Improving the efficiency of quality management system ISO 9001 2015 in habeco breweries

I also sincerely thank all leaders, managers, employees in Hanoi Beer Alcohol Beverage Joint Stock Corporation, Habeco member companies, especially my ISO department colleagues for all k

KHOA QUẢN TRỊ VÀ KINH DOANH

-

DƯƠNG THỊ VIỆT NGA

IMPROVING THE EFFICIENCY OF QUALITY MANAGEMENT

SYSTEM ISO 9001:2015 IN HABECO BREWERIES

NÂNG CAO HIỆU QUẢ CỦA HỆ THỐNG QUẢN LÝ CHẤT LƯỢNG ISO 9001:2015

Ở CÁC CÔNG TY SẢN XUẤT BIA THUỘC HABECO

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2019

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

DƯƠNG THỊ VIỆT NGA

IMPROVING THE EFFICIENCY OF QUALITY MANAGEMENT

SYSTEM ISO 9001:2015 IN HABECO BREWERIES

NÂNG CAO HIỆU QUẢ CỦA HỆ THỐNG QUẢN LÝ CHẤT LƯỢNG ISO 9001:2015

Ở CÁC CÔNG TY SẢN XUẤT BIA THUỘC HABECO

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS TRẦN HUY PHƯƠNG

HÀ NỘI - 2019

DECLARATION

The author confirms that the research outcome in the thesis is the result of author’s independent work during study and research period and it is not yet published in other’s research and article

The other’s research result and documentation (extraction, table, figure, formula, and other document) used in the thesis are cited properly and the permission (if required) is given

The author is responsible in front of the Thesis Assessment Committee, Hanoi School of Business and Management, and the laws for above-mentioned declaration

Date………

Author

Duong Thi Viet Nga

ACKNOWLEDGEMENT

First of all, I would like to thank HSB leaders, teachers, staffs who gave me many useful helps throughout my graduate studies and graduation thesis In particular, I would like to express my special thanks to Dr Tran Huy Phuong for his valuable guidance, scholarly inputs and consistent encouragement throughout the implementation of my thesis research

I also sincerely thank all leaders, managers, employees in Hanoi Beer Alcohol Beverage Joint Stock Corporation, Habeco member companies, especially my ISO department colleagues for all kindly helps in providing information, creating conditions and spending their precious time for me to complete my research work

Furthermore, completion of my master thesis was possible with the constant support

of my ISO specialists, especially Mr Mai Huu Tuyen, for their practical advices and comments at any time I need helps I would like to express my sincere gratitude to all of them

Finally, I would like to give my thanks and love to my parents, husband and children for their love, support and sacrifices during my study and doing my master thesis

With the help from many sides, I have made great efforts to complete the thesis on time and in the best way However, due to limitations in information and knowledge, my thesis could not avoid some shortcomings Therefore, I am very grateful to receive the sympathy, contributions from my teachers and HSB science council to make my master thesis become better

CONTENT

ABBREVIATIONS i

LIST OF FIGURES ii

LIST OF TABLES iii

TITLE CHAPTER 1

CHAPTER 1: THEORETICAL BACKGROUND ON IMPROVEMENT OF THE EFFICIENCY OF QUALITY MANAGEMENT SYSTEM ISO 9001:2015 6

1.1 Concepts of ISO systems and ISO 9001:2015 6

1.1.1 Overview of ISO systems 6

1.1.2 Principles of 9001:2015 ISO system 8

1.1.3 Expected benefits of ISO 9001:2015 system 17

1.2 Efficiency of applying ISO 9001:2015 in enterprises 18

1.2.1 Definition of efficiency 18

1.2.2 Criteria to measure the efficiency of ISO 9001:2015 system 18

1.2.3 Factors influencing the efficiency of ISO 9001: 2015 system 20

CHAPTER 2: THE REAL SITUATION OF ISO 9001:2015 SYSTEMS IN SOME HABECO BREWERIES 24

2.1 Introduction of Habeco Corporation 24

2.1.1 History of Habeco Corporation 24

2.1.2 Vision and mission of Habeco Corporation 25

2.1.3 Habeco product introduction 26

2.2 Evaluation of the ISO 9001:2015 efficiency in Habeco breweries 27

2.2.1 The context of Habeco head quarter and its breweries 27

2.2.2 The real situation of applying ISO 9001: 2015 in some Habeco breweries 29

2.2.3 Evaluation of factors affecting ISO 9001 performance 41

CHAPTER 3: SOLUTIONS FOR IMPROVING THE EFFICIENCY OF ISO 9001 IN HABECO BREWERIES 50

3.1 Habeco’s future directions for development 50

3.2 Solutions for improving the efficiency of ISO 9001:2015 in Habeco group 50

3.2.1 Organization of training courses for Habeco group 51

3.2.2 Establishment of a common ISO 9001:2015 system for Habeco Corporation 53

3.2.3 Establishment of a software to control Habeco ISO 9001:2015 system 60

CONCLUSIONS 66

REFERENCES 67

APPENDICES 72

APPENDIX 1 72

APPENDIX 2 73

APPENDIX 3 77

APPENDIX 4 78

APPENDIX 5 79

APPENDIX 6 81

ABBREVIATIONS

1 ISO International Organization for Standardization

2 Habeco Hanoi Beer Alcohol Beverage Joint Stock Corporation

5 HHT Hanoi – Hoanghoatham Brewery

7 HQ Habeco Headquarter + Hanoi – Hoanghoatham Brewery +

Hanoi – Melinh Brewery

8 KB Hanoi - Kimbai Beer Joint Stock Company

9 TB Hanoi - Thaibinh Beer Joint Stock Company

10 HHP Habeco Haiphong Beer Joint Stock Company

11 ID Hanoi Beer - Alcohol - Beverage Investment and

Development Joint Stock Company

12 NA Hanoi - Nghean Beer Joint Stock Company

13 QB Hanoi - Quangbinh Beer Joint Stock Company

14 QT Hanoi - Quangtri Beer Joint Stock Company

15 ND Hanoi - Namdinh Beer Joint Stock Company

16 TH Thanhhoa Beer Joint Stock Company

17 HP Hanoi - Haiphong Beer Joint Stock Company

18 HH Hanoi - Hongha Beer Joint Stock Company

19 HD Hanoi - Haiduong Beer Joint Stock Company

20 T89 Trading 89 Beer Joint Stock Company

23 QMR Quality Management Representative

LIST OF FIGURES

Figure 1.1: Representation of the structure of ISO 9001:2015 in the PDCA cycle 14

Figure 1.2: QMS 9001:2015 levels of documentation 15

Figure 2.1: Labor productivity in Habeco groups 31

Figure 2.2: Number of customer complaints on canned and bottled beers 32

Figure 2.3: Comparison of returned product ratios in Habeco companies 33

Figure 2.4: Assessment of satisfaction in ISO 9001 application 34

Figure 2.5: ISO system structures in Habeco group 35

Figure 2.6: The use of outdated documents in Habeco members 36

Figure 2.7: Time for giving out solutions for non-conformities and prevention actions 38

Figure 2.8: Documented non-conformities in Habeco group 39

Figure 2.9: Types of documented non-conformities in Habeco Head quarter 40

Figure 2.10: The general evaluation of ISO 9001 efficiency in Habeco group 41

Figure 2.11: Driving force to get ISO 9001 42

Figure 2.12: Top management commitment evaluation in Habeco group 43

Figure 2.13: Evaluation of documents relating on customer focus 44

Figure 2.14: Evaluation of context understanding in member companies 44

Figure 2.15: Continuous improvements in Habeco group 46

Figure 2.16: Internal auditor composition in Habeco group 48

Figure 3.1: Five-layer ISO structure 54

Figure 3.2: User decentralization in Habeco group 61

Figure 3.3: Management of changes in ISO documents 63

Figure 3.4: Suggested new procedure to make non- conformity and prevention report 65

LIST OF TABLES

Table 1.1: PDCA application in ISO 9001 12

Table 1.2: Risk matrix based on ISO 31010 (ISO 31010, 2009) 14

Table 1.3: The differences between ISO 9001:2015 to ISO 9001:2008 16

Table 2.1: ISO standards in Habeco member companies 28

Table 2.2: Time needed for giving out solutions for preventive actions 37

Table 2.3: Time needed for giving out solutions for non-conformities 38

Table 2.4: Consultants of ISO 9001 in Habeco group 46

Table 3.1: Steps for improving the efficiency of ISO 9001:2015 in Habeco groups 51

Table 3.2: Abbreviations of documents and method of usages 54

Table 3.3: Amendments of head quarter ISO documents 55

Table 3.4: Abbreviations of compilation breweries/companies/departments in Habeco group 57

Table 3.5: Document issuance in Habeco head quarter 58

Table 3.6: Document issuance in Hanoi – Melinh and Hoanghoatham Breweries 58

Table 3.7: Document issuance in member companies 59

Table 3.8: Internal auditor groups 60

Table 3.9: Functions of departments in head quarter, breweries and companies 62

TITLE CHAPTER Name of the thesis in Vietnamese: ―Nâng cao hiệu quả của hệ thống quản lý chất lượng

ISO 9001:2015 ở các công ty sản xuất bia thuộc HABECO‖

Name of the thesis in English: ―Improving the Efficiency of Quality Management System

ISO 9001:2015 in Habeco Breweries‖

1 Rationale

Hanoi Beer Alcohol Beverage Joint Stock Corporation (Habeco) is the third largest beer company in Vietnam Being fully aware of the important role of ISO 9001 in production and business, the head quarter has developed and applied the quality management system ISO 9001 since January 2002 This can be considered as an "entry visa" for the company's products to penetrate, affirm its position in the market However, Habeco currently has approximately 13 member companies, producing a variety of products like Bia Hoi Ha Noi (draught beer), bottle and can beers Each company has built its own ISO 9001 system suitable for its company Of all 13 companies, 10 companies have being applied ISO 9001 both version 9001:2008 and 9001:2015; 2 companies applied ISO 9001 but did not get certificate, 1 company obtained ISO 9001 certification in 2012 but did not go through surveillance and recertification audits

It is stated that getting an ISO certificate is not a difficult task, but maintaining and promoting the effect, its efficiency are very difficult It is more and more difficult to integrate 13 ISO 9001 systems into head quarter to better the quality management of the same products It requires a lot of effort from all members of not only Habeco head quarter but also every member companies Belows are some drawbacks of the ISO 9001 systems

of member companies:

 Diversified ISO system structures due to differences in hiring consultant and

certification companies: The 4 level system (Handbook – Procedures – Operational

Documents – Records) is currently used in Habeco head quarter and some member companies However, some others have built systems with the integrated level 2 and 3 documents The unsimilarity in ISO systems make it difficult for the ISO department in Habeco head quarter to control and integrate all separated systems

 Different ways of ISO 9001 contruction causes the use of outdated documents:

Some companies in Habeco group considered Habeco issued documents as external documents that they have to follow Some have converted these documents into their internal documents by rewriting and adding some small changes This leads to

chances of using out of date information because of untimely modification when the head quarter make amendment or renewal of documents

 Different organization context, leaders and leadership commitment and unequal

level of ISO staffs and internal auditors: Based on its own context, the company

should determine, monitor and regularly review external and internal issues that are relevant to its purposes and its strategic directions, affecting its ability to achieve the intended results of its quality management systems The leaders of the company and the ISO training programs play an important role in leadership commitment and the qualifications of internal auditors, respectively It is the fact that higher leadership commitment and higher qualifications of auditors lead to higher efficiency of the ISO system Most of the member companies are lack of education

on the role of applying ISO systems in management Therefore, some leaders, ISO staffs and internal auditors attach less importance to it, they even consider ISO as the adornments of their companies

 Difficulty and waste of time to solve unconformable raw materials and products:

When finding unsatisfied goods from nominated suppliers or having conformities in processing, member companies should report to the head quarter However, due to lack of specific procedures, this process can take long time so that some companies handled by themselves, even skipped It might result in the risks of miscontrol of the product quality and loss of Habeco market share

non-For purposes of contributing to the maintenance and enhancement of the efficiency

of the ISO 9001:2015, I chose the topic: "Improving the Efficiency of Quality Management

System ISO 9001:2015 in Habeco Breweries”

2 Literature review

Promas (2010) studied the factors that influence the effective implementation of ISO

9001 in small and medium service companies The purpose of this study is to investigate the critical factors for the effective implementation of the ISO 9001 standard in small and medium enterprises (SMEs) operating in the services sector The author used primary data obtained by a questionnaire survey attentive to the managers who are responsible for quality in each of the 93 ISO 9001:2000-certified service companies in Greece Individual critical factors for ISO 9001:2000 implementation are assessed for importance by simple descriptive statistics (Sampaio et al., 2009) Furthermore, exploratory factor analysis is then applied to refine these individual critical factors into five latent constructs (Fotopoulos

et al., 2009) All of the individual critical factors examined in the study are assessed with regard to their contribution to ISO 9001 efficiency The five latent constructs of the underlying structure of these critical factors are (in descending order of importance):

―internal motivation of company‖; ―attributes of company‖; ―employee attributes‖;

―requirements of the quality system‖; and ―attributes of the external environment‖ These findings were similarity with the study of Williams (2004) and Magd (2006) who studied the manufacturing companies This study provides practical guidance for SME service companies that wish to implement the ISO 9001:2008 standard effectively by focusing its effort on these 5 latent factors that impact efficiency Despite its important findings, the limitation of the study lies in its small sample size of SMEs Future research could utilize

a broader sample of private SME service companies

Zeng (2007) tried to explore barriers in the implementation of ISO 9001 in China, and identify how to overcome these barriers By using a structural questionnaire survey, the author highlighted the problems in implementing the standard, which determines the sustainable implementation, including: short-sighted goal for ―getting certified‖; over-expectation on the ISO 9001 standard; mandatory requirement (not wholehearted commitment) in some industries; and following others (the trend) in certification With regard to the effective audit of the ISO 9001 standard which plays an important for sustainable implementation of the ISO 9001 standard (Rajendran and Devadasan, 2005), the main problems were explored, including: lack of commitment from some certifying bodies; excessive competition between certifying bodies; and offering of a total packaged service from consultancy to certification by certifying bodies

Mc Adam (2002) assessed the body of knowledge relating to ISO 9000 and Total Quality Management (TQM) interrelationships, with specific reference to the UK and Irish brewing sector The author decided to use sectoral study method (Remenyl et al., 1998) for further investigation of the ISO-TQM continuum Based on data obtained by a questionnaire survey of the 90 leading UK and Irish brewing companies, the research indicated that ISO may be used as a foundation on which to develop TQM ISO has mixed success as a continuous improvement approach, with its bureaucratic nature being considered restrictive Furthermore, ISO was found as having a limited impact on customer satisfaction, while this was one of the key benefits of TQM The implementation of customer satisfaction measures was found to be a major differentiating factor for ISO and TQM; relatively few ISO-only companies had adopted such measures However, the study

is limited by the small size of the UK and Irist brewing companies Future research could utilize a broader sample of other breweries all over the world, especially breweries in large corporation

Although these topics have pointed barriers to the poor performance and indicated ways to improve the efficiency of the ISO 9001 system, researches were done in small and medium-sized service businesses, in breweries in the UK and Irish They were also limited

to one or some individual businesses However, there is no study on the ISO system for a

beer corporation like Habeco Therefore, the author found the topic "Improving the

Efficiency of Quality Management System ISO 9001:2015 in Habeco Breweries ” is a new

one and is not duplicated with other research topics which have been done before

3 Aims of research

The purpose of this study is finding the best ways to improve the efficiency of quality management system ISO 9001:2015 for Habeco breweries This will contribute to the maintenance and enhancement of the efficiency of the ISO 9001:2015, resulting in the increase of Hanoi beer quality for the customers

in-internal audits were also made in all breweries in order to get the overall picture of ISO 9001 implementation in all member companies

 The secondary data: Periodical and annual reports on non-conformities of raw materials, by-products and products, data on labor productivity and product quality were taken from ISO Department, Human Resource Department and Quality Management Department of Habeco head quarter and member companies

7 Thesis structure

In addition to the title chapter, conclusion, references, appendices; The content of the thesis is divided into three main chapters:

 Chapter 1: Literature reviews on improvement of the efficiency of ISO 9001 system

 Chapter 2: The real situation of ISO 9001:2015 systems in some Habeco breweries

 Chapter 3: Future directions for improving the efficiency of ISO 9001 in Habeco breweries

CHAPTER 1: THEORETICAL BACKGROUND ON IMPROVEMENT OF THE EFFICIENCY OF QUALITY MANAGEMENT SYSTEM ISO 9001:2015 1.1 Concepts of ISO systems and ISO 9001:2015

1.1.1 Overview of ISO systems

The International Organization for Standardization (ISO) is an international setting body founded on 23 February 1947 to promote the development of international manufacturing, trade, and communication standards The ISO story began in 1946 when delegates from 25 countries met at the Institute of Civil Engineers in London and decided

standard-to create a new international organization ―standard-to facilitate the international coordination and unification of industrial standards‖ Because the 'International Organization for Standardization' would have different acronyms in different languages (IOS in English, OIN in French for Organisation Internationale de Normalisation), its founders decided to give it the short form ISO which is derived from the Greek ―ISOS‖ meaning ―equal‖ The work of preparing International Standards is normally carried out through more than 250 ISO technical committees ISO members can choose whether they want to be part

of a particular technical committee, and their (Cascio, 1996) Normally, the development

of an international standard is a multi-stage process: Proposal – Preparatory – Committee – Enquiry – Approval – Publication

Until now, ISO has published over 22,208 International Standards covering almost all aspects of technology and manufacturing (ISO, 2018) Therefore, it takes time to find and understand which ones are the most suitable for our business While some are industry-specific, many of the most popular standards are generic and can be implemented into an organization no matter what sector it is in Below are some most popular standards

1.1.1.1.ISO 9000

It is the most popular standard that can be applied in any organization in any sector There are fourteen members in a family of quality management standards It was first published in 1987, last in 2015, and has been updated about every 7 years Nowadays, ISO 9001:2015 is the only one that can be certified to (ISO 9000) Over 1,100,000 ISO certifications have been given out in over 170 countries (Charlet, 2017)

The standard details how to put a Quality Management System (QMS) in place to better prepare your organization to produce quality products and services It is customer focused, and places an emphasis on continuous improvement, risk management and top management processes that extended throughout the organization

The ISO 9000 is now made up of three main standards It is highly recommended to use ISO 9000 to become familiar with the fundamental concepts, principles and normative vocabulary of a quality management system before adopting ISO 9001 to achieve an effective level of performance The practices described in ISO 9004 may then be implemented to make your quality management system more efficient in achieving your business goals and objectives

1.1.1.2 ISO 14000

It is a family of standards relating to the environment, similar to ISO 9000 ISO 14001:2015 is the most popular in the family, and is the only one in which an organization can be certified (ISO 14000) It establishes requirements for an Environmental Management System (EMS) and is based on the continuous improvement model PDCA (Plan-Do-Check-Act)

Although it is a voluntary standard, put in place by companies who want to improve their processes, it is now very popular, with nearly 350,000 certifications in 171 countries worldwide (Charlet, 2017)

1.1.1.3 ISO 22000

It is focused on the development and implementation of a food safety management system, and is a requirement for any organization that works in the food chain With multiple standards including 22001 for food and drink, 22002 for food manufacturing, and more, this family is used in a variety of organizations directly or indirectly involved with food such as restaurants, food manufacturers, food transportation services (ISO 22000)

It can be applied on its own or integrated with ISO 9001 Over 32,000 ISO 22000 certifications has been given out all over the world (Charlet, 2017)

1.1.1.4 ISO 50001

One of the newest standards which is Released in 2011, the energy standard ISO 50001:2011 is nevertheless becoming increasingly important (ISO 50001) It is meant for companies to put in place an Energy Management System (EnMS) dedicated to improving energy usage and efficiency This includes reducing an organization’s energy footprint by reducing greenhouse gas emissions as well as energy cost

Although it is not required, but with over 20,000 certifications and a 69% certification increase in 2016 compared to 2015, it is clear that companies are finding benefits and think the standard improves their business processes (Charlet, 2017)

1.1.1.5 ISO 45001

It was developed by a committee of occupational health and safety experts It will take into account other International Standards in this area such as OHSAS 18001, the International Labour Organization's ILO-OSH Guidelines, various national standards and the ILO's international labour standards and conventions

ISO 45001, Occupational health and safety management systems - Requirements, that will help organizations reduce this burden by providing a framework to improve employee safety, reduce workplace risks and create better, safer working conditions (ISO 45001)

1.1.2 Principles of 9001:2015 ISO system

1.1.2.1 Seven principles of 9001:2015 ISO system

ISO 9001 standard sets out the principles for a quality management system which is

a way of defining how an organization can meet the requirements of its customers and other stakeholders affected by its work It does not specify what the objectives relating to

―quality‖ or ―meeting customer needs‖ should be, but requires organizations to define these objectives themselves and continually improve their processes in order to reach them

 Customer focus: It is the top most items in 7 quality management principles that

creates a core base for businesses It highlights the potential benefits to an organization of implementing a quality management system (QMS), including: the ability to consistently provide products and services that meet customer and applicable statutory and regulatory requirements and facilitating opportunities to enhance customer satisfaction Below are some points that an organization should

do to meet the customer focus in ISO 9001:2015 standard:

 Understand the needs of existing and future customers

 Align organizational objectives with customer needs and expectations

 Meet customer requirements

 Measure customer satisfactions

 Manage customer relationships

 Aim to exceed customer expectations

 Leadership: The leadership importance of top management has always been in any

ISO systems A system is bound to run into problems without ongoing management support There are many ways that top management needs to demonstrate his leadership and commitment with respect to the QMS, such as being accountable for

the Efficiency of the QMS, ensuring resources are available, promoting continual improvement, and ensuring the Quality Policy and objectives are in place and consistent with the goals of the organization and the QMS

 Engagement of people: This is a new requirement in ISO 9001:2015 version for

top management to ―engage‖ everyone who contributes to the efficiency of the quality management system ―Engagement‖ is defined as ―the involvement in, and contribution to activities to achieve shared objectives.‖ (ISO 9000, 2015) Therefore, the rationale for this principle is that the creation of unity of purpose, direction, and engagement enable an organization to align its strategies, policies, processes, and resources to achieve its objectives In order to do this, top management is required to:

 Ensure that people’s abilities are used and valued

 Make people accountable

 Enable participation in continual improvement

 Evaluate individual performance

 Enable learning and knowledge sharing

 Enable open discussion of problems, constraints

 Process approach: This process approach is one of the most important items in a

quality management system ―A process is a set of interrelated or interacting activities that use inputs to deliver an intended result‖ (ISO 9000, 2015) The process approach enhances an organization’s efficiency in achieving its defined objectives In relation to ISO 9001:2015, it means enhancing customer satisfaction

by meeting customer requirements

 Improvement: Rationale improvement is essential for an organization to maintain

current levels of performance, to react to changes in its internal and external conditions and to create new opportunities Some actions that a successful organization always do to have an ongoing focus on improvement:

 Establish improvement objectives at all levels of the organization

 Ensure and empower that people at each levels are competent to apply tools and methodologies to achieve improvement projects

 Integrate improvement considerations into the development of new or modified goods, services and processes

 Recognize and acknowledge improvements

 Evidence-based decision making: Decision making can be a complex process, and

it always involves some uncertainty However, decisions based on the analysis and evaluation of facts, data and information; the understanding of cause-and-effect relationships are likely to produce more precise results with greater objectivity and confidence In order to do that, some actions that an organization has to take such as:

 Determine, measure and monitor key indicators to demonstrate the organization’s performance

 Ensure that data and information are sufficiently accurate, reliable, secure and available to the relevant people

 Ensure people are competent to analyze and evaluate data and information using suitable methods

 Make decisions and take actions based on evidence, balanced with experience and intuition

 Relationship management: For sustained success, an organization manages its

relationships with all of interested parties such as suppliers, partners, customers, investors, employees, and society as a whole In order to optimize their impacts on its performance, an organization should:

 Determine and prioritize interested party relationships

 Establish relationships that balance short and long-term considerations

 Pool and share information, expertise and resources with relevant interested parties

 Measure performance and provide performance feedback to interested parties

 Establish collaborative development and improvement activities

 Encourage and recognize improvements and achievements by interested parties

1.1.2.2 ISO 9001:2015 process approach

Besides above 7 principles, new version ISO 9001:2015 is also a perfect employment

of the process approach, which incorporates the Plan-Do-Check-Act (PDCA) cycle and risk-based thinking

 PDCA cycle: It enables an organization to ensure that its processes are adequately

resourced and managed, and that opportunities for improvement are determined and

acted on In accordance with the requirements of ISO 9001:2015, the following table provides examples of how an organization could do to manage its quality management system (ISO 9000, 2015)

Table 1.1: PDCA application in ISO 9001

Steps in process

PLAN

Define the context

Gather, analyze and determine external and internal responsibilities Monitor or communicate frequently with these interested parties to ensure continual understanding of their requirements, needs and expectations

Define the scope,

objectives and

policies

Determine the scope, boundaries and applicability based on the internal and external context and interested party requirements Decide the addressed markets

Establish objectives and policies Determine the

need to be

documented

Use risk‐ based thinking Use documented methods: graphical representations, user stories, written instructions, checklists, flow charts, visual media or electronic methods including graphics and systemization

Define the

interfaces, risks

and activities

within the process

Determine the activities, measures and inherent controls required to transform the inputs into the desired ouputs

Determine the risks to deliver unintended products and services to customers

Identify the validation necessary to assure Efficiency and efficiency

of the processes and system

DO

Steps in process

Implement Perform activities, monitoring, measures and controls of defined

processes and procedures, outsourcing, etc Define the

resources needed

Human resources (knowledge), infrastructure, environment, information, natural resources, materials, financial resources

CHECK

Verify the process

against its planned

 Risk-based thinking: Risk, ―effect of uncertainty‖ (ISO 9000, 2015) enables an

organization to determine the factors that could cause its processes and its quality management system to deviate from the planned results, to put in place preventive controls to minimize negative effects and to make maximum use of opportunities as they arise The concept of risk-based thinking has been implicit in previous editions

of this International Standard ISO 9001 for achieving an effective quality management system It includes carrying out preventive action to eliminate potential nonconformities, analyzing any nonconformities that do occur, and taking action to prevent recurrence that is appropriate for the effects of the nonconformity (ISO 31000, 2018)

Figure 1.1: Representation of the structure of ISO 9001:2015 in the PDCA cycle

Table 1.2: Risk matrix based on ISO 31010 (ISO 31010, 2009)

1.1.2.3 ISO 9001:2015 document structure

The QMS 9001:2015 international standard specifies levels of documentation that an organization must observe to document its quality management system This structure (Figure 1.2) could be applied for all ISO standards such as ISO 9001, ISO 14001, and ISO

22000

Figure 1.2: QMS 9001:2015 levels of documentation

 Level 1: Quality Manual: prescribes the minimum requirements for the content of a quality manual The standard recognizes that the structure and format of the manual will depend on the size, culture and complexity of the organization

 Level 2: Quality Procedures: are required for the following six tasks: control of documents, records, internal audits, nonconforming products, corrective and preventive actions

 Level 3: Work Processes / Instruction: describes how to undertake a specific part of a function, or activity It is similar to a procedure but is characterized by increased focus and further detail on a particular task Work instruction is mandatory, and must be subordinate to a procedure

 Level 4: Records are a way of documenting that the policies, procedures, and work instructions have been followed Records may be forms that are filled out, a stamp of approval on a product, or a signature and date on some type of document, such as routing sheet Records are used to provide traceability of actions taken on a specific product or batch of products They provide data for corrective actions and a way of recalling products, if necessary

1.1.2.4 Comparison between ISO 9001:2015 and ISO 9001: 2008

In 2015, a new version of the standard, ISO 9001:2015, has just been launched for replacing the previous version ISO 9001:2008 (ISO 9001, 2008) In fact, all ISO standards

are reviewed and revised regularly to make sure they remain relevant to the marketplace and take into account the different challenges that businesses in the globalization now face such as more complex supply chains, increased customer expectations, etc The comparison of ISO 9001:2015 to ISO 9001:2008 was done in Table 1.3 (IQCS Certification, 2016)

Table 1.3: The differences between ISO 9001:2015 to ISO 9001:2008

1 Structure Eight clauses - Ten clauses: 1 Scope; 2

Nominative references; 3 Terms and definitions; 4 Context of the organization; 5 Leadership; 6 Planning; 7 Support; 8 Operation;

9 Performance evaluation; 10 Improvement

- Reorganization of clause order and content to better align with other standards (High level structure)

2 Context of the

organization

No requirement An organization must determine,

monitor and review internal and external issues as well as relevant interested party requirements

4 Risk based

thinking

Preventive actions Organizations must take actions to

address risks and opportunities

5 Exclusions &

requirements

Excluding a standard requirement that was specific to product realization

Any requirement that cannot be applied may be excluded as long as it

is justified

6 Objects, outputs,

products and

Process based only The process model is expanded to

include anything that affects quality

No Items ISO 9001:2008 ISO 9001:2015

- Product and services

- External provider

- Risks and opportunities

- Documented information

1.1.3 Expected benefits of ISO 9001:2015 system

ISO 9001:2015 certification will provide maximum benefit to any organization if it approaches ISO 9001 implementation in a practical way This will ensure that the Quality Management Systems that are adopted, work to improve the business and are not just a set

of procedures that the employees will find hard to manage The benefits of ISO 9001:2015 which do not depend on how big or small of an organization could be gained as follows:

 State clearly objectives and identify new business opportunities through overall context assessment of the organization (Dale, 1994);

 Increase marketing opportunity: market expansion (some sectors and clients require ISO 9001 before doing business), old customer keeping and new customer attraction through the customer first policy (consistently meet their needs and enhance their satisfactions: improved quality and service; on-time and right first time delivery, fewer returned products and complains, etc.) (Su et al., 2015);

 Enhance business performance: increase productivity and efficiency, decrease internal costs through more efficient ways of working (efficient management process; clear responsibility assignments; well defined and documented procedures; improved resource management; deficiency highlights; identification of organizational risks and opportunities; continuous assessment and improvement); (Adanur and Allen, 1995)

 Meet the necessary statutory and regulatory requirements (Ho, 1994);

 Increase employees’ job satisfaction motivation and participation (Dale, 1994);

 Better supplier and interested party relationships with greater confidence in what the organisation do through the reputation of ISO 9001 (Pan, 2003)

1.2 Efficiency of applying ISO 9001:2015 in enterprises

 Cambridge Dictionary: ―Efficiency is the good use of time and energy in a way that does not waste any (Cambridge University Press, 2018)

 Business Dictionary: ―Efficiency is the comparison of what is actually produced or performed with what can be achieved with the same consumption of resources (money, time, labor, etc.)‖ (WebFinance Inc., 2018)

Put simply, efficiency in ISO 9000:2015 is ―the relationship between the results achieved and the resources used‖ (ISO 9000, 2015)

1.2.2 Criteria to measure the efficiency of ISO 9001:2015 system

ISO 9001 is a system aiming to ensure that both external and internal customers’ requirements of an organization are fully met at optimum cost through the efficient utilization of available resources Implementation of the system would therefore need to access based on following criteria:

1.2.2.1 Labour productivity

Labour productivity is concerned with the amount (volume) of output that is obtained from each employee (Rogers, 1998) Rising productivity implies either more output is produced with the same amount of employees, or that less imployees are required to produce the same level of output Labour productivity is calculated using this formula:

Labour Productivity = Output per period (units)

Number of employees at work

In order to remain competitive, a business needs to keep its unit down Naveh and Levene (Levene and Toffel, 2010; Naveh and Erez, 2006) deduced from their surveys that ISO 9001 adoption enhances worker productivity It was said that ISO 9001 certification has a positive and significant effect on operational performance which directly related to organisations’internal operations and labour productivity (Feng et al., 2007) Achieving higher labour productivity will become a simpler task when companies apply quality management system ISO 9001 with detailed and complete work processes and guidelines

1.2.2.2 Product quality

According to ISO 9000:2015, quality is a degree to which a set of inherent characteristics of an object fulfils needs or expectations that are stated, generally implied or obligatory (ISO 9000, 2015) The ISO 9001 standard provides guidances and tools for organizations who want to make sure their products and services consistently meet customer requirements and that quality and customer satisfaction are consistently improved Therefore, complying with ISO 9001 ensures customers get consistent, good quality products and services (Adanur and Allen, 1995) On the other hands, improving product quality also means reducing the percentage of returned defects from customers, which in turn brings both operational and business benefits to organizations (Feng et al., 2007)

1.2.2.3 Satisfaction of the implementing units

One important aspect of a successful business is the optimum balance among organization objectives such as cost, quality, and productivity Laszlo’s concept emphasized that rather than concentrating on applying cost-cutting measures to increase the benefits of ISO 9000, management needed to review their own operations and evaluated the satisfaction they individually provide to their internal customers (Laszlo, 1997) The full benefits of ISO 9000 could only be gained when the internal environment

of the company becomes more transparent It was easier for employees to access to documents that define their functions, tasks, processes and operation manuals (Bradley, 1994; Penson, 1997) The people using the ISO 9001 standard must have the right motivations of applying, must be communicated to fully understand the present and future benefits of the standard (Conway, 1994) Thus, their integrated and positive attitude towards ISO 9000 was also central to the success of an organization

1.2.2.4 Uniformity of document system

Uniformity of the ISO document system is extremely important and directly affects the efficiency of an ISO system If a system is constructed without a framework that explicitly defines document layers, types of documents in each layer as well as relationship among documents in the same layer and between layers, it will be very difficult to administrate and to ensure that ISO documents are not conflicted, causing confusion when being used In addition, the management of changes in that document system can not be implemented The use of outdated material can occur, leading to risks of creating unwanted quality products

1.2.2.5 Processing time for quality issues

Time consuming for handling of non-conformities is also a factor in assessing the efficiency of an ISO system If processing time is too long, procedures is too complicated, non-conformity related employees feel inconvenient to obey the procedures In order to ensure timely production, instead of obeying preset procedures, the employees will suggest solutions and make it verbally approved by their leaders This approach will solve the problems immedietly but lead to the failures to record the evidences of inappropriate processes and products, causes and corrective measures taken It later results in being unable to make a report on quality situation of raw materials, by-products and final products; as well as on efficiency of management work

1.2.3 Factors influencing the efficiency of ISO 9001: 2015 system

Nowadays, ISO 9001 is widely implemented by the manufacturing as well as service organizations in order to improve their product and service quality But, the ISO 9001 implementation initiatives are always confronted by the presence of numerous barriers The organizations need to tackle these barriers for successfully implementing the ISO 9001 standard The systematically analyzing factors affecting the successful implementation of ISO 9001 will enable the managers of the organization to know the impact of different factors on ISO 9001 implementation (Gopal and Attri, 2017)

1.2.3.1 Motivation factors (Driving force) towards obtaining the ISO 9001 certification

Many researchers found a strong interdependence between the companies’ certification motivations and the results obtained According to Subba (Subba et al., 1997), the success of ISO 9001 depended on the extent to which it addresses the original purpose for which it was created Based on 28 surveys by the Science and Engineering Policy Studies Unit (SEPSU, 1994) and 272 Australian firm surveys by Jones (Jones et al., 1997), companies that cited ―customer pressure‖ as their main reason for pursuing certification experienced fewer benefits than those that had a ―developmental view‖ When firms simply reacted to external pressures for getting certified (e.g using ISO 9001 certification

as a marketing tool to sign a significant number of contracts (Douglas et al., 2003; Polsinska et al., 2006), they might treat ISO 9000 certification as a prime goal, adopted a minimalist approach to achieve it and thus achieved limited internal performance improvements (Quazi and Jakobs, 2004) On the other hand, organizations that had strong internal motivation or willingness to improve quality, internal processes and systems rather than merely seek to get a certificate on the wall would get broader positive results from

ISO 9000 certification (Fotopoulos and Psomas, 2010; Llopis and Tari, 2003; Ruzevieius

et al., 2004) Indeed, although the main reasons to start implementing a quality system are the pursuance of external advantages, the implementation generally results in an increase

in internal benefits of intangible nature such as more apparent working procedures, better employees’ communication, lower degree of non-conformities, and higher efficiency

1.2.3.2 Top management commitment

It is the most important criteria affecting the implementation and performance outcomes of ISO 9001 Lee et al (Lee et al., 2009) showed that managers in organizations

―must realize that ISO 9000 is capable of generating a competitive advantage only if top management is fully committed to the program implementation from a strategic perspective‖ This is evidenced through the fact that top management acts as a driver of the implementation of quality management systems through the provision of necessary resources as well as a key to continuous improvement through the creation of values, goals and systems to satisfy customer expectations and improve organization performance (Chin and Choi, 2003) The true value associated with this certification should be made consistent with an organization’s strategic directions by top managers (Magd, 2008) The higher commitment of top management will lead to higher understanding of the ISO 9000 and higher the measurement of performance and communication (Ab Wahid and Corner, 2009)

1.2.3.3 Customer focus

It is believed that customers’ satisfaction will influence the future reactions toward any organization (readiness to repurchase, willingness to recommend to new customers, willingness to pay at the organization given price without seeking a lower-cost provider)

―Satisfaction is a customer’s emotional response to his or her evaluation of the perceived discrepancy between his or her prior experience with and expectations of our product and organization and the actual experienced performance as perceived after interacting with our organization and consuming our product‖ (Vavra, 2002) In order to meet this ISO 9001’s expectation, each organization has to fully understand its context and possess a sound knowledge of their customers' requirements through developing strong communication links with their customers Customers need to be kept informed of progress and changes proposed (Jackson and Ashton, 1995) This requires implementing an effective information gathering and dissemination system inside of organizations

1.2.3.4 Dynamic and continuous quality improvement

It is actually important to reap the long term benefits of ISO 9001 system (Ab Wahid and Corner, 2009; Nanda, 2005) Instead of merely asking ―Are we working to our system?‖, the dynamic approach requires asking whether ―Does our system work for the organization and its customers?‖ (Penson, 1997) In order to do that, an organization should look for opportunities for continuous improvement after certification through monitoring, review, internal and external audits It also demands understanding among the staffs that ISO 9000 is only a staging post in the way of attaining business excellence

1.2.3.5 Expert advice and uniqueness of the system

The ISO 9001 standard was built with the manufacturing sector in mind, the expert advice of consultants who possess some background in the area where ISO 9001 is to be implemented is, therefore, indispensable A proper interpretation of the standard and development of a unique, easy-understanding system reflecting the nature of the company’s operations is really crucial for ensuring the efficiency of ISO 9001 system (McLachlan, 1996) (Conway, 1994) Companies that hire consultants who do not have or have little experience in their field of activity may construct an impractical and informal ISO system The consequence is that both managers and employees in that company consider ISO as a cumbersome, boring and unnecessary system

1.2.3.6 Quality internal and external auditors

They are in a powerful position to increase the ability to unveil conformity and thus increase the value of certifications The main reason for conducting audits is to obtain factual input for management decisions concerned with staff development, technology, growth, product and processes However, the vast majority of audits only produce data for use in granting a certificate, for improving documentation or for enforcing conformity Certification audits through the auditors’ experienced suggestions help improve quality management systems and increase the motivation for quality work On the other hand, at the quality system maintenance stage, internal quality audits must be used not merely to verify the adherence to the defined quality management system but also to explore opportunities for continuous improvement (Nanda, 2005) These audit and inspection processes help further the homogenization and standardization of organizational processes (Power, 2003) which will add more values and benefits to the organization (Reid, 2002) There are a number of approaches generally used in conducting internal and external quality system audits:

 Element-based auditing provides evidences that an organization has introduced the elements of the standard into procedures

 Department-based auditing provides evidences that an organization has embedded the standard in departmental responsibilities and procedures

 Task-based auditing provides evidences that specific tasks have been accomplished

 Processes-based auditing is more effective than three above approaches In this approach, the auditors seek to establish the results an organization desires to achieve, determine whether these results take into account the needs of the customers and the interested parties and then examine the way processes are managed to achieve these results and improve performance If it is revealed that the organization satisfies the customers and other interested parties and applies all requirements of ISO 9001 standard in its activities, there is no sound basis to report nonconformities (Kaziliunas, 2008)

Based on criteria and factors affecting the efficiency of ISO 9001, in chapter 2, the real situations of the application of ISO 9001 in some Habeco breweries would be invested

in order to find out possible solutions to improve the efficiency of ISO 9001 system

CHAPTER 2: THE REAL SITUATION OF ISO 9001:2015 SYSTEMS IN SOME

HABECO BREWERIES 2.1 Introduction of Habeco Corporation

2.1.1 History of Habeco Corporation

The predecessor of Hanoi Beer - Alcohol - Beverage Joint Stock Corporation (Habeco) is Hommel Brewery which was built in 1980 by the French with an initial size of

30 employees for the purpose of serving the French Expeditionary Force In 1954, the North of Vietnam was completely liberated Before retreating, the French troops destroyed all machines and equipments, and burned important technical documents to cripple Hommel Brewery By 1957, according to the Vietnamese government's economic recovery policy, Hommel Brewery was restored and renamed Hanoi Brewery With the wholehearted help of Czech beer experts, on 1st May 1958, the first trial beer was successfully carried out by Mr Vu Van Boc, a skilled worker of the old Hommel Brewery

On 15th August 1958, the 13th anniversary of the successful August Revolution and the formation of the Provisional Democratic Republic as well as the 4th celebration of the capital’s complete liberation, the first Vietnamese bottle beer named Truc Bach was born

in the great joy of employees of Hanoi Brewery It is a product that asserted the ownership

of Vietnamese workers and served the essential needs of the Vietnam society at that time From this milestone, Hanoi Brewery entered a new era - the period of brand affirmation in Vietnam beverage industry and become the pride of Hanoians From then on, August 15th

is chosen as the traditional day of Habeco

In 1993, Hanoi Brewery changed its operation model, renamed it Hanoi Beer Company The company has stepped up its investment expansion, accelerated the renovation of equipments, and increased capacity to 50 million liters per year In 2001, the capacity was raised to 100 million liters per year

On 6th May 2003, the Ministry of Industry (now the Ministry of Industry and Trade) issued Decision No 75/2003/QD-BCN to establish Hanoi Beer – Alcohol - Beverage Corporation (abbreviated as Habeco) From 16th June 2008, the corporation officially changed from a state to a joint stock corporation under the Decision No.1863 / QD-TTg dated 28/12/2007 and Decision No 575/QD-TTg dated 16/5/2008 by the Prime Minister This is an important turning point for Habeco to affirm its position in the integration period

In 2010, the corporation completed and put into operation the project of building a new brewery in Melinh, Hanoi with the capacity of 200 million liters per year It was the most modern synchronous equipment brewery in the Southeast Asia After many years of continuous expansion, at present, Habeco has 2 main breweries, 17 subsidiaries and 6 associated companies, which scatter from the North to the Central provinces of Vietnam (Appendix 1) With a total capacity of over 800 million liters of beer, Habeco is always in the top three beer producers having largest market share in Vietnam

With more than hundred years of tradition and know-how of technology, modern equipment system, skilled, qualified and enthusiastic staffs, products of Habeco have been receiving the million love of Vietnamese as well as international consumers Nowadays, Hanoi beers, which have been built through many generations, have occupied an important position in the belief of the consumers and become the pride of Vietnamese brands The strength of ―a great tree‖ in Vietnam beverage industry has also helped Habeco products being widely distributed not only in the domestic but also in foreign markets such as Taiwan, Korea, England, Germany, USA, Australia, and many other countries around the world Below are some outstanding achievements that Habeco has gained during recent years:

 International Asia Pacific Quality Award (IAPQA), 2006;

 Golden Europe Award for Quality and Commercial Prestige 2005, Otherways Management & Consulting Association, Paris, France;

 29th International Award for the Best Trade Name in Madrid, Spain in 2004;

 Gold Star Award of Vietnam, continuously received since 2003;

 Gold Star Cup for ―Brand and Trademark‖

 National Brand Award

2.1.2 Vision and mission of Habeco Corporation

Vision: Hanoi Beer – Alcohol - Beverage Joint Stock Corporation is aiming to

become a strong and leading company in Vietnam beer, alcohol and beverage industry

 Research and develop strategic, added-value brands to meet the increasing demand

of domestic and foreign consumers

2.1.3 Habeco product introduction

2.1.3.1 Truc Bach can and bottle beer

Truc Bach, the first domestic beer in Vietnam since 1958, is named according to Truc Bach Lake - a place associated with the millennial land of civilization Thang Long - Hanoi

This high-grade beer of Habeco is made from the finest imported ingredients such

as Saaz, one of the world's four noble herbs, planted exclusively in the Zatec valley, the Czech Republic; and spring barley harvested from the famous raw materials of France and the Czech Republic

Truc Bach Beer is a piece of art with yellow and transparent beer like honey; white, thick, spongy and ―smooth" foam; slightly bitter which gradually turned to the sweet malt taste

2.1.3.2 Hanoi Premium can and bottle beer

Hanoi Premium bottle beer was introduced in 2005 and is oriented in the premium beer segment With the compact and elegance, this product is the ideal choice for parties, formal dining or simply a refreshing drink for individuals wishing to have an unforgettable experience

In 2017, Habeco launched Hanoi Premium can beer with breakthrough in both quality and modern design This high-class beer promises to be a unique product that brings new experiences to the young, the pioneering and trend-leading generation of Vietnam

2.1.3.3 Hanoi can beer

First introduced to Vietnamese beer lovers in 1992, the quality and convenience of Hanoi can beer make it become an indispensable gift for Vietnamese Tet holiday and other important occasions

2.1.3.4 Hanoi bottle beer

This core product of Habeco is a familiar choice in family and friend gatherings of beer lovers in the country because of not only its stable quality, but also its prestigious brand name associated with Hanoi capital

2.1.3.5 Hanoi can and bottle beer with green label

With the desire to better meet the needs of consumers in all parts of the country, in

2014, Habeco has launched Hanoi Green Label Beer - a product dedicates to beer lovers in the Central of Vietnam

The slogan of Hanoi Green Label Beer - "Traditional Flavors - Central Lifestyle" expresses the essence combination of over 120 years of Hanoi Beer and typical beer taste

of the Central people Beer lovers will have an unforgettable experience when enjoying the mild flavor, excellent quality of Hanoi Green Label Beer and sceneries of white sandy seas

in the center region

2.1.3.6 Hanoi draught beer (Bia Hoi Ha Noi)

Since 1960, Bia Hoi Ha Noi with a cool flavor has always been rated as a prestigious beer brand by beer lovers It is not only the first choice for intimate gatherings

of many domestic customers but also one of the most attractions of international friends when visiting Hanoi capital The reputation of this product along with the image of enjoying Bia Hoi Ha Noi at the pavements or the corners of Hanoi streets has long become

a popular culture only characterized by Hanoi capital

2.1.3.7 Uniaqua drinking water

With the goal of providing consumers a high quality drinking water, Uniaqua was introduced in early 2015 It is a pure, fresh product produced from natural groundwater throughout the modern production line using advanced technologies such as reverse osmosis, membrane filtration, and UV sterilization

2.2 Evaluation of the ISO 9001:2015 efficiency in Habeco breweries

2.2.1 The context of Habeco head quarter and its breweries

At present, based on its business strategy, Habeco applies Joint Stock company model for its management Through the process of development and improvement, the corporation has the following organizational structure:

 The head quarter consists of 11 departments located at 183 Hoang Hoa Tham and a research institute located in Hanoi - Me Linh Brewery with the total employees of about 140 people

 In 2009, Hanoi - Me Linh Brewery with a capacity of 200 million liters per year was established in Tien Phong commune, Me Linh district, Hanoi This brewery has 4 departments and 3 plants with the total employees of about 290 people

 In 2017, the corporation established the Hanoi - Hoang Hoa Tham brewery The brewery organizational structure includes 3 departments and 1 production plant with approximately 300 employees

 From the establishment of Hanoi Beer – Alcohol - Beverage Joint Stock Corporation in 2008, the corporation has 13 production sites which run as both subsidiaries and associated companies

Habeco has been constantly investing in improving production capacity and product quality; creating better conditions for production environment; enhancing the health of employees; saving raw materials and energy; and improving the position of the Corporation Since 2001, Habeco head quarter and its two breweries have applied ISO 9001: 2000 and were certified in June 2002 Recognizing the importance of environmental protection and social responsibility, from 2004, the corporation has developed and applied the environmental management system according to ISO 14001: 2004

In line with the development trend, consumers are particularly concerned about food safety and health Thus, Habeco always pays much attention to produce hygiene and food safety products to gain the long-term trust of customers It was done by the development and application of food safety management system ISO 22000: 2005 in 2006 For the purpose of continuous improvement of quality and launch of new products, Technical Institute of Brewing was established in 2007 In 2015, the institute with many modern new analytical instruments and pilot production system has moved to a new building in Melinh Brewery And in 2018, the Analysis Center in the institute was established and applied General requirements for the competence of testing and calibration laboratories ISO/IEC

17025

For production sites in Habeco group, at present, each company has its own management system All companies have developed and been certified food safety management system ISO 22000 which is mandatory for food producers For quality management system ISO 9001, all companies have built up the system but some have not got the certification The ISO 14001 environmental management system has not been fully implemented Companies which are small and locate in the area that in low demanding for developing an environmental management system are lack of ISO 14001

Table 2.1: ISO standards in Habeco member companies

No Company’s name ISO 9001 ISO 14001 ISO 22000

audit in 2012

4

Hanoi Beer - Alcohol - Beverage

Investment and Development Joint Stock

8 Hanoi - Namdinh Beer Joint Stock

10 Hanoi - Haiphong Beer Joint Stock

2.2.2 The real situation of applying ISO 9001: 2015 in some Habeco breweries

The assessment of ISO application ịn Habeco head quarter and member companies is based on the criteria set out in Chapter 1 Primary data collection was done as follows:

 The in-depth well-planned interviews (Appendix 5) were made with senior managers, ISO representatives of companies, heads of departments, staffs in specialized departments and workers in production areas in Habeco group After that, each person received the questionnaire (Appendix 6) to evaluate the implementation of ISO 9001 in their own company based on scale of ten In total,

292 completed questionnaires in 310 distributed questionnaires were received which represented a response rate of 94.2% 18 other questionnaires were eliminated because of lacking information Of all 292 completed questionaires, 78 questionaires were delivered to high and middle managers of Habeco head quarters and its member companies (Appendix 2) Based on the data collected, the mean values were found out and used for drawing bellowing charts to evaluate each criterion to understand how effective ISO systems are

 Internal audits were planned and done at each department, production plant in each company in Habeco group Each team comprised of 3 to 4 people from Habeco head quarter (Appendix 4) After each audits, internal auditors were asked to fill in the same questionairs (Appendix 6) used for leaders and workers of member companies to evaluate the ISO implementation and compare with the results previously obtained

 The expert interviews with senior ISO 9001 experts (Appendix 3) were conducted

to find the desired levels for each criterion The efficiency of ISO 9001 implementation was fully understood by comparing this desired level with the current scores assessed by internal auditors and companies by themselves

2.2.2.1 Labour productivity

Labor productivity plays an important role in determining labor wage policy, especially for state-owned enterprises such as Habeco In order to improve labor wages, companies must demonstrate the increase in their productivity And the effect of ISO 9001 adoption on labour productivity is positive Rigorous adherence to written procedures, clear guidelines implies a fairly routinized workplace, avoids mistakes in the production (Levine and Toffel, 2010) Well-defined processes also make it unnecessary for employees

to spend time asking how to solve a problem, thus increasing productivity On the other hand, ―continuous improvement‖ principle in ISO 9001 expects emloyees to perform discretionary tasks such as documenting new procedures and contributing quality improvement ideas, it in turns increases the labor productivity

Figure 2.1: Labor productivity in Habeco groups

* Source: Human Resource Department of HABECO

Labor productivity in Habeco is calculated as the number of liters of beer that a labor could produce in a year The labor productivities of different companies were not the same (Figure 2.1) HQ and ID were highly productive partly because they have applied ISO

9001 system quite a long time and their ISO 9001 practice was rather good with transparent procedures and work guidelines In contrast, relatively high labor productivities

in NA and HHP was not meaning of good ISO 9001 application It came from high production volume with overtime work and more seasonal workers Companies which have many manual labors, newly and unsthoroughly applied ISO 9001 like ND, KB, QB had low labor productivity In addition, positively changes in labor productivity in Habeco group from 2015 -2017 were not much due to the number of laborers in recent years was almost stable but the production volume of beer increased only from 3 to 5%

2.2.2.2 Product quality

Product quality plays a very important role in any business’s survival and it is considered one of the top objectives of any business Habeco always commit to provide its customers with the best carefully refined products However, evaluation of the product or service quality must be based on customer satisfaction, production output and number of customer complaints In Habeco, during the 3-year period from 2015 to 2017, when the sales of beer has slowly grown from 3 to 5%, the comparison of yearly complaints could

be used for product quality evaluation Looking on present Habeco’s context, all bottled and canned beers were sold by Habeco head quarter while draught beer and local beers by

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