LAM TUAN HUNG RESEARCH ON THE CAPACITY OF PROVIDING SERVICE OF VIETNAM LOGISTICS ENTERPRISES IN THE NORTHERN KEY ECONOMIC REGION Major: Commercial Code: 62.34.01.21 SUMARY OF ECONOM
Trang 1LAM TUAN HUNG
RESEARCH ON THE CAPACITY OF PROVIDING
SERVICE OF VIETNAM LOGISTICS
ENTERPRISES IN THE NORTHERN KEY
ECONOMIC REGION
Major: Commercial Code: 62.34.01.21
SUMARY OF ECONOMIC DOCTORAL THESIS
Ha Noi, 2020
Trang 2The work was completed in Vietnam Institute of Industrial and Trade Policy And Strategy
Instructor:
1 Assoc Prof Le Trinh Minh Chau
2 Dr Luc Thi Thu Huong
The dissertation will be defended in front of the State Council for Thesis
Evaluation at the Vietnam Institute of Industrial Policy And Strategy - Ministry
of Industry and Trade, 46 Ngo Quyen – Hanoi at……
The dissertation can be found at:
Hanoi National Library
Library of Viet Nam Institute of Industrial and Trade Policy And Strategy
Trang 3INTRODUCTION
1 Urgency of research
Vietnam is considered as a country with ideal natural conditions and geographical position to develop the logistics industry With the scale of 20-22 billion USD/year, accounting for about 20.9% of the country's GDP; the annual industry growth rate has reached 20-25% on average; in recent years, the logistics service industry is playing an important role in the process of integration and economic development in Vietnam The Northern key economic region (NKER) is a region with
a special position in economic development It is the gateway of the northern provinces
of Vietnam, leading to the East Sea and connecting large markets with each other such
as Northeast Asia with the ASEAN region and vice versa According to the Vietnam Logistics Business Association (VLA), there are currently about 3,000 businesses providing logistics services, mainly in forwarding, warehousing, loading and unloading services, transport agents, etc mostly located in Ho Chi Minh City, Vung Tau, Da Nang, Hanoi, Hai Phong and Quang Ninh Except for state-owned enterprises which are being equitized, most logistics enterprises in the key economic region are small and medium-sized, with the average charter capital of VND 4-6 billion dong, the proportion of logistics trained human resources is still quite low at 5-7% They are mainly young and dynamic enterprises, mosly originally come from State-owned enterprises, joint venture companies or foreign invested enterprises Domestic logistics enterpris come with a large number but only account for a very modest proportion of service revenue and the main job is to act as an agent or undertake certain stage(s) for international logistics businesses Foreign-invested enterprises such as APL, NYK, Linfox, Maersk, K&N, Schenker are currently active in logistics sector in Vietnam Comparing to the period before joining the WTO, Vietnam's logistics service industry has significantly grown in terms of the number of participating enterprises as well as the professionalism of service providers How ever, this breakthrough is still unsustainable due to the lack in the process and skills to provide full service The network of service is ineffectively disconnected and straitly covered Thus, the competitiveness of enterprises will be improved, contributing to the growth of the industry and the national economic development From the above analysis, the PhD
student has selected the topic:“ Research on the capacity of supplying service of vietnam logistics enterprises in the northern key economic region”
Trang 42 Research objective and missions
- The research objective of the thesis is: The thesis clarifies the scientific basis for both theoretical and practical aspects for proposing basic solutions to improve the service provision capacity of Vietnam logistics enterprises in the Northern key economic region
3 Object and scope of the study
- Research object: theoretical and practical issues about the service provision capacity of logistics enterprises and the service provision capacity of Vietnam logistics enterprises in the Northern key economic region, approaching from the perspective of management based on competency
- Research scope:
+ In terms of space: carry research on logistics enterprises with its head office in the Northern key economic region This research is focused on pure logistics enterprises that provide services to other businesses without transferring ownership of goods
+ In terms of time: practical research is limited to the period from 2010 - 2019; Proposing solutions to 2025 and with a vision to 2030
+ In terms of content: the thesis focuses on analyzing the service provision capacity of logistics enterprises based on the constituent factors of service provision capacity
4 Research methodology
4.1 Research process
The research process is illustrated in the figure 0.1
Trang 5Figure 0.1: Research process
(Source: Illustration by PhD student)
4.2 Research model
From theories of resources, capacity of logistics services, logistics enterprises as well as documents on service delivery capacity in general and logistics services in particular In this study, PhD student proposed the research model of the thesis shown
in Figure 0.2 Model include:
Figure 0.2: Research framework model of the thesis
(Source: Summary and development from Barney, 1991; Sanchez and partner, 1996;
Mentzer, 2004; David, 2014; Thompson partner, 2015)
Trang 64.3 Research Methods
- Data collection method:
+ Secondary data is collected through sources of conferences, theses, research, books, newspapers and on the Internet
+ Primary data was collected through: expert interviews, survey methods and case studies
- Data analysis method
+ Quantitative method
+ Qualitative method
5 New contributions of the thesis:
The thesis is a combination of theoretical research and applied research with the following major new contributions:
- Theoretically, the thesis has contributed to systematize, supplement and develop a number of theories on service provision capacity of logistics enterprises In particular, it clarifies the concept of service provision capacity of logistics enterprises; inherit and adjust from international scholars about the constituent factors of logistics service provider's provision capacity; proposing a model to evaluate the service provision capacity of logistics enterprises;
- In practice, the thesis has pointed out the strong points, weaknesses and causes
of capacity to provide services of Vetnamese logistics enterprises in the Northern key economic region On that basis, the thesis will propose solutions to improve the service provision capacity of logistics enterprises in the Northern key economic region
OVERVIEW OF RESEARCH
1 Overview of research
1.1 Research on logistics
* Research on logistics management in enterprises
There are some international authors to mention such as: Alan Harrison and Remko Van Hoek (2015) "Logistics Management and Strategy"; Martin Christopher
(2011) "Logistics and Supply Chain Management"; Doan Thi Hong Van (2011)
"Logistics - Basic issues"; Le Cong Hoa (2012) "Logistics management"; An Thi Thanh Nhan, Nguyen Van Minh and Nguyen Thong Thai (2018) "Business Logistics Management Curriculum" The aforementioned documents mainly approach logistics
Trang 7as a function of the business and manage this activity in enterprises, not to mention much about the logistics service industry, especially the logistics services suppliers
* Research on the status of logistics industry in Vietnam
Studies on the status of Vietnam's logistics industry include research related to the development of logistics services in Vietnam; Competitiveness of Vietnam's logistics industry To name a few: Dang Dinh Dao ans his partner (2011) "Developing logistics services in Vietnam in the context of international integration"; Dang Dinh Dao and Nguyen Minh Son (2011), "Logistics services in Vietnam in the process of international integration"; Dinh Le Hai Ha (2012) "Developing logistics in Vietnam nowaday"; Bui Duy Linh (2017), Improving the competitiveness of Vietnam's logistics service industry in the context of economic integration ”; Vietnam Logistics Report
2017, 2018 and 2019
* Research on Vietnam logistics enterprises
There are several outstanding studies such as: Dang Thu Huong (2010),
"Developing Vietnamese logistics enterprises - Existence & solutions"; Nguyen Thi Minh Nhan (2012), "Competitive strategy of Vietnamese logistics enterprises based on knowledge in the context of globalization"; Le Tan Buu and partner (2014), "Core criteria affecting the decision to select logistics service providers in Ho Chi Minh City"; Nguyen Hoang Hai (2017), "Assessing the competitiveness of Vietnamese logistics enterprises"; Nguyen Thi Huong (2013), "Solutions for effective implementation of M&A activities of logistics enterprises in Vietnam"; Ngo Tan Hung (2012), "Actual situation and solutions to develop logistics service provision enterprises in Quang Ngai
province"
1.2 Research on service provision capabilities
* Research on services and service suppliant
Typically, there are the following authors & research works: Nguyen Thi Nguyen Hong (2014), "Service administration"; Pham Thi Huyen and Nguyen Hoai
Long (2018), "Service marketing curriculum";
* Research on service provision capabilities
Nguyen Bach Khoa and Canh Chi Quan (2013), "Perspectives and some solutions to improve the passenger transport service capacity of Vietnam Airlines"; Nguyen Hoang Long and Nguyen Thi Hang (2013), "Capacity of providing training
Trang 8services of Vietnamese universities and colleges, some arguments and research models"
* Research on service provision capacity of logistics enterprises
Competence - Based View - CBV was developed primarily by the studies of Barney (1991), Wernerfelt (1984), Peteraf (1993), Sanchez and Heene (1996, 2004,
2008, 2010) Mentzer and partner (2014) "The unified theory of logistics service provider's capacity" and Shang & Marlow (2007) show the components of logistics service provider's service provision capacity; Sanchez and Heence (1996, 2004) asserted that capacity is created by adding capabilities; combining resources will create competitive advantages and allow enterprises to achieve their strategic goals
1.3 Research on the Northern key economic region
There have been a number of related studies in the Northern key economic region, typically the following studies: Nguyen Danh Son (2007), “Basic investigation
of sustainable development factors in the Northern key economic regions”; Ta Dinh Thi (2007), "Shifting the economic structure from the viewpoint of sustainable development of the Northern key economic region"; Tran Phuong Anh (2012),
"Development of human resources in key economic regions of Vietnam" Vu Thi Loc (2018), "Building a commercial development strategy for the Northern key economic region till 2030"
2 Research gaps
PhD student identify research gaps for the thesis as follows: (1) Research on the service provision capacity of logistics enterprises, in which confirms the concept of service provision capacity of logistics enterprises; explain the elements, evaluation criteria and factors affecting the service provision capacity of logistics enterprises; (2) Research on logistics enterprises whose headquarters in the Northern key economic region
CHAPTER 1 THEORETICAL BASIS ON THE CAPACITY OF SERVICE
SUPPLY OF LOGISTICS ENTERPRISES
Trang 91.1 OVERVIEW OF LOGISTICS SERVICES AND LOGISTICS ENTERPRISES
1.1.1 Definition, features and classification of logistics services
1.1.1.1 Logistics services definition
According to Article 233 of the 2005 Commercial Law, logistics services are
defined as follows: “Logistics services are commercial activities, whereby
businessman organize one or more tasks including receiving goods, transporting and storing goods, warehousing, customs clearance, paperwork, customer advice, packaging, code signing, delivery or other services as agreed upon with the customer for remuneration ”
1.1.1.2 Features of logistics services
Logistics services are quite similar to other services in some features such as: no reserve, intangible, no separation between production and consumption; unstable quality of service in different times and different suppliers In addition to the features
of the service industry in general, logistics services also have the following characteristics: (1) The object of logistics service relationship includes suppliers and customers; (2) The complexity of the process of providing logistics services; (3) Logistics services create a continuance with goods-related services such as transporting; packing; freight forwarding; warehousing; customs brokering; (4) Logistics services play an important role in the production and business activities of enterprises
1.1.1.3 Classification of logistics services
Currently, there are many ways to classify logistics services, within the scope of the thesis, logistics services are divided into many different criteria: by type of operation; in the WTO classification manner; according to the level of added value of the service or according to the service content
1.1.2 Definition, role and classification of logistics enterprises
1.1.2.1 Logistics enterprisses definition
Logistics enterprises are understood as: "an economic legal entity with the purpose of providing one, several or entire logistics services at the request of customers"
1.1.2.2 The role of logistics enterprises
Trang 10The role of logistics enterprises
Logistics enterprises have a role in the supply chain: connecting goods transactions between suppliers and customers in the supply chain; Logistics enterprisses help businesses in the supply chain focus on developing core and specialized competencies 1.1.2.3 Classification of logistics enterprises
There are many ways to classify logistics enterprises, within the scope of the thesis, they are divided according to different criteria: according to the type of service provided; the goods type; the position of participation and level of integration in the supply chain; ownership level & scale
1.1.3 System and process of providing services of logistics enterprises
1.1.3.1 Service supply system of logistics enterprises
The service delivery system helps to clarify the interaction between customers and employees through the service supply process, and at the mean time shows how they are supported by the activities and systems behind For customers, the service supply system gives customers a better service experience, exploit the value of the benefits of the service For providers, the service supply system facilitates the integration of resources with the operational activities of logistics enterprises
1.1.3.2 The services providing process of logistics enterprises
Researching from the perspective of being a logistics service provider, the process of providing services consists of many stages, starting from the time the enterprise determines the needs of its customers until the customers consume products/services of businesses
1.2 DEFINITION, FACTORS AND CRITERIA FOR EVALUATION OF SERVICE PROVISION CAPACITY OF LOGISTICS ENTERPRISES
1.2.1 Definition of service provision capacity of logistics enterprises
1.2.1.1 Resources and capabilities of enterprises
a Resources of enterprises
The enterprise resource theory states that it is the resources of the enterprise that will determine the competitive advantage and business efficiency of enterprises The essence of the theory states that businesses can gain and maintain a competitive advantage by creating and deploying valuable capabilities and resources (Wernerfelt, 1984) Aziz and partner (2015) through a survey with managers of logistics enterprises
Trang 11found that resources of logistics enterprises include: physical resources, management resources, technology resources, relational resources and organizational resources
b Capacity of enterprises
Competence - Based View (CBV) Businesses management perspective focus on the ability to use, combine assets, resources, and capabilities to achieve the overall growth and efficiency of the organization It was developed primarily by the studies of Barney (1991), Wernerfelt (1984), Peteraf (1993), Sanchez and Heene (1996, 2004,
2008, 2010) Studies by Sanchez and Heene (1996, 2004), Freiling and partner (2008) confirm that competencies created by adding capabilities, combining resources to create competitive advantages and allow companies to achieve strategic goals According to Sanchez and Heene (1996, 2004), organizations organized as an open system of resources, resources flow deployed and coordinated in the process will create and distribute value
1.2.1.2 Definition of service provision capacity of logistics enterprises
The definition of service provision capacity in this study can be stated as follows:
“The service provision capacity of logistics enterprises is the ability to create, deploy and coordinate logistics enterprises' resources to meet the demand for logistics services
of customers, provide added value to customers and achieve business goals of the enterprise ” (Source: Compiled and developed from Lai, 2004; 2010; Sanchez and
Heene, 1996)
1.2.2 Factors contributing to the service provision capacity of logistics enterprises
Mentzer et al (2004) suggest that the result of the service supply process of an enterprise is to create value to meet the needs of customers at the highest level This is the core element for to businesses build a competitive advantage, achieve long-term profits and help enterprises to survive and thrive in competitive environment Customers' requirements for LSPs often focus on: providing package services, being punctual, ensuring safety and right products, ensuring flexibility and responding to unexpected requests Therefore, the evaluation of logistics capacity is the assessment
of the provision capacity of logistics enterprises For enterprises, providing services must stem from the needs of customers Therefore, for service providers in general and
logistics service providers in particular, the ability to identify and meet customer needs
is one of the important components of the service provision capacity After that, logistics enterprises will carry out specific operational processes to meet customers'
Trang 12demand for logistics services This process consists of many diverse and relatively complex stages Through the service delivery process, customers' needs will be met and transformed into the result of service provision In order for the service results to satisfy customers with the highest quality, logistics enterprises must be able to meet requirements of customers on the following criteria: time, accuracy and safety, flexibility in solving situations and handling of complaints from customers Therefore,
to evaluate the service provision capacity of logistics enterprises, it is indispensable for operational competence components If the ability to identify and meet customer needs and operational competence is conssidered as the necessary conditions, the information management capability would be the sufficient condition for the services provision capacity In order to provide services to customers on the basis of maintaining and developing market share as well as profits, identifying advantages to achieve the goals, logistics enterprises must "synchronize" the capabilities and available resources To do
so, logistics enterprises need to have integration and connectivity capability
Figure 1.9: Factors contributing to the service provision capacity of logistics
enterprises
(Source: Proposed by PhD student, 2019)
Research students identify four factors that constitute the capacity to provide services of logistics enterprises, which are: capacity to identify and meet customer needs; operational capacity; information management capacity; integration and connectivity capability
Trang 131.2.3 Criteria for evaluating the service provision capacity of logistics enterprises
Based on the literature review of the authors Mentzer et al (2004); Shang and Marlow (2007); Lai (2004; 2010), PhD student proposed the criteria to evaluate the service delivery capacity of logistics enterprises Then, the PhD student carried out interview to consult with experts to assess the suitability of the proposed criteria PhD student had a direct discussion with experts in the field of logistics to collect information needed for research Experts consulted include: scientists at research institutes, universities and colleges; policy makers working at the Ministry of Industry and Trade; logistics enterprises in the Northern key economic region Among the 23 proposed criteria, the percentage of criteria with an average of 2.5 points or more is 100% (23/23 criteria; none of the criteria has a score below 2.5 points); The average value of the criteria ranges from 3.58 to 4.79 points This result shows a very high level
of agreement among the experts with the criteria proposed by the PhD student With the results, the above 23 criteria will be used in large-scale surveys with service providers and customers using services to evaluate service provision capacity of Vietnam logistics enterprises in the Northern key economic region
1.3 FACTORS AFFECTING SERVICE PROVISION OF CAPACITY LOGISTICS ENTERPRISES
1.3.1 Macro environment: national logistics infrastructure, economic factors,
political - legal factors; Science - technology factors
1.3.2 Industry environment: customers, competitors, partners
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CHAPTER 2 EVALUATION OF ACTUAL SITUATION OF SERVICE PROVISION CAPACITY OF VIETNAM LOGISTICS ENTERPRISES IN
THE NORTHERN KEY ECONOMIC REGION
2.1 OVERVIEW OF LOGISTICS SERVICES IN THE NORTHERN KEY ECONOMIC REGION
2.1.1 The socio-economic development advantages of the Northern key
economic region have an impact on the development of logistics industry
The northern key economic region includes 7 provinces and cities: Hanoi, Hai Phong, Vinh Phuc, Bac Ninh, Hai Duong, Hung Yen and Quang Ninh; with a natural area of 15,594.2 km2, accounting for 4.7% of the country's natural area The population