improving quality performance management at leo co ,ltd ninh khuong hand embroidery fashion

_ After sale service We have 3 main processes that base on the interaction of all departments gained the benefit for our company: production process, sale process, customer satisfaction

TRƯỜNG ĐẠI HỌC MỞ TP.HCM

HO CHI MINH CITY OPEN

UNIVERSITY

UNIVERSITÉ LIBRE DE BRUXELLES

SOLVAY BRUSSELS SCHOOL OF ECONOMICS & MANAGEMENT

MBQPM5

PHẠM THỊ XUÂN HỒNG

IMPROVING QUALITY PERFORMANCE MANAGEMENT

at LEO.Co.,Ltd _ NINH KHUONG Hand Embroidery Fashion

MASTER PROJECT

MASTER IN BUSINESS QUALITY AND PERFORMANCE MANAGEMENT

Ho Chi Minh City

(2016)

STATEMENT OF AUTHENTICATION

This statement is to indicate that all of the work in this final project has been done by Pham Thi Xuan Hong under guiding of Jacques Martin professor The information presented in below is accurate in my mind These are collected from

my knowledge that I understand from education program "Master Business Quality Performance Management" at Solvay Brussels School and the experience in my work at Ninh Khuong organization

I tried my best to finish my assignment and I hope this project will be implemented in my company And the last, in order to optimize the results, I need recommendation of the Judges for my project better

Thank you so much!

Signature of student

Pham Thi Xuan Hong

Besides, if don't have the supporting of my boss, my staffs and my family also,

I couldn't do that I acknowledge with big thanks to them

The last, in my presentation time, the attention and recommendation of the judge will be helped me optimize the results final report and implementation behind I'm truly grateful for discussing today, thanks for your value advices

ACADEMIC TUTOR’S COMMENTS

Signature of Academic tutor

PRACTICAL TUTOR’S COMMENTS

Signature of Practical tutor

TABLE OF CONTENTS:

STATEMENT OF AUTHENTICATION 1

ACKNOWLEDGEMENT 2

ACADEMIC TUTOR’S COMMENTS 3

PRACTICAL TUTOR’S COMMENTS 4

INTRODUCTION: 1

1 Company information: 1

2 Objectives of the report 7

3 Methodology: 7

4 The company’s development plan”: 8

PART 1: ANALYSIS AND EVALUATION OF THE KEY PROCESSES 9

Chapter 1: Process mapping & identify the critical points of each process 9

1 The Process mapping of the Ninh Khuong organization: 9

2 Identify the critical points of key processes: 13

2 1 Production process mapping and critical points: 13

2.2 The Sales process mapping and critical points: 15

2.3 The customer satisfaction process mapping and critical points: 17

Chapter 2: Process evaluation 19

1 Identify the factors affected on each key process  conclusion the main factors affected on three key processes 19

1.1 The factors affected on critical points of production process: 20

1.2 The factors affected on critical points of Sale Process: 22

1.3 The factors affected on critical points of Customer satisfaction process: 24

2 Analysis the root cause/RISK of main factors above by Fishbone diagram 27

3 Evaluation effectiveness key process by data and dashboard 29

3.1 Data and dashboard: 29

3.2 Shortcomings: 33

PART 2: IMPROVING QUALITY PERFORMANCE MANAGEMENT SYSTEM: 34 Chapter 1: Building the Quality Performance Management System (PMS) at Ninh Khuong organization: 34

1 Identify the type of performance at Ninh Khuong organization 34

organization 35

company: 35 2.2 Step 2: Set Planning: Strategic goals in roadmap, main objectives and link them together to reach score strategy and company goals 37 2.3 Step 3: Set targets for each objective, measurement method and re- coordinate resources for activities to achieve targets and action to implement to achieve objectives: 43

coordinate the human resources to achieve the objectives company 46 Chapter 2: Implementation and improving Quality Performance Management system 47

1 The road map implementation and improvement Performance Management System at Ninh Khuong organization 47

2 Improving quality performance management system at Ninh Khuong 48

3 Sustained improvement quality performance management: 50 CONCLUSION: 54 REFERENCE LIST 56

INTRODUCTION:

1 Company information:

New Logo:

Slogan: Embroidery love for life

Business type: Manufacturing, trade, service about hand-embroidered

children's fashion industry

Founder: Mr Duong Hoan Tuyen (MSc)

Human resources: 150 employees

Vision:

– Commit to a sustainable development

– 2020, become the leading brand in the embroidery fashion industry in Asia

– 2030, Ninh Khuong products will be presented all over the world

Mission:

– Produce the high quality embroidery fashion products: healthy for the consumer; the product is not harmful to the environment

– Improving the best customer service for customer's satisfaction

– Enrich employee knowledge & prosperity

History’s company:

– Ninh Khuong has been boldly exploring the application of the hand embroidery art into the daily life in order to make the children’s fashion products, household items, decorative items, etc as well as contributing

to the wider promotion of this unique art form of the nation, creating a magical interference between Eastern and Western culture

– Ninh Khuong was established in 2001 at 40 Le Loi, District 1, Ho Chi Minh City and has moved to 42 Le Loi, District 1 as in current The company mostly sells the accessories cotton for home decor, such as: table clothes, runner, graph, many kinds of bag, tissues box cover, paper roll,… to foreigners customer and tourists

– In 2003, Ninh Khuong started expanding domestic brand through retail’s stores by children’s clothes, focus to European and Asian markets by exporting

– Since 2009, Ninh Khuong has built Quality management system for development

– 2013, has been become the Number one in Viet Nam in the field kid fashion embroidery with 21 stores in Viet Nam

– 2014, received ISO 9001-2008 Certification

– 2015, opened 6 stores in Ho Chi Minh City and Da Nang City

– Now, Ninh Khuong has 17 stores in Ho Chi Minh City and many provinces in Viet Nam, exporting to European area

Feature product: Unit product

– Core value of product: Hand embroidery, traditional cultural value of the hand-embroidery pattern

– Materials & other materials: 100% cotton, linen; natural color

– Threads: 100% cotton, dyed with natural color without chemicals

– Utilities: good sweat absorbent, soft for the skin, luxurious model, high quality (no shrinkage, fabric color no down)

Ninh Khuong has 3 brand products (3 line products):

– Nkid: kid fashions, kid bedding & accessories: dress, T-shirt, pant,

hat,…)

– Kolala: premium kid fashions

– Klinen: accessories for home decor: tablecloth, napkin, bed sheet, duvet

cover, pillowcase, tissues box cover, bread cover, bags, souvenir,…

Products of Nkid brand:

Products of Klinen brand:

Target customers:

– Vietnamese female, officer from 25 to 45 years old; knowledge, mostly

in middle and high class (Family income ≥1000 USD/month)

– Foreigner: Tourists from all over the world such as: Japan, Australia, France, America, New Zealand, etc

– Abroad partners: Australian, American, French, Malaysian, Singaporean, etc

The competitors:

Replacement (Indirect competitors)

Kid fashion:

Outside, at home, warm clothing

Kid fashion:

Party/Outside

Casual, comfortable wear, smart wear

Casual, comfortable wear, smart wear

outside/ at home, warm clothing

Quality High quality

Same as Ninh Khuong Brand longer

Same as Ninh

Same quality Brand longer

Medium

Type of Industry Total hand

embroidery

Hand embroidery &

by machine

Hand embroidery in

USP (Unique

Selling

Proposition)

_ Truly hand embroidery

Party dresses Twin design for mother and kid

Imported products Good design High quality material

Imported product Various design

-Anti-bacteria cotton

-Cute Kitty symbol

on the products -Brand from Japan

Ninh Khuong is the number one in embroidery children's fashion industry in Viet Nam

– We have the competitive advantage in the quantity of chain stores and have good location of stores also

Organization chart:

The Ninh Khuong company has three big departments:

 Manufactory: produce the products Manage the out-sourcing stages (embroidery, sewing, laundry), not management the production workers

 Chain stores: selling directly to customers and implement customer care operations

 Back office: supporting everything for all departments

The method of management at Ninh Khuong of company is management by objectives (MBO) and management by processes (MBP) Interactive vertically and horizontally are the interaction between of all departments in organization This method makes the interaction is tight, increasing control and the system reach the self-control better, help to reduce time and cost of management

2 Objectives of the report

- Continuous improvement the quality performance system (QMS) after 5 years in building QMS To get internal benefits for organization and people

To get external benefits for the customer (best price of products, good service, value of products added, peace of mind also, the healthy for baby,…) and society

- Sustainable success in the future and could be reached the mission, vision in

2030

- Maintain ISO 9001-2008 certification in the company

3 Methodology:

- In the current context, the first, we improve Economic Performance: that’s

mean focus on turnover/sales and profit, profitability/return on investment

indicators and then focus on targets social to maximize profit by classical

approach performance

- We measure effectiveness and efficiency of performance key activities of organization such as: production, process, motivation HR, service, operation

- And then, in order 2030 we’ll be presented in over the word and sustainable development performance we improve Global performance: focus on

strategic, environmental, organizational, human, finance to improve

sustainable development by Modern approach

- Modern approaches tend to reinforce rather than weaken the traditional approaches to management (Mullins, 2005) For instance, the scientific

method focuses on efficiency of production processes, the motivation of the employees through the offering of performance based pay and the observance

of strict principles This view is reinforced by the modern approach to strategic management which emphasizes the importance of focusing on

internal processes in order to remain competitive in the increasingly competitive business environment (Sheldrake, 2003).” (Reference

management.html )

http://expertresearchers.blogspot.com/2014/01/how-modern-approaches-to-4 The company’s development plan”:

- Now - up to 2020: we will improve Economic performance

Build the quality management system on standard ISO 9001– 2008  and then set standards quality performance for company and all departments

in order to increasing the performance each individual and department to reached control the system, everything and every process will be measured and controlled the performance in order to reduce the time and the cost of

operation management

Standardized quality management system at LEO in 2016: overcoming the inconsistencies, building the missing quality requirements; training for all top manager about the quality management system knowledge for implementing and maintenance QMS; regular evaluation, management review and improvement performance

- From 2020 – 2030: improve Global performance

PART 1: ANALYSIS AND EVALUATION OF THE KEY PROCESSES Chapter 1: Process mapping & identify the critical points of each process

1 The Process mapping of the Ninh Khuong organization:

Explain Ninh Khuong’s process mapping:

The input: customer expectations/requirements

The output: customer satisfactions

After the factory receive the input customer requirements data and idea of new product from R & D department, the manufactory department analysis warehouse data and then make forecast planning production The next step, the factory design product according to customer requirements; select supplier providing raw materials (fabrics cotton); making sample product to browse and then outsourcing suppliers (sewing, hand embroidery and laundry) to finish the products After next 2 – 3 months, the manufactory will receive the orders, manufactory conducting product quality inspection of suppliers, calculate costs and selling price, make barcode and delivery for all stores

Marketing department PR the new products one month ago when finished product and launching new products to the all shop of sale departments to selling And then, Sale department and Marketing department must to follow up and measure to control new collection during 12 months by promotion program, customer care, training selling, display product and collect customer feedback to improve& develop product

Primary process, beside the main departments above (R&D, Production,

Marketing, Sale), need some support departments also such as HR, engineering, finance, account departments to finish the process of company

Summary: Ninh Khuong process mapping includes procedures bellow to

understand requirements of customers and how to satisfy customer requirements

 Management Process: Strategy, Policy and Tools/Method process

 Four main process: deployment of production - trade and services

P.1/ R&D process:

- Idea and design the new product

- Making sample process

P.2/ Production process:

- Purchasing raw material

- Outsourcing sewing & hand embroidery process

- Product finishing process

P.3/ Product launching process:

P.3.1 PR product & promotion plan

- Sales training

- Check & control lifecycle product

P.4/ Selling process:

P.4.1 Direct marketing to customer

- Check & training selling

- Selling & customer service & feedback

 Supporting process: Human resource process; Finance process; Design process; IT process; Accounting process; Quality process

The responsibility of main departments relevant to the process mapping of LEO_Ninh Khuong organization:

_ Producing: outsourcing sewing & embroidery Buy product finished

_ Control warehouse

_ Suppliers selection

_ Suppliers performance management

_ Supplier conferences

_ Delivery to contributors/retail stores

_ Quality control products

_ PR the products

_ Make promotion planning

_ Customer service management

_ Manage product lifecycle (12 months)

_ Selling

_ Sales forecasts: revenue, goods, stock,…;

_ Evaluate product _ Collect feedback data of customers

_ Make to orders for manufacturing

_ Delivery to customers _ Engineering/ software _ Statistic, analysis of goods sold send to manufacturing _ After sale service

We have 3 main processes that base on the interaction of all departments gained the benefit for our company:

production process, sale process, customer satisfaction process:

2 Identify the critical points of key processes:

2 1 Production process mapping and critical points:

The PRODUCTION PROCESS of Ninh Khuong organization:

Control products are not suitable

Monitoring - measurement products

Import - Export

- preserved products

Recognize product

POLICY - QUALITY OBJECTIVES

RESPONSIBILITY – COMPETENCE, RESOURCE MANAGEMENT, INTERNAL INFORMATION, DOCUMENT CONTROL

PLANNING QUALITY MANAGEMENT

control production measurement equipment

Import - Export

- preserved products

Control products are not suitable

Monitoring - measurement products

Laundry

(out sourcing)

The critical points of production process: Base on the customer expectations

of this process:

o Customer will receive the quality product with the best price

o Diversified products, good design, fashion, bright colors, quality of material good for health

o The customer satisfaction about quality product

So the critical points of the production process:

o The rate of customer complaint about the product and service (design, price, quality, color,…)

o The rate of customer to return the product

o The rate of product defect

o Product finished on time (delivery to sale department or customer on time)

1.2 The Sales process mapping and critical points:

No

Yes

The critical points of sale process: Base on the customer expectations of this

process to reach target the revenue of the company:

o Reached the 100% revenue target

o The revenue, the rate of customer complaint,… all of them are measured

o The customer will receive the information of new product and promotion program on time (effectiveness of PR activities)

o The customer satisfaction about quality service and product

Production plan

PR production

Prepare Selling (Selling plan)

Selling direct to customers

Check – control and measure the selling

Record feedback of customers

Report and suggest solutions Approve

So the critical points of the sale process:

o The rate of customer complaint about the product and service (design, price, quality, color,…)

o The rate of customer comeback for buying product

o Delivery on time

1.3 The customer satisfaction process mapping and critical points:

No Yes

Repair & welcome the customers

Consulting products (quality, promotion)

The customer decide buy product

Thanks customer-continuous consulting the others

Guiding the cashier

The critical points of customer satisfaction process: Base on the customer expectations of this process:

o Receive the good service

o Receive the good consultants for the product comfortable that they need

o The low price and good promotion for them

So the critical points of customer satisfaction process:

o Man power: the sale man understand product features, understand the process satisfy customer, they know how to display products and how to sale or consulting each product impossible to customer requirements

o The rate of customer complaint about the service

o The rate of customer to be recorded the information in the software (CRM)

o Delivery on time

Summary the critical points of three processes above (production process, sale process, customer satisfaction process) are:

 Understanding customer requirements

 The customer satisfaction about product and service

 The product: good quality, best price, quantity, delivery on time

 The rate of defect product lowest

 The man power: understand product features, process selling and service, good competencies,

 Operate management: good interaction of all departments, operate quality management system, software support, measurement tools, management review,…

Chapter 2: Process evaluation

factors affected on three key processes

Base on the critical points, we found some factors affected on critical points

of three key processes:

(1) Survey reports: Survey of customer requirements, information’s the

market & competitors,…

(2) Suppliers/Partners capacity: Material, outsourcing partner, production

technology,…

(3) Human resource of department capacity of company: Sale man, designer,

Marketing staffs, production staffs, Top managers, customer staffs

(4) Method management: The PMS, QMS, training program, measurement

tool, control system, management review, policy,…

(5) Software: Lack of collection data auto, measurement auto: CRM, ERP,… (6) Finance

(7) The others

1.1 The factors affected on critical points of production process:

Code The factors affected on critical points of three

key processes

Number of errors/

year

Cumulative frequency

Cumulative percent

(3)

HR of department capacity (company): Sale

man, designer, Marketing staffs, production

staffs, Top managers, customer staffs)

(4)

Method management (The PMS, QMS, training

program, measurement tool, control system,

management review, policy, processes,…)

(1)

Survey reports (Survey of customer

requirements, information’s the market &

Base on Pareto chart, we find 20% factors cause over 80% errors on production process: HR of department capacity, supplier capacity and method management of company

1.2 The factors affected on critical points of Sale Process:

Code The factors affected on critical points of three key

processes

Number of errors/

year

Cumulative frequency

Cumulative percent

(3)

HR of department capacity (company): Sale

man, designer, Marketing staffs, production

staffs, Top managers, customer staffs)

(4)

Method management (The PMS, QMS, training

program, measurement tool, control system,

management review, policy, processes,…)

(1)

Survey reports (Survey of customer

requirements, information’s the market &

competitors,…)

(2)

Suppliers/ Partner capacity (Material,

outsourcing partner, production technology,

Base on Pareto chart, we find 20% factors cause over 80% errors on sale process: HR of department capacity and method management of company

1.3 The factors affected on critical points of Customer satisfaction

Cumulative percent

(1)

Survey reports (Survey of customer

requirements, information’s the market &

competitors,…)

(4)

Method management (The PMS, QMS, training

program, measurement tool, control system,

management review, policy, processes,…)

(3)

HR of department capacity (company): Sale

man, designer, Marketing staffs, production

staffs, Top managers, customer staffs)

(2)

Suppliers/ Partner capacity (Material,

outsourcing partner, production technology,