for each selected subject This customization helps minimize disruptions to the interviewee's work process while maintaining the integrity of the data quality.
Secondary data includes annual reports, production plans, and departmental figures from the company Additionally, it encompasses theoretical research, foundational theories, and essays on production planning available in the school library, as well as synthesized data from books, textbooks, articles, and online sources.
Summarize company information, production process, operation situation over the years
Analyze and process data from the planning department
Observe the production planning process from employees in the planning department, analyze the current status of problems, then synthesize those problems and come up with solutions.
Structure of the report's chapters
The structure of the article consists of 4 chapters:
Chapter 1: Overview of the Wolverine product chain of Thai Binh Investment Joint Stock Company
Chapter 3: The current situation of production preparation for the Wolverine product chain of Thai Binh Investment Joint Stock Company
Chapter 4: Improving the efficiency of production preparation for the Wolverine product chain of Thai Binh Investment Joint Stock Company
OVERVIEW OF WOLVERINE PRODUCT CHAIN OF THAI
Overview of Thai Binh Investment Joint Stock Company
Company Name: THAI BINH JOINT STOCK COMPANY
Address: Xuyen A Highway, An Binh Ward, Di An City, Binh Duong Province
Figure 1.1 Logo of TBS Group
Source TBS corporate website, tbsgroup.vn
Established in 1989, TBS has gone through so many stages and marked different events:
Table 1.1 The process of formation and development of Thai Binh Investment Joint
In 1989 The three founders Nguyen Duc Thuan - Cao Thanh Bich - Nguyen
Thanh Son embarked together to establish a business with the desire to get rich in Vietnam
In 1992 TBS's construction project "Factory No 1" was approved and licensed for operation
Year 1993 Successfully signed the first processing contract for 6 million pairs of shoes
Year 1995 Factory No 2 was built
In 1996 Signed contracts with many international partners who are prestigious shoe brands in the world
Year 2002 Reaching the milestone of 5 million pairs of shoes
Year 2005 Received the second-class Labor Medal Thai Binh Shoe Company officially changed its name to Thai Binh Investment Joint Stock Company
In 2007 Reaching the milestone of 10 million pairs of shoes
In 2009 Certificate of Merit for Typical Enterprises in Vietnam's Textile,
Garment & Footwear Industry awarded by the Ministry of Industry and Trade Certificate of Merit of Top 5 Typical Enterprises in Vietnam Leather and Footwear Industry in 2009
Year 2011 Established the first Handbag factory
Year 2013 Reaching the output milestone of 16 million pairs of shoes
Year 2014 Honored to receive the Emulation Flag of the Government and the Class
Year 2015 Mai House Hospitality Company, the Mai House Hotels & Resort chain is established
Year 2016 Kien Giang Industrial Production Cluster was established
Year 2017 establish the operation of Thoai Son industrial production cluster, An
In 2019, the inauguration of Mai House Saigon Hotel highlighted TBS Land's significant growth in resort and tourism real estate investment The following year, the company achieved notable recognition by winning the first prize in product quality management, obtaining certification for conformity to supply products to AMAZON, and forming a strategic partnership with Skechers Additionally, TBS Land successfully expanded its production in the Western region, which now represents approximately 26% of the industry's overall output.
In 2021, the My Phong factory was integrated into the industrial production chain, enhancing the overall system's capacity A new 5,000m² R&D center was established, and the management and administration structure was restructured to align with contemporary demands, all while developing a strategic vision for 2030.
Up to now, Thai Binh Investment Joint Stock Company has a total of 6 product development centers and 35 factories across the country with different functions distributed in the regions:
Northern Region: Song Tra Industrial Zone
Central Region: Hoi An Factory, Huu Nghi Factory
South East Region: Dong Xoai Factory, Manufacturing Zone I, Manufacturing
Zone II, Song Than III Factory
West Region: An Giang Industrial Complex, Kien Giang Industrial Complex, My
TBS Group has evolved from a women's shoe processing business into a leading manufacturer of high-end leather footwear and handbags With production facilities spanning from North to South, the company employs over 30,000 workers, significantly contributing to the national economy.
1.1.3 Core Values - Vision - Mission of the Company
"Human Resources - Accompanying Development and Sharing - Innovation and Creativity - Responsibility"
Human resources: Focusing on human resource development, employees are a valuable asset, a strategic weapon contributing to the success and development of the business
Accompanying development and sharing: Accompanying customers, partners and employees to build TBS to develop, succeed and share benefits
Innovation and creativity: Always constantly innovate as the foundation for development
Responsibility: Responsible to the country, community, society and employees to contribute to making life and society better
Mission: To invest in and provide products and services that contribute to helping
Vietnam's industry is increasingly integrating into the global value chain, focusing on continuous improvement and innovation By fostering growth and sharing benefits, it emphasizes corporate responsibility towards the community and society This commitment ensures trust and peace of mind for customers, partners, and employees alike.
By 2025, TBS aims to become a prestigious multi-industry investment company in Vietnam and the region, driven by a strong team, unwavering determination, and a commitment to continuous innovation The strategic vision of our leaders will showcase Vietnam's intellectual prowess and elevate the nation's pride on the global stage.
After 35 years of innovation and development so far, TBS is gradually asserting its position in the market with 6 main business areas:
Figure 1.2 TBS's Field of Activity
Source TBS corporate website, tbsgroup.vn
With over 30 years of experience in the footwear industry, TBS has established itself as a leading Vietnamese company, recognized for its large-scale production capacity and high-quality products The company prioritizes customer interests in its business strategy, leveraging its extensive network of factories nationwide and advanced, professional production lines Employing over 17,000 staff members, TBS operates three product development centers and two shoe sole factories, boasting a current production capacity of 25 million pairs of shoes per year across 33 production lines.
Figure 1.3 Saucony and Merrell brand shoes
TBS's handbag manufacturing industry, established nearly 13 years ago, has made a significant impact both domestically and internationally, demonstrating rapid growth and successfully partnering with renowned global brands such as Coach, Decathlon, Vera Bradley, Tory Burch, and Titleis With an impressive production capacity exceeding one million products within the first year and reaching 10 million after 40 months, TBS maintains an average annual production growth rate of over 20%.
Figure 1.4 Vera Bradley and Tory Burch bags
Investment - Business - Real Estate and Industrial Infrastructure Management:
Specializing in the investment, development, management, and trading of industrial infrastructure services, our expertise extends to industrial parks and both industrial and civil real estate projects We have successfully completed numerous large-scale initiatives, including the renowned Mai House Hotels & Resorts and Mai House Hospitality.
Figure 1.5 Green Tower Di An project and Mai House Sai Gon project of TBS Group
Located in the heart of the southern economic quadrangle of Ho Chi Minh City, ICD TBS Tan Van serves as a pivotal logistics hub, providing a wide range of logistics services With a vast warehouse area of 220,000 m² and the capacity to handle over 60,000 containers, it features both bonded and domestic warehouses The state-of-the-art infrastructure is designed with advanced logistics processes to ensure precise warehouse operations TBS Logistics aspires to be a key and reliable logistics partner for both domestic and international clients, contributing significantly to the logistics network in Vietnam's southern economic region, which accounts for 80% of the country's import and export containers.
Figure 1.6 TBS Group's logistics warehouse
Tourism in Vietnam and Southeast Asia is increasingly focused on investing in and managing chain restaurants, hotels, resorts, and high-end golf courses In 2021, Montgomerie Link Golf Club Vietnam hosted several notable events, including prestigious golf tournaments such as the Open Masters, Friendship, and New Start The club continues to enhance its "Safe Golf Zone" model, ensuring a secure and enjoyable experience for tourists.
TBS Retail aims to be a top distributor and retailer of shoe and handbag brands in Vietnam, backed by a comprehensive nationwide distribution network Committed to quality, TBS Retail enhances customer experience by consistently delivering exceptional products.
1.1.5 Organizational structure of TBS Group
The Board of Shareholders serves as the company's highest authority, possessing the power to vote on issues related to board of directors' violations, oversee company reorganizations, and make decisions regarding the dissolution of the company.
The Company's Board of Directors serves as its governing body, possessing the authority to make decisions that align with the Company's objectives and interests, except for issues that fall under the jurisdiction of the General Meeting of Shareholders.
General Director: The person who manages the Company's daily production and business activities and consumption market, appointed by the Board of Directors
Deputy Director: A person who supports the general director in operating production and business activities, managing human resources and setting regulations for the company
Sales Department: Responsible for the company's business situation, market research and expansion, and promotion of the company's product consumption
Finance Department: Plays an important role in financial control, reporting, and planning to ensure that businesses always have the necessary active capital for business and production activities
The Production Department plays a crucial role in the company's manufacturing process by overseeing operations to guarantee consistent product output It is responsible for managing production costs and ensuring the continuous availability of necessary materials for production.
The primary responsibility of the quality management department is to implement quality control measures that guarantee the final products align with both business requirements and customer quality standards.
Human Resources Department: Ensure the recruitment plan and quality training of human resources to serve the company
Sample room: Ensure the stage of research, development and timely product completion according to customer requirements before reaching the stage of mass production
Introduction to the Wolverine Shoe Production Chain
Figure 1.9 Wolverine Chain Organizational Structure Diagram
A robust business strategy encompasses the development of products and services alongside the establishment of a solid system foundation This involves various departments focused on critical tasks, including strategic planning, operational management, and the organization of system foundation construction Additionally, implementing an effective quality management system and conducting regular audits are essential for maintaining high standards and ensuring continuous improvement.
Operation plan: are management plans that underpin various activities in the company
The organization is structured to establish a solid system foundation, with a hierarchy that includes the General Meeting of Shareholders at the top, followed by the Board of Directors, the Chairman, and the General Director This leadership oversees six key business areas of the company, which include Holding, footwear, sole production, bag manufacturing, ICD-Logistics, and commercial tourism real estate.
A robust Quality Management System (QMS) is essential for negotiating quality requirements with customers and implementing effective quality control procedures It involves addressing defects in both semi-finished and finished products, facilitating discussions with customers when quality issues occur during production Additionally, managing and documenting quality-related information is crucial, including the storage of records post-negotiation Ultimately, ensuring that products consistently meet customer quality standards upon delivery is key to maintaining strong customer relationships.
Effective research and development (R&D) involves strategic planning that prioritizes communication with customers, such as Wolverine and Reebok This process includes gathering crucial information regarding raw material prices and construction details for each shoe model By focusing on customer specifications, R&D can create products that align with market demands and meet high-quality standards.
The Sales and Design department conducts thorough research and evaluation of various product-related factors by analyzing customer requirements for features and quality This information is then integrated with the design and prototyping team, ensuring alignment with the customer's technical specifications.
Effective sourcing involves procuring materials and engaging with suppliers for research, sample development, and custom production It is crucial to monitor and update the status of materials, trims, and accessories to ensure timely delivery.
The Material Quotient assesses the necessary raw materials for production based on order quantities, factoring in typical wastage This calculation utilizes historical data to estimate losses and predict the number of defective products during manufacturing, ensuring efficient resource allocation and minimizing waste.
The technology finishing department will utilize the standard size sample provided by the sales department to finalize the technology, ensuring the development of a standardized SOP for the order code.
Deployment technology involves the ongoing oversight of the production process by the technology completion department after the technology is transferred to the mass production workshop This department monitors the workflow to evaluate efficiency and identify optimal measures, ensuring that all processes are refined until the order is shipped.
Production management balance plan: includes different departments with the following main tasks:
Effective order reception planning and management involve receiving customer order requests from the sales department and coordinating with various departments, including purchasing, production planning, finance, and costing This collaboration ensures the provision of essential information for production, procurement of raw materials, and accurate cost calculations.
Production preparation planning involves strategically allocating personnel, machinery, and equipment while organizing production schedules This process is essential for overseeing monthly and seasonal production, ensuring that production plans align with customer orders Additionally, it includes monitoring the status of production within factory workshops to guarantee that output targets are met efficiently.
Distribution center: consists of different departments with main tasks such as:
• Plan the conditioning of each area and supply
1.2.2 Phong Machine Enterprise Company Ltd
In 2021, TBS Group successfully finalized the integration of My Phong factory (May Phong Enterprise Company LTD) into its operations, marking a significant milestone in the expansion of the group's production capacity, particularly in the Southwest region.
Figure 1.10 Organizational structure diagram of My Phong 1 factory
Established in 2005 in Tra Vinh, My Phong has a total area of over 53 hectares including
My Phong 1 (Head Office): 34 hectares, Tieu Can district, Tra Vinh province
My Phong 2: scale of 13 hectares, in Thanh Son, Tra Cu district, Tra Vinh province
My Phong 3, located in Phuoc Hung commune, Tra Cu district, Tra Vinh province, spans 6 hectares and features extensive facilities, including sports houses, large cultural centers, and a hotel-like dormitory system with 224 rooms Notably, in 2015, My Phong achieved a remarkable production capacity of 45 million products and employed up to 30,000 people.
My Phong Garment comprises a network of various factories, each responsible for different stages of production, such as podium finishing, garment creation, and assembly While some factories are situated in distinct geographical areas, others are located nearby, allowing for efficient transport of semi-finished products Despite the potential delays from transporting between locations, the close proximity of the factories ensures that overall production timelines remain unaffected.
Page 20 geographical areas instead of building factories into combinations, located close to each other is convenient for production and business because the cost of building the factory is very large, so the company's management decided to build factories located in different areas, as well as the cost of transporting semi-finished products to different factories is also lower than the cost of investing and building a new factory This helps in cost savings, investments, and better cash flow management In terms of production capacity, My Phong 1 recorded the highest output in 2019 with 20 million products, the number of workers up to 13 thousand people At the moment, the factory has not used up the factory scale and in the near future, the factory will continue to be invested more due to TBS Group's strategy
THEORETICAL BASIS
Overview of production preparation
Production preparation serves as the critical foundation for all activities occurring before, during, and after production, significantly influencing the overall effectiveness of the production process While there is currently no universally accepted definition of production preparation, it is recognized as a vital phase that encompasses essential activities to ensure a smooth and efficient mass production process Key tasks involved in production preparation include product research and development, technological process design, material and human resource preparation, facility and equipment readiness, and comprehensive production planning It is crucial to distinguish between production preparation and production planning, as the former initiates the production activity chain, which includes coordinating tasks across various machining centers (Chapman, 2005; Brun et al., 2008; Łapuńka et al., 2017).
Approached from another perspective, production preparation can be defined through the decomposition of the independent words "Preparation" and "Production" In particular,
Preparation involves taking necessary steps in advance to ensure readiness for an upcoming activity or event, while Production refers to the process of creating goods or services from various input factors such as raw materials and labor It is clear that effective Preparation is essential for successful Production; the more comprehensive the preparation, the more favorable the outcomes will be.
Page 22 the production process The design of production preparation processes is necessary to plan activities, the labor intensity of the work, the cost as well as the division of tasks among contractors (Łapuńka et al., 2017) The measure of the efficiency of a production preparation is the output product that achieves good quality, meets the requirements of time and above all, the ability to optimize the profit on the cost spent
Effective production preparation is crucial for achieving set goals, as it helps identify the optimal production process while minimizing time, material, and labor waste By detecting and addressing bottlenecks in the production process, businesses can ensure continuous and efficient operations This approach not only enhances labor productivity but also reduces production costs, ultimately leading to increased profits.
Effective production preparation hinges on robust analysis and forecasting skills, enabling businesses to understand market trends and customer needs This insight is crucial for making informed production decisions, fostering the development of new products, enhancing existing offerings, and ultimately increasing competitiveness in the marketplace.
Producing product samples sets quality standards from the outset, enabling effective control over input materials, production processes, and final products This practice not only enhances product quality but also aids businesses in anticipating and mitigating potential production risks, such as raw material shortages, machinery breakdowns, and labor accidents By establishing backup plans and emergency response strategies, companies can minimize potential damages and ensure smoother operations.
Thorough production preparation enhances cost-effectiveness and improves management quality, enabling businesses to allocate resources efficiently and control production timelines and expenses This approach boosts production management efficiency, ensuring that targets are met on time and with high quality In an increasingly competitive landscape with rapidly changing sales markets and shorter order fulfillment times, the effective utilization of production capacity has become essential Consequently, meticulous production preparation is crucial for conducting efficient production activities, delivering high-quality products that satisfy market demand and drive profitability for businesses.
Production preparation process
Production preparation, like production planning, follows a specific process tailored to each business's strategy A company that implements a detailed planning process can effectively meet product demand, minimize production time and costs, and reduce waiting times between production stages.
Step 1: Research and forecast market demand, financial capacity or investment capital, human resource capacity, raw material supply capacity and capacity of machinery and equipment for production Accurately identifying these grounds will help the business plan be more feasible and realistic
Step 2: Prepare machinery and equipment, analyze the product into parts, details, determine the necessary stages to produce the finished product Based on the technical requirements of the product and the financial ability of the enterprise, select the appropriate technology, machinery and equipment Determine the sequence of stages, the time to perform each stage, and the quality standards to be achieved to establish the production process The design of the layout of the factory and warehouse ensures a spacious, airy, safe and convenient working space for production
Step 3: Prepare the raw materials, trims and accessories necessary for production, including quantity, quality, supply Choose a reputable supplier, ensure the supply of materials of the required quality, quantity and time Negotiate and sign material purchase and sale contracts with suppliers
Step 4: Prepare human resources: Determine the number and professional qualifications of human resources for each production stage Hire new employees or retrain existing employees to meet job requirements Assign work to each employee, ensuring that each person has clear tasks and is suitable for their capabilities
Step 5: Production planning: Determine the number of products that need to be produced in a certain period of time, production schedule, and important timelines Allocating resources (human, material, financial) to each stage of production, ensuring balance and efficiency Make detailed production plans for each day, week, month, including preparation, production, and quality inspection activities
Step 6: Trial production: Conduct the production of a small batch of products to check the production process, detect and fix errors Evaluate the quality of the test product, the efficiency of the production process, and adjust if necessary Develop a standard production process to operate mass production
Step 7: Deploy mass production: Mass production according to the approved plan
Consistently monitor and oversee product quality throughout the production process to ensure compliance with established standards Regularly assess and enhance production efficiency while seeking innovative strategies to boost productivity, improve quality, and minimize costs.
Factors affecting production preparation
The quality and timely arrival of raw materials are crucial for ensuring the production of high-quality finished products Delays in material delivery or inconsistencies in their quantity and quality can lead to production setbacks and missed deadlines Therefore, it is essential to accurately calculate the required quantity of raw materials and rigorously monitor the quality of supplies from suppliers.
Machines play a crucial role in production activities across factories and enterprises, enhancing speed, accuracy, and overall productivity By utilizing modern machinery, businesses can significantly improve product quality while minimizing errors Furthermore, machines help reduce labor costs and decrease the need for manual operations, making them an indispensable asset in any production environment.
In manufacturing, the human factor is crucial for order completion, involving both leaders and employees who share the common goal of delivering quality products on time This includes not only those who plan and manage production but also the operators who handle machinery and equipment The creativity of individuals plays a vital role in developing solutions that enhance efficiency, speed, and cost-effectiveness in the production process, underscoring the irreplaceable value of human input over machines or artificial intelligence.
Production planning involves outlining specific tasks and monitoring their implementation based on existing conditions and achievable goals to meet the manufacturer's initial objectives.
Standard Operating Procedures (SOPs) are crucial in production preparation, as they standardize processes based on sample production steps, enhancing consistency and quality across all stages of mass production By adhering to established standards, SOPs minimize errors and risks, ensuring high-quality outputs They clearly outline necessary steps while eliminating redundancies, optimizing work performance, and reducing time and costs Additionally, SOPs help predict potential issues during production preparation, allowing for effective risk management and control They facilitate the evaluation of work efficiency, identifying areas for improvement in the production process Furthermore, SOPs provide opportunities for employee skill development and professional growth Ultimately, the diligent development and implementation of standard processes significantly boost productivity, product quality, and market competitiveness for businesses.
Analysis Method
A causal diagram visually illustrates the relationship between an outcome and its underlying causes, emphasizing the need to monitor and evaluate quality indicators (Nguyen Dinh Phan, 2005) The primary aim of a cause and effect chart is to identify the root causes of quality issues in products, services, or processes, enabling the proposal of corrective measures to enhance quality In enterprises, quality problems often arise from key factors known as the 4Ms: Man, Materials, Machines, and Methods (Ishikawa, 1976) Additionally, the framework has evolved to include a fifth element, 'Measurement,' expanding to 5Ms and incorporating various factors such as information sources and external environmental influences (Ishikawa, 1985) By addressing these primary causes, discussions can lead to the identification of secondary causes, facilitating a comprehensive understanding of quality challenges.
Page 26 branches) in order to investigate all the causes of undesirable results in quality management activities at organizations
Figure 2.1 The causal chart shows the causes of quality problems
The Analytic Hierarchy Process (AHP), developed by Saaty in 1980, is a powerful decision-making tool designed for complex, multi-criteria situations It aids in prioritizing interrelated and competing criteria within the framework of a specific decision goal By evaluating the relative importance of decision criteria, AHP facilitates trade-offs, enabling a quantitative analysis that helps identify the optimal choice based on comparative indicators The AHP methodology involves three essential steps to guide the decision-making process effectively.
Step 1: Hierarchy format: the first level of the hierarchy contains the decade goal, whereas the subsequent lower levels represent the progressive breakdown of the decision criteria, sub- criteria and the alternatives for reaching the decision goal;
Figure 2.2 Hierarchical tree diagram of AHP evaluation criteria
Step 2: Pairwise comparisons: decision-makers (who are often domain experts) are asked to complete pairwise comparisons of the elements at each level of the hierarchy, assuming the elements are independent of each other In this regard and considering the decision goal, comparisons are made between the relative importance of each two criteria at the second level of the hierarchy
Element aij: expresses the importance of the i-row indicator compared to the j- column indicator
To construct the matrix, we assess the relative importance of each element by asking how many times one element (a1) is deemed more beneficial than others (a2, a3, , an) This process is repeated for each element, comparing their importance against all others The relative importance of index i compared to index j is determined by the ratio of k, which quantifies these comparisons effectively.
1 to 9), the opposite of indicator j to i is 1/k Thus a ij > 0, a ij = 1/a ji , a ii =1
In the evaluation process, every two sub-criteria within the same criterion (level two) are systematically compared This method continues recursively, ensuring a thorough analysis The comparisons typically utilize a nine-point scale, as illustrated in the accompanying table.
The process of collecting evaluation values is carried out through the survey method
Step 3: Verification of consistency: expert judgments are necessary for determining the relative importance of each criterion and any alternative to achieving the decision goal Because AHP allows subjective judgments by decision- makers, consistency of the judgments is not automatically guaranteed Therefore, consistency verification is essential to ensuring optimized outcome
To calculate the weights for the indicators, AHP can use different methods, two of which are the most widely used being Lambdamax :
Calculation of CR (Consistency Ratio): To price the reasonableness of the values of the importance of the indicators
Equal I m por tan ce Mode rat el y I m por tan ce Str on gl y Im por tan ce V er y St rong ly Im p or tanc e A bsol u te Im p or tanc e
Mode rat el y U ni m po rt ant ce
Str on gl y U n im por tan tce
V er y St rong ly U n im p or tan ce
A bsol u te Un im p or tanc e
The Consistency Index (CI) measures the consistency of judgments in a pair comparison matrix with n criteria The largest eigenvalue, denoted as 𝜆 𝑚 𝑎𝑥, indicates the degree of consistency, with values approaching n (the size of the matrix) reflecting greater consistency in the assessments.
𝑛 − 1 And the RI stochastic index
Table 2.1 Random index corresponding to the number of RI factors
Saaty, T.L., (2008) pointed out that a consistency ratio (CR) of less than or equal to 10% is acceptable In other words, 10% of experts answered questions completely randomly
CR greater than 10% indicates inconsistency in the evaluation and needs to be evaluated and recalculated
Total productive maintenance (TPM), introduced by Nakajima in the 1980s, established the overall equipment effectiveness (OEE) metric to evaluate the productivity of factory equipment By identifying and measuring losses in key manufacturing areas—availability, performance, and quality rate—TPM enhances equipment effectiveness and boosts overall productivity.
The Overall Equipment Effectiveness (OEE) concept is gaining traction as a vital quantitative tool for measuring productivity, particularly in semiconductor manufacturing Its adoption has expanded to various other industries, where manufacturers leverage OEE to enhance asset utilization and improve operational efficiency.
Overall Equipment Effectiveness (OEE) is a critical metric that evaluates total equipment performance by assessing how effectively machinery operates (Williamson, 2006) This comprehensive analysis tool focuses on three key components: availability, performance, and the quality rate of the output, providing a clear picture of equipment efficiency.
Figure 2.3 OEE measurement tool and perspectives of performance integrated in the tool Source P Muchiri & L Pintelon (2008)
Availability (A): the comparison between the actual time it takes for a machine to create a product and the potential uptime
Performance (P): is the comparison between the actual output and what the machine can produce in the same time
Quality (Q): the comparison between the number of products that meet the requirements and the customer's technical specifications with the number of products produced
The efficiency of the device is measured according to the following formula:
OEE = Valuable Operating Time/ Loading Time
OEE = (Operating Time/ Loading Time) x (Net Operating Time/ Operating
Time) x (Valuable Operating Time/ Net Operating Time)
Availability (A) is the percentage of requested availability time minus downtime divided by requested availability time using the following formula:
Availability = (Required availability – Down time) / (Required availability)
Or: Availability= (Operating time) / (Planned production time)
Equipment Performance (P) is the percentage of time spent on production divided by the operating time according to the following formula:
Performance = (Design cycle time x Output) / (Operating time)
OR: Performance = (Ideal cycle time) (Operating time) / (Total pieces)
Quality (Q) is the percentage of finished products divided by the total product produced according to the following formula:
Quality rate = (Production input – Quality defects) / (Production input)
Or: Quality rate = (Total pieces – Quality defects) / (Total pieces)
In a workshop, various production lines operate with distinct parameters, leading to variations in production time, product types, quantities, quality, and potential failures Consequently, each line will have its own specific Overall Equipment Effectiveness (OEE) indicators.
There are 2 ways to calculate OEE for the whole workshop as follows:
Option 1: Averaging OEE (linearized) metrics
See that the OEE indicators of each line are equal, and the OEE of the workshop is determined as follows: (OEEPX) = (OEE1+ OEE2 + + OEEn) / (N)
Note: N is the number of independent lines in the workshop
Option 2: Weighted Average of OEE Indicators
The Overall Equipment Effectiveness (OEE) indicators for each production line reflect varying levels of contribution, typically weighted by the added value each line brings to the workshop The overall OEE for the workshop is calculated based on these contributions.
(OEEPX) = (OEE1*W1 + OEE2*W2 + + OEEn*Wn) / (W1 + W2 + Wn)
Currently, the standard for an optimal world-class OEE score is 85% (Seiichi Nakajima,
Quality, as defined by Juran (cited by Nguyen Thi Dinh, 2008), refers to the alignment with the customer's intended use, embodying the 80/20 rule where 80% of costs arise from just 20% of potential causes Juran was a pioneer in emphasizing the importance of focusing on "a few things that matter" while recognizing that many factors may be insignificant.
A Pareto chart is a column graph that displays collected data in descending order, highlighting the most significant problems that need to be addressed first This visualization allows for easy identification of the most frequent errors and establishes a priority order for problem-solving, as well as showcasing the outcomes of process improvement initiatives By utilizing the Pareto principle, businesses can effectively concentrate their improvement efforts on areas that yield the highest impact.
Figure 2.2 Pareto Chart of Assembly 6 Downtime
THE CURRENT SITUATION OF PRODUCTION
Wolverine Worldwide Chain Production Preparation Planning
The production preparation planning of the Wolverine Worldwide chain is divided into
The product development process consists of four main stages: Develop, Sale, Confirm, and Production, progressing from initial concept at the sample development center to mass production at the My Phong 1 factory Typically, orders are prepared three months ahead of the new production season, involving steps such as conceptualization, design, editing, purchase order construction, and sample shoe production All activities during this development phase occur at the sample development center, where the brand's sample development department closely monitors and adjusts the production of new model shoes, which feature entirely unique designs Challenges often arise, including discrepancies between the design and the final product due to sewing errors or unsuitable materials Once the initial sample is produced, the customer representative and production department collaborate to evaluate fit and gather feedback, making necessary adjustments before moving to the confirmation stage.
The sample development center will produce complete shoe samples in larger quantities, typically ranging from 5 to 10 pairs, to facilitate the purchasing department in sending these samples to international customers Feedback from customers will be collected to frequently adjust the designs according to the specific market needs of different countries Once consensus on the new shoe model is reached, the Planning Department will create a comprehensive production plan for each shoe code, detailing commodity codes, quantities, delivery dates, SOPs, human resource allocation, machinery, equipment, and material preparation The Development Department plays a crucial role in ensuring the technology and standards for the shoes are met.
Page 34 production processes, and key points to note in the production process is formed; The above works are an essential foundation for effective mass production
Figure 3.1 Overview of the production plan divided by stages
My Phong 1 Factory will efficiently allocate resources as per the designated plan and consistently update production results using the SAP system This allows the Planning Department to monitor operations and make informed decisions, ensuring optimal production efficiency at the factory.
3.1.1 Basis for making a preparation plan
Production planning will be formed based on the identification of factors that will directly affect the production process in turn:
Step 1: Forecast the production quantity for each product: forecasting the number of products will be the premise for being able to analyze materials, raw material inventory, and plan resources
Step 2: Production method: determine which production method, process, or machine to serve production well
Step 3: Supply of raw materials and human resources: Identify the problem of supply of materials and human resources to facilitate the balance of costs and quality of both materials and the capacity of human resources
Effective forecasting is crucial for production planning and shapes the strategic direction of enterprises, serving as a foundation for resource allocation Businesses typically categorize their footwear production into two primary seasonal groups: Spring-Summer shoes, produced from October to March, and Autumn-Winter shoes, made from April to September By analyzing seasonal order volumes, companies can evenly distribute their production quotas across all 12 months.
The 12-month order receipt and allocation plan is developed through statistical analysis, as outlined in Table 3.1, which aligns resource allocation with customer demand forecasts and professional capacity This proactive approach enables the planning department to effectively recruit and train labor to fulfill production requirements In the Wolverine Worldwide production chain, resource allocation relies on forecast data, internal capacity, and available orders Forecasting is achieved through comprehensive market data collection and analysis, incorporating order trends, sales history, and customer feedback, utilizing both qualitative and quantitative methods to accurately predict order demand.
Page 36 identifying consumption trends, changes in the market and long-term vision It can be mentioned that the forecast of seasonal product lines The products will change to suit the weather, so the company can rely on it to make appropriate business strategies such as identifying target customers and sourcing appropriate materials At the same time, based on the assessment of production capacity through the study of production history, operability and quality of machinery and labor, the forecast of orders is made and allocated Finally, the actual number of products ordered from customers will be counted in the On-hand order section
Order fluctuations were evident in January, February, August, and September, with the lowest demand and labor rates occurring in the first two months, peaking at only 512,000 orders in February—about 50% of the orders during the busier months This decline is partly attributed to the Lunar New Year holiday, which prompts employees to return home, and significant labor turnover at year-end as workers seek new opportunities Consequently, production capacity fails to align with demand In August and September, despite strong production capabilities, order rates drop due to external factors impacting customer demand, leading to overproduction and labor surplus To address this challenge, management is considering rescheduling factory working hours to optimize costs and resources.
Page 37 plan for the following months Thanks to this overall picture of the allocation of production plans for the whole year, it helps production units come up with a suitable roadmap for recruiting and training personnel The overall picture that this table provides shows that the role of production preparation must have long-range functions, short-range functions and functions in handling and regulating issues related to orders, labor, and supply conditions to serve production units effectively.
Overview of the shoe manufacturing process
Roles, tasks and functions of departments
Figure 3.2 General process of shoe production at the sample factory
Pressing the base and perfect
The shoe production process at Thai Binh Investment Joint Stock Company consists of five main groups, each corresponding to distinct areas within the factory To ensure timely error detection, the quality control department is strategically distributed across all five production areas Consequently, comprehensive quality inspections are primarily conducted at the end of the Sewing and Assembly stages.
The raw material warehouse area is a place to store and preserve input production materials, divided into 2 storage areas:
Zone 1: Leather material, PU, sewing thread, shoelaces, Velcro spikes, trims and accessories; Tools for production: cutting knives, printing molds, glue, color Zone 2: Fabric raw material, mesh fabric, shoe lining fabric
Materials are systematically organized in the warehouse based on their groups, colors, and similar properties Upon arrival, each material undergoes a quality check and is tagged with a "Sample Material Tag" for tracking purposes The Sample Supplies Card provides detailed information, including the brand, material name, color, entry date, supplier, location, material code, and size Materials that pass quality inspection receive a green label marked "OK," while those that fail are marked with a red label stating "NO." Non-compliant materials are forwarded to the QA department for further evaluation.
In the initial stage of the production process, the production planning department forwards order details to the Purchasing department, which prepares all necessary materials Following Swatch's guidelines, the raw material warehouse ensures that all trims and accessories are supplied to the pre-production processing area Effective warehouse management is crucial, with a primary focus on preservation capacity to prevent damage to production materials Improper storage, particularly of PU leather, can lead to issues such as fading, peeling, reduced durability, and unpleasant odors, often due to inadequate temperature and humidity control Therefore, it is essential to maintain a stable temperature environment for storing PU materials.
Page 39 of 20-35 degrees Celsius, the ideal humidity is 40-50% Meanwhile, the average humidity in Southern Vietnam is quite high, averaging from 60-75% of the peak in the summer months of May to June, with heavy rainfall, the humidity can reach 80%
The input material processing area undertakes the processing of raw materials into component arrays for the sewing stage This department is carried out through 2 main groups of work:
The Cutting Group is responsible for shaping and cutting input materials like leather, PU, and mesh fabric to meet the specific quantity and quality requirements outlined in the sample design board Various cutting machines are employed based on the material's characteristics, product code, and shoe details Currently, there are three primary types of cutting processes utilized in this operation.
The CNC laser cutting machine is designed for efficiently cutting fabric and mesh materials, offering precise and clean cuts This advanced technology allows for the simultaneous cutting of 10 to 15 layers, making it ideal for high-volume production Its accuracy and speed enhance productivity, ensuring a smooth cutting process for various applications.
The CNC Knife Cutting Machine is ideal for cutting thick and tough materials like leather and PU, which require high precision for intricate details Unlike CNC lasers, which struggle with small details of 1-2mm and can burn materials, CNC Knife machines excel in fabric processing, albeit with lower productivity.
The knife mold cutting machine is a manual device that utilizes hydraulic compression to cut materials, placing them beneath a knife mold The choice of knife depends on the specific shape of the details being cut, and it is capable of cutting both leather and fabric This method offers precise and sharp cuts, enabling quick processing of small parts without the need for programming or excessive energy consumption However, a notable drawback is the limited variety of knives and the longer production time for creating knife molds compared to CNC methods As a result, knife die cutting is primarily suited for high-volume designs that share similar characteristics.
Material processing involves several key steps to enhance the quality and branding of products After cutting, materials are printed with patterns, pressed with logos, and embroidered with brand names on their surfaces To reinforce these materials and achieve desired properties, techniques such as heat pressing are employed, bonding the fabric with a thin plastic layer for increased durability.
Screen printing involves the use of specialized molds, printing tables, and heat dryers to produce decorative patterns or logos on shoe materials, particularly on the sides Workers meticulously arrange the materials on the printing table and secure them with a mold that features the desired design, ensuring high-quality results that meet order specifications.
Pressing: this stage is used for shoes that require embossed logos or decorative details It is done by hydraulic compression, glue
Skiving is essential when working with leather or PU materials, particularly at the connecting edges, like the toe of a shoe Reducing the thickness in these areas helps prevent needle breakage during sewing, which can occur if the material is too hard or rough.
Embroidery: used for orders that require embroidery of corporate logos or sewing basic decorative motifs
During the printing process, various errors can occur, including ink smearing, misalignment, incorrect mold usage, and logo peeling due to inadequate temperature or pressure To ensure high-quality output, a dedicated QC department conducts thorough inspections after each processing step to identify and rectify these issues, either by modifying or discarding defective materials.
The sewing process in the workshop involves two main stages: preparatory sewing and finished sewing Due to the manual nature of most sewing activities, a significant number of personnel are required during this phase.
Quality control is a critical aspect of the shoe manufacturing process, with checks conducted after each processing step In the sewing department, common quality issues include misaligned positioning lines, incorrect sewing placements, non-standard gluing, and improper sewing sequences Before the shoe cap is perfectly sewn and the product moves to the assembly area, a final quality assessment is performed to ensure adherence to standards.
Assembly area (base gluing): There are 3 main stages: shaping, base gluing and finishing base pressing:
Preparations for the production of the Wolverine Worldwide chain
There are 4 shoe systems manufactured at the model shoe factory - Thai Binh Investment Joint Stock Company, including: Reebok, CAT, MERRELL (man/kid), SAUCONY (man/kid)
Orders are primarily produced on a seasonal basis, necessitating the planning department to calculate and organize crucial details such as order type, quantity, delivery dates, Swatch, and sample production processes This department is vital for scheduling the essential production stages to ensure timely project completion Upon receiving information from the planning department, the factory reassesses various factors to align operations accordingly Key elements influencing production planning at the factory include material quantities, workforce, technological needs, potential risks, order requirements, and production planning directives.
Figure 3.5 Diagram of the production planning process at the sample sewing factory
The elements involved in the production process are crucial components necessary for achieving the established goals Each element comprises various smaller factors within the process chain, which interact to create a cohesive model Their specific roles are essential for the overall functionality of the production system.
Orders are crucial as they directly influence production and resource planning Prior to developing a detailed plan, an analysis of customer demand forecasts is conducted to gain insights into customer consumption patterns.
Table 3.2 Production plan of each shoe code (Unit:1 pair)
After receiving the order numbers, conduct statistics on the overall data of the order such as samples, shoe codes, quantities, make PO and most importantly, the date of shipment
The above information, when fully inventoried, will be transferred to the production operation department Based on that data, the operating room will create a specific production plan for each order
When the design and quantity from the customer's order are synthesized, make a list of materials to buy for production The board of directors issues a production order, which includes the name of the product code, quantity, completion time and materials to be used to the relevant departments The Planning Department relies on data from the factory to understand the progress, production schedule and warehouse staff to grasp the number of existing warehouse materials for production planning At the same time, the purchasing department purchases raw materials and sends the estimated time of materials to the warehouse to the staff of the planning department When the plan is finalized, proceed to production and report the progress In case of problems arising during production or progress, the condition of raw materials should be reported to the planning department to make appropriate adjustments to complete the order on time
Saucony-Adults USA 27-Thg6 13-Thg6 Jazz Triple 552
MERRELL Australia 06-Thg7 21-Thg6 Jungle Moc Kids 600 Saucony Netherland 21-Thg6 07-Aug6 Kinvara 14 A/C 408
CAT Chile 30-Thg6 21-Thg6 AMP Canvas 600
CZECH Republic 18-Thg6 14-Thg6 Bravada edge 2 thermo mid WP 461
The detailed production plan table provides comprehensive information on all orders scheduled for production, including the execution sequence, material receipt times, planned output, factory fulfillment, actual output, and finished product inventory This facilitates easy monitoring and control for administrators over the production process and the final products Key elements of the production and export plan include the production month, model type (new or old), implementation weeks for each stage, material purchase weeks, material status, customer and country names, shoe codes, and planned output The arrangement of orders is based on shipment timelines, ensuring efficient processing and delivery.
Page 46 receipt of materials, the technological line of machinery and equipment, the specialization of each line and the capacity of the implementing staff Each order has
The article outlines essential details regarding material batches, including SO and PO identifiers, the primary color, the production plan, and the factory involved It specifies the base code utilized, the required output at each production stage, as well as the final products, including hats and bases, post-production.
Production allocation and preparation of materials
Production plan: When forming a production plan, managers will jointly analyze factors related to actual production capacity on the following factors:
Table 3.4 Human resource allocation at My Phong 1 factory Content
Cutting Pre-production Sewing Assembly Outsole finishing
Planned production (pair) 320.000 320.000 300.000 310.000 310.000 Mean production/ day 12.308 12.308 11.111 11.923 11.923
Effective human resource planning is crucial in a prototype factory where diverse shoe models are produced, each requiring unique designs, colors, and decorative motifs This diversity necessitates tailored production processes for each shoe code The Production Management Board must strategically allocate workers and ensure quality labor to optimize operations on the production line, enhancing overall efficiency.
Materials play a crucial role in the production planning process, significantly impacting actual production Each shoe model is meticulously analyzed to determine the necessary materials based on detailed specifications Following this analysis, material samples are collected to create a Swatch Book In instances where materials are insufficient for production or when special materials are requested by customers for import, the Purchasing Department prepares a report to facilitate the import of raw materials.
Technology: in addition to analyzing technological factors such as machines and processes, it will dispatch reasonable human resource planning, maximize production capacity
Effective machinery evaluation involves strategically planning which products will be produced using specific equipment This includes a detailed prioritization of machinery usage tailored to the nature of the codes being processed Additionally, the coordination of maintenance and upkeep is a crucial aspect of the production planning process, ensuring optimal performance and efficiency.
To establish a new standard process for specific shoe models, it is essential to implement innovative technologies and production methods that diverge from traditional practices This approach requires a well-defined plan focusing on processing, prioritization, and adherence to quality standards.
Risk prevention is essential in any production plan to ensure uninterrupted production activities This involves statistically analyzing production history from previous orders to develop specific contingency plans based on similarities in machinery, personnel, and materials Unexpected challenges can arise in the production process, including labor safety issues, machinery malfunctions, personnel problems, and less common factors such as weather, political changes, and environmental concerns, all of which warrant careful consideration.
Material preparation for production will align with the production plan roadmap for each order, ensuring that materials are ready 1 to 2 weeks in advance, depending on the type of material required This preparation phase is closely coordinated with the Purchasing Department, which is responsible for planning purchases, managing supply progress, and addressing supplier-related issues.
When executing a contract, the ordering party typically specifies requirements regarding the shoe design and the quality of materials to be utilized Suppliers are expected to adhere to these standards to ensure compliance and satisfaction.
Page 48 are chosen as branches, companies, customers or suppliers from their partners to ensure quality and trade relationships Therefore, the origin of raw materials is not fixed, which can be imported from abroad, some provided by domestic enterprises Most of the most important materials to form shoe caps are clearly stipulated by partners in terms of origin, auxiliary materials such as shoelaces, plastics, and adhesive materials can be actively searched for suppliers without depending on customers The WWW – TBS chain is currently cooperating with 142 domestic and foreign suppliers The quantity of materials ordered for production is different from season to season Therefore, only 107 suppliers prioritize choosing to buy regularly due to the availability of seasonally suitable raw materials as well as competitive prices and good quality raw materials Depending on customer regulations, foreign suppliers account for 30% (32 suppliers) and 70% (75 suppliers) are domestic suppliers Some suppliers have cooperated with TBS for a long time, since the early stage of formation such as Simona, Guanxing, TongHong, Currently, TBS's domestic suppliers are mainly in Dong Nai, Ho Chi Minh City, Binh Duong and neighboring provinces Raw materials from abroad mainly come from China, India, and Europe, and some other countries Domestic raw materials have a shortened delivery time, the delivery time is usually 1 week after ordering The time for the raw material supplier to notify the factory of the order to start shipping by plane is from 3 to 5 days and by ship, it is about 10 to 13 days to arrive at the total warehouse From the general warehouse to the factory for production is 3 to 7 days
Figure 3.6 The chart shows the supplier's current collaboration priorities
Synchronization rate of raw materials to prepare for production
Before entering the warehouse, the quantity of materials supplied is verified to ensure they meet the required input conditions Delays and shortages of raw materials are common, particularly during seasonal transitions In cases where materials are insufficient and not rectified by the supplier in line with the production schedule, the issue is addressed by notifying the shipping department and requesting compensation for any incurred damages, such as production downtime Once materials are stored, they undergo inspection by the Quality Control (QC) department prior to production Any materials failing to meet production standards are sorted and reported to the purchasing department for further action with the supplier.
Table 3.5 Ratio of suppliers to meet the number of raw materials in May
Materials Quantity Materials sourced (%) Materials yield (%)
Pair TBS Customer TBS Customer
Assess the current situation of production preparation for the Wolverine
In the first five months of 2024, the My Phong 1 factory cluster achieved an impressive production output of 99% of its planned target of 2,209,000 products This remarkable performance highlights the effective management and high-quality skills of the dedicated workforce.
Page 58 factory In addition, there is also a great contribution from the production preparation planning staff who always closely monitor from the preparation of people, materials, machinery to handling problems arising in the production process at the factory
Table 3.8 Planning and implementation January - May (2024)
Production results: 01/01 - 31/05 (2024) Output % Man-day % PPH %
The Assembly and Outsole Factories have surpassed expectations, achieving product output rates (PPH) of 98% and 95%, respectively In contrast, the Sewing Factory remains a concern, with a PPH at an average threshold of 90% and overtime exceeding the planned amount by 11% This discrepancy highlights issues related to the uneven skill levels among workers in sewing operations.
High flexibility in production preparation and administration
Effective production preparation is crucial for large-scale manufacturing, as even minor issues can significantly disrupt operations Challenges may arise from poor-quality materials, urgent orders that take precedence, or misalignment in production schedules, leading to potential halts in specific product lines To address these challenges, it is essential to maintain flexibility in production planning, allowing for quick adjustments to minimize time and resource waste Staff must adapt the detailed production plan on a daily, weekly, or monthly basis while ensuring that any costs incurred from these incidents are kept to a minimum.
Effective application of the internal information management system
The planning and preparation for the Wolverine World Wide product chain are conducted at TBS – Group's head office, while mass production occurs at the My Phong 1 factory in Tra Vinh province Despite the significant geographical distance between these locations, there is a strong information flow between them Any production issues at MP1 are promptly updated in the SAP system, enabling the Operation Department to quickly access real-time data and make timely decisions SAP facilitates the sharing of daily production output, progress against plans, and material-related figures, ensuring consistent and up-to-date information across all departments.
Build a professional, detailed and experienced production process
To achieve a seamless production flow, the production preparation planning team is essential, ensuring all elements are in place and ready to adapt to potential issues Each stage before production is carefully assessed by a team of skilled professionals, allowing for a highly accurate and well-structured process for each production season With years of planning experience, the team anticipates possible risks and develops strategies to address them even before mass production begins The "production focuses" outlined in the Standard Operating Procedures (SOP) exemplify the Planning Department's commitment to professionalism and efficiency.
The quality of input materials has not been controlled
Frequent disruptions in production plans arise from a lack of synchronization in input materials, often due to suppliers' inadequate supply capacity Delays caused by late deliveries or subpar quality from suppliers complicate planning, extend production timelines, and harm customer reputation While some suppliers fail to meet customer requirements, many others still exist in the market.
Page 60 directly selected by TBS but do not achieve the results as originally committed Although there are many suppliers that can supplement to solve the above problems, there is currently no method or scale to assess whether they are reputable or not
Direct production labor has uneven quality of workmanship
The company has neglected to invest in skill development and training, resulting in a shortage of skilled workers capable of multi-tasking to meet market demands Additionally, the working conditions are subpar, with employees lacking protective equipment when handling toxic chemicals, and facing a hot environment that jeopardizes their long-term health This uncomfortable setting contributes to inefficiencies and reduced productivity Recruitment practices focus solely on meeting assigned quotas rather than enhancing workforce quality, further hindering production efficiency and progress.
Machinery and equipment for production are not enough to meet production needs
In a production line, varying productivity levels across different stages can hinder overall efficiency, particularly when certain stages require maximized output to keep pace with others This issue often arises from insufficient machinery and longer production times at specific stages Additionally, a lack of proactive maintenance—driven by cost-saving policies—leads to machines being repaired only when problems occur, resulting in increased downtime and longer waiting periods for repairs.
IMPROVING THE EFFICIENCY OF PRODUCTION
Solutions to improve the efficiency of input material control
4.1.1 Raw material input quality control process a Basis for proposing solutions
Effective management of raw materials is crucial for maintaining production quality, as unexpected issues can arise even after passing initial inspections Developing a standardized process for input material management is essential, as thorough inspections can significantly reduce risks during production By tightening the input testing procedures, factories can decrease the likelihood of errors and enhance overall quality control Prioritizing the selection of reliable suppliers is vital to minimize the occurrence of defective materials.
Figure 4.1 Fishbone Diagram: factors affecting the material synchronization rate
The reason for the low synchronization of raw materials for production comes from many factors: human factors, mechanical factors, method factors, measurement factors,
Page 62 environmental factors, raw material factors; these factors have the ability to directly and indirectly affect the ability to control the quality of raw materials
Figure 4.2 Current input material quality control process
The quality control (QC) process for input materials encounters significant challenges due to the lack of clearly defined areas for unqualified materials in the warehouse Instead of a systematic organization, the distinction relies solely on material tags labeled "YES" and "NO." This ambiguity often leads to the mixing of materials, resulting in contamination and spoilage, such as mold spreading to other products.
Figure 4.3 Proposed input material quality control process
Source Compiled by author c Feasibility and challenges
Implementing an optimal control process for input materials facilitates error detection and assigns management responsibilities to individuals Additionally, selecting a reputable and qualified supplier is crucial for ensuring quality and reliability in the supply chain.
Label "YES" Warehousing in areas that have not reached Labeling "NO"
Page 64 it will be the key point to decide largely on the quality of raw materials This helps to minimize waste, reduce the rate of defects due to raw materials and increase production efficiency In order to implement and achieve the effectiveness of the proposal process, it is necessary to overcome the specific barriers of the production environment and the culture of the enterprise In particular, the openness of quality employees in receiving, adjusting the process and following the process will be a great advantage to be able to implement the solution d Expected Results
Implementing a strict input material management process offers significant advantages for businesses, primarily by enhancing the quality of input materials, which is crucial for producing high-quality output products By minimizing cancellations due to material defects, companies can optimize reusability and ensure a stable production process Additionally, this approach saves time and costs by screening out low-quality materials, thereby reducing product defects and mitigating risks to production schedules and shipment routes Furthermore, it fosters the professional development of employees, promoting a shared understanding of the material control process When each team member recognizes their role in the system, material control becomes more effective, leading to reduced costs and improved productivity Ultimately, businesses can minimize waste and boost profits.
4.1.2 Supplier Control a Basis for proposal
Frequent issues such as inadequate quality assurance of raw materials and delays in delivery often stem from insufficiently detailed evaluations and selections of suppliers.
To address issues related to quality assurance and delays in raw material delivery, businesses must tighten their supplier selection process This strategy not only saves time and costs but also enhances competitive advantage in the market When choosing raw material suppliers, companies must consider multiple criteria, with quality and timely supply being crucial factors alongside cost.
Page 65 affecting production preparation and the risk of causing direct damage to production The delay in supply time will lead to a change in production time, stretching the export route In addition, the defect of raw materials also has a significant impact, once the inspected component detects errors, wrong colors of materials or simultaneous errors, the consequences are huge, affecting labor costs, production routes, taking time to repair the finished product, not only that, but also delaying the delivery time if it is not corrected The above two factors are painful problems for planners, the plan is often changed when the raw materials do not meet enough and in accordance with the predetermined production plan Therefore, the author proposes to evaluate the selection of suppliers to ensure that materials must meet quality and sustainability standards to solve the above situation b Recommended content
Apply the AHP method to evaluate and select suppliers
The steps to evaluate the selection of supplier are as follows:
Step 1: Develop a list of suppliers that TBS Group has cooperated with during the critical period
Step 2: Redefine partnerships, assess challenges when implementing the plan, consider the financial resources that need to be used Coordinating with departments such as quality inspection, purchasing, shipping, and international relations
Step 3: Analyze and determine the criteria that are suitable for the actual needs of the company Establish a questionnaire from which to collect opinions from experienced managers to compare the importance between the two different factors (table 2 appendix) Based on the surveyed data on the factors affecting the decision to choose a supplier and the correlation weighting between those factors to conduct the analysis
A comprehensive review of research by Nguyen Thi Duc Nguyen, Le Phuoc Luong, and Le Hoang Lan (2015), along with direct interviews with department heads in Purchasing, Quality, Logistics, Planning, and Production, has identified six key factors that influence the selection of material suppliers for production These factors include Quality, Price, Shipping, Service, Payment, and Brand.
Table 4.1 Supplier selection criteria table Main
Quality: The number of returned goods (wrong delivery: wrong specifications, models) damaged goods during transportation, unguaranteed packaging
Ability to meet each item, minimum order quantity
Forms of discounts and discounts
Shipping The delivery quantity meets enough
Delivery time: The leadtime of each item
Payment Delivery Form: Support direct delivery
Payment Support: Time to send sales invoices and documents
Debt term: Accept debt from 30 days to 45 days
Service Customer service: Support returns due to mistakes and errors of both parties
Information response: Accuracy of information, information response time about delivery time confirmation, quotation order information
Brand Highly reputable brand in the market
The selected criteria, agreed upon by experienced managers, aim to establish a priority matrix reflecting staff opinions The collected data is presented in a matrix format, highlighting the comparative importance of each criterion.
Table 4.2 Matrix comparing the importance of the criteria Criteria Price Quality Brand Service Shipping Payment
From the expert's perspective, the decision to select a supplier should prioritize the
"Quality" criterion of raw materials Next, the supplier needs to satisfy the "Price"
Page 67 criterion, followed by the "Shipping" criterion These top three criteria carry the greatest weight for managers to decide which supplier meets the quality requirements and costs that fit the company's budget, while also having a delivery time that aligns with the production plan Following these are the criteria of "Service", "Payment", and "Brand" of the supplier
Using the correlation matrix to analyze the criteria, we establish a set of equivalent weights By calculating the average weights of these criteria and applying them to the initial weights, we derive a consistent vector that reflects the importance of each criterion.
Table 4.3 Consistent medium-weighted and vector tables
The analysis indicates that the "Quality" factor is the primary concern for businesses, with a weight of 0.3801, followed by "Price" and "Shipping" factors, which have weighted averages of 0.2674 and 0.1685, respectively These weights reflect the levels of interest businesses have in suppliers when sourcing materials Additionally, a consistency rate (CR) test was conducted on these weights, utilizing Lamdamax, CI, and RI indicators.
𝑛 − 1 = 0,016431458 Random index corresponding to factor R (n = 6): RI = 1,24
From there, we get a consistent ratio: CR = CI
Improving the professional efficiency of actual labor in production
Workers are the cornerstone of mass production, directly influencing product output; however, their high turnover rates, low seniority, and inconsistent skill levels pose significant challenges In the Southwest region of Vietnam, employee loyalty to companies is low, leading to frequent job changes, particularly among manual laborers, especially at year-end To maintain continuous production, factories must frequently recruit, often prioritizing quantity over quality, which adversely affects labor standards This ongoing cycle of recruitment and training not only incurs substantial costs and time but also disrupts workflow and complicates management efforts.
Improving the professional skills of employees directly in production
With the goal of improving and controlling the quality of skills, training plays a huge role However, in order for the training to achieve the best efficiency, when recruiting,
Page 73 employees must clearly understand the position they are applying for, their responsibilities when working, and at the same time firmly grasp the benefits they receive
To optimize personnel training and minimize costs, it is essential to accurately assess the quality of training subjects This assessment allows for the classification and development of a tailored training roadmap Key factors must be considered throughout the training process to ensure effectiveness and efficiency.
• Evaluating the input skills of human resources
• Classification of personnel groups according to job requirements and skills
• Route-based training for each group
• Maintain monthly labor skills assessments for quality control
Assessing the quality of input skills is crucial, as some personnel can become productive after just 1-2 training sessions, while others may require 4-5 sessions to develop adequately Early classification of workers enables managers to easily identify experienced and skilled individuals, allowing for their development into versatile employees capable of taking on multiple roles.
2 to 3 positions in the production process
The introduction of monthly labor skills assessments serves as an effective solution for directly monitoring workforce capabilities in production Tailored evaluation criteria will be established based on various job positions, ensuring that assessments are relevant and appropriate for each specific group.
To enhance the connection between labor and businesses, it is essential to focus on employee training, skill quality control, and support initiatives Implementing policies that prioritize employee well-being, establish fair overtime rates, and foster a positive work environment can significantly contribute to a stable production labor structure By promoting a culture of collaboration and experience-sharing among workers, businesses can create a more engaged and productive workforce.
Figure 4.4 Recommended HR training process
Source Compiled by author c Feasibility and expected results
Human resource training and development are essential for businesses to strengthen their market position Effective training equips employees with the necessary knowledge and skills, reducing errors and boosting productivity When implemented correctly, training enhances production efficiency by minimizing waste It also fosters employee potential, creating a pipeline for future leadership roles Utilizing an experienced in-house management team for training can be a cost-effective solution, while hiring external experts can provide additional professional insights when needed.
Page 75 face training program can be immediately applied to the real world Face-to-face training activities help strengthen the cohesion between managers and employees However, there are still limitations of employee training, such as not being able to completely solve the problem of human error Training can only minimize errors, not eliminate them completely Businesses need to invest in facilities, equipment and costs for lecturers.
Some solutions based on Overall Equipment Effectiveness of Assembly
factory in My Phong 1 a Assessment of the current situation
In the context of heightened global trade instability and intensified competition in the post-pandemic economy, Thai Binh Investment Joint Stock Company must enhance process efficiency and reassess production costs Currently, the application of the OEE (Overall Equipment Effectiveness) index within the WWW chain of the MP1 factory is ineffective, as the company lacks a proper OEE measurement system aligned with international standards This deficiency hampers the evaluation of machine efficiency and complicates data collection for maintenance Consequently, workers experience delays due to machinery repairs, and input material shortages arise from inaccurate initial planning Observations of the production line reveal numerous factors influencing this planning, but the OEE index can effectively quantify these through its three key components: product quality, availability, and performance efficiency.
The author observed discrepancies in both the quantity and quality of output products on the factory assembly line, which involves multiple machines including heel assembly, nose assembly, and vulcanizing machines Each machine plays a critical role in the production process, and any malfunction can disrupt subsequent operations, affecting overall efficiency and product quality.
Page 76 management of the production process, the management of machinery and equipment at the assembly line plays an extremely important role Common damages: thread breakage, nose dropping, needle breakage, deformed product, needle cylinder damage, cam deviation, conveyor belt deviation, push button failure, indicator light failure, machine unstable operation, machine sudden stop, heating and cooling element failure, fault sensor and some other errors The main reason comes from overloaded equipment operation and inadequate maintenance Although the assembly line plays an important role, the MP1 factory has not really fully evaluated the production capacity of the line as well as the development of the maintenance plan is not good enough, leading to unsatisfactory productivity compared to the plan Therefore, it is necessary to plan and apply OEE as soon as possible to improve production efficiency and assess the company's situation, thereby making adjustments and improving operations, in order to maximize profits and increase competitive position in the market b Data collection
Using initial data gathered from the Operation and Production department of the MP1 Factory, this article analyzes data from the Gssembly factory between January and May 2024 The author has synthesized the information based on essential criteria and developed an OEE spreadsheet tailored to the company's specific conditions using Excel Worksheet tools.
Table 4.19 Production data from 01/2024 - 05/2024 at the factory Assembly
Source Summary by the author
Table 4.20 Statistics on production time from 01/2024 - 05/2024 at the factory
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Table 4.21 Calculating Values and OEE
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Interpretation of OEE spreadsheet for 05/2024
Planned Production Time = (Number of days of the month - Total holidays) * 8 hours Actual Production Time = Planned Production Time – Downtime
RFT of Assembly Line and RFT of Sewing Line are the values provided by the Quality Department at the factory
Defect rate = (1 - RFT of Assembly Line) + (1 - RFT of Sewing Line)
Production Efficiency = Actual Production Total Output(+OT) / (Actual Production Time
Actual Production Total Output(-OT) = Production Efficiency * Actual Production Time Overall Equipment Effectiveness
Availability = (Actual production time * 100%)/(Planned production time)
Performance = (Actual Production Total Output(-OT))/(Planned Production Total Output) OEE = Availability * Quality * Performance
Interpretation of the meaning of OEE parameters for 05/2024
Avaiability = 80%: resources in terms of time are 80% utilized and the remaining 20% is downtime
Quality = 98%: out of every 100 pairs on the line, only 98 pairs are certified for quality, or for every 100 hours spent on production, 2 hours are wasted due to quality problems
Performance = 89%: actual production efficiency is 89% and the remaining 11% is lost time (Apply the same formula to the remaining months.)
Table 4.22 OEE Value Table at the Factory Assembly from 01/2024 -05/2024
Jan Feb Mar Apr May
Source Summary by the author
Figure 4.5 Chart of changes in OEE values at the factory Assembly from 01 - 05/2024
Source Summary by the author
• The OEE of Assembly factories is generally in the range of 68% - 73%, with an average of 71%, not catching up with international standards (85% or more)
OEE remained steady at 74% during the first two months of the year; however, it experienced a slight decline from March to May This decrease was attributed to a surge in orders following the Tet holiday, coupled with instability in workforce skills due to personnel changes after the holiday.
• The Availability rate remains at 80%, the responsiveness of machinery and equipment is relatively good, but there is still downtime many times in the production process
• The quality ratio is generally quite good and stable, keeping a value of 96% or more
• The performance rate remained at 89%, although the rate was quite good, but the frequent appearance of overtime indirectly affected the quality of direct labor
• The biggest impact on OEE can be seen due to the low availability rate
• Compared to international standards, most of the company's OEE parameters are not ideal
Table 4.23 Comparison of world OEE and OEE in May 2024 at the factory Assembly
Overall Equipment Effectiveness MP1 - TBS WORLD
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Figure 4.6 Comparison chart of world OEE and OEE in May 2024 at the factory
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To enhance the Overall Equipment Effectiveness (OEE) index, it is crucial to strategically optimize the factors of Availability and Performance This involves a concentrated effort on improving the capacity of machinery and equipment, as well as maximizing the production capabilities of the workshop Implementing targeted solutions will lead to significant improvements in OEE.
The Overall Capability Effectiveness Assessment (OEE) is determined by three key indicators: product quality, availability, and performance efficiency To enhance the overall OEE index, proposed solutions are developed with a focus on improving each of these three components, ensuring that high-quality outcomes serve as the foundation for overall effectiveness.
Improve the professional skills of the QA/QC team
Product quality is significantly influenced by various factors, with input materials being the most crucial High-quality input materials enhance workers' efficiency and lead to superior output products Therefore, enhancing the skills of the QA/QC team for input materials is essential Implementing order forecasting and establishing a robust input quality control and evaluation process, along with selecting suppliers using the AHP method, can effectively improve product quality metrics.
Improve the plan for maintenance of machinery and equipment
In modern assembly lines, machinery and equipment play a crucial role, yet issues such as damaged and halted machines can significantly hinder production capacity To combat this, a strategic maintenance plan that prioritizes equipment based on its importance is essential to minimize downtime and extend the lifespan of machinery Without a proper maintenance strategy, businesses may struggle to maintain product quality To enhance maintenance efforts, utilizing an ABC-Pareto chart can help identify the 20% of malfunctioning machines responsible for 80% of costs This analysis allows managers to make informed maintenance decisions or consider purchasing new equipment as a cost-effective solution However, acquiring new machinery involves substantial expenses and delays for transportation and installation Therefore, it is advisable to focus on a comprehensive maintenance plan before contemplating new machine purchases.
Table 4.24 Downtime at the line assembly 6 times from January - May 2024
STT Total Downtime (Unit: hour)
Machine Name Jan Feb Mar Apr May
Source Summary by the author
Table 4.25 Group devices by condition and importance
Classification of machine groups Downtime (Unit: hour)
Source Summary by the author
Figure 4.7 Chain Downtime Pareto Chart Assembly 6
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Based on the Pareto chart, we follow the 80/20 principle to divide the groups of machines and equipment that need maintenance:
Group A, consisting of machines numbered 1 to 5, constitutes over 73% of the factory's total machinery To minimize downtime and ensure smooth production activities, regular maintenance of these machines is crucial Prioritizing their upkeep will optimize business resources and reduce potential costs from malfunctions It is advisable to implement weekly monitoring and maintenance for this group to enhance operational efficiency.
Group B, consisting of machines numbered 6 to 7, experiences less downtime compared to the previous group However, it remains essential to prioritize monthly maintenance to ensure optimal performance and longevity.
Group C features Strobel sewing machines and nose retraction sewing machines, both known for their high durability Due to their frequent use, it's essential to evaluate their quality every two months to minimize downtime Regular monitoring by direct workers is crucial, and enhancing training for simple repairs can further improve machine maintenance and efficiency.
Improve the professional skills of direct managers at the production line - Line Managers
Managers serve as a vital link between the business and its employees, particularly in production environments like the MP1 factory The Line Manager, with their extensive experience and direct interaction with workers, plays a crucial role in understanding employee capabilities and building trust This relationship allows them to effectively communicate changes in production processes and orders, fostering a collaborative work environment Moreover, the Overall Equipment Effectiveness (OEE) performance index is significantly impacted by employee skills, and a Line Manager with strong professional expertise can enhance management practices and employee guidance, ultimately boosting production efficiency Therefore, investing in the professional development of Line Leaders is essential for the factory's and the business's success.
Enhancing professional training for Line Managers across all departments is crucial, particularly in mastering production technology and understanding Standard Operating Procedures (SOPs) By integrating their experience with advanced production knowledge, Line Managers can effectively grasp innovations in shoe manufacturing technology, positioning themselves as trainers and quality assurance leaders for employees This approach not only accelerates knowledge transfer and reduces labor training time but also optimizes costs for businesses Furthermore, additional training in labor allocation equips Line Managers with the necessary tools to make informed decisions based on both personal experience and data on worker productivity, leading to more accurate and effective labor allocation strategies.
Minimizing machinery and equipment losses significantly enhances production efficiency, boosts revenue, and supports the sustainable development of the company Investing in technological innovation and improving production capacity are key objectives for leadership To strengthen market competitiveness and enhance customer trust in product quality and order fulfillment, it is essential to optimize machinery usage while fostering a skilled, versatile, and dedicated management team These strategies collectively help reduce production costs and improve TBS's competitiveness in both domestic and international markets.
Through the opportunity to intern and conduct research for my graduation thesis titled