MGT Group Report - Group 3 - MGT

Analysis of Vinamilk's resource control process .... Company profile Type: Joint-stock company Founded: August 20, 1976 Headquarters: 10 Tan Trao, District 7, Ho Chi Minh City, Vietnam

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Group Assignment Report

Analyze the control process of Vinamilk

Fundamental of Management

Lecturer: Quang Trung Hieu

GROUP 3

Student Information:

• Pham Hoang Mai – HS160238

• Nguyen Thi Thuy Linh – HS160695

• Bui Vu Anh Đuc – HE153445

• Vu Tien Đat - HE150308

• Nguyen Tuan Nam – HS150431

• Nguyen Tran Khanh Dung - HE141089

MGT101 | MKT1609 | July 10, 2021

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TABLE OF CONTENTS

I Company information 3

1 Company profile 3

2 From the values inside 4

3 Development strategy 4

4 Organization chart 5

II Literature review 6

1 Definition 6

2 The purposes of control 6

3 Types of control 6

4 Steps in control process 6

III Critical analysis 7

IV Analysis of Vinamilk's resource control process 8

1 Physical resource 8

a Physical resource 8

b Inventory Management Process 8

c Quality Management Process 10

2 Human resource 12

a Define mission and core values 12

b Corporate culture 12

c Policy on training human resources 13

d Employee treatment policy 13

e Recruitment strategy of Vinamilk 13

3 Information resource 13

4 Financial resource 15

V Difficulties & Recommendations 17

1 Difficulties 17

2 Recommendation 17

VI Conclusion 18

VII Reference 18

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I Company information

1 Company profile

Type: Joint-stock company Founded: August 20, 1976

Headquarters: 10 Tan Trao, District 7,

Ho Chi Minh City, Vietnam

Traded as HOSE: VNM

Brands: Vinamilk, Dielac, Susu,

Vfresh, Ong Tho, Probi

Area served: Worldwide

Products: fluid milk, powdered milk

and sweetened condensed milk, along

with yogurt, frozen yogurt, ice cream,

cheese and infant nutrition flour

Key people: Mai Kieu Lien - CEO

Revenue: 59.738 trillion VND (2020) Services: General clinic, investing, real

estate Net income: 11.236 trillion VND

(2020)

Number of employees: up to 10.000 (2020)

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2 From the values inside

- VISION: Become the leading symbol of trust in Vietnam about nutrition and health products serving human life

- MISSION : Vinamilk is committed to providing the community with top-class

nutrition and quality with its own respect, love and high responsibility for human life and society

- CORE VALUES :

• INTEGRITY:Integrity and transparency in actions and transactions

• RESPECT: To have self-respect, to respect colleagues To respect the

Company and partners To cooperate with respect

• FAIRNESS: To be fair with employees, customers, suppliers and other parties

• COMPLIANCE: To comply with legal regulations, the Company’s Code of Conduct, and the Company’s procedures and policies

• ETHICS: To respect the established ethical standards and act accordingly

- BUSINESS PHILOSOPHY: Vinamilk desires to become one of the most favourite brands in every region and territory Therefore, they keep in their mind and their heart that the quality and innovation are always the most important companions They act with customer-centered approach and commit to respond

to all their customer’s needs

3 Development strategy

- Becoming one of the 30 largest dairy companies in the world

- Leading in highly applicable innovations

- Consolidating the leading position in the Vietnam’s dairy industry

- Becoming the most valuable dairy company in the Southeast Asia

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4 Organization chart

The organization Chart of Vinamilk is shown in a professional manner in which departments are divided systematically and reasonably with specific hierarchy of responsibility for each member and function in the company This structure helps the company to operate in the most effective way and fosters collaboration among departments, thus making a strong company

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II Literature review

1 Definition

Control: the regulation of organizational activities in such a way as to facilitate goal attainment

2 The purposes of control

- Adapting to Environmental Change

- Limiting the Accumulation of Error

- Coping with Organizational Complexity

- Minimizing Costs

3 Types of control

- Areas of Control:

• Physical resources

• Human resources

• Information resources

• Financial resources

- Levels of Control:

• Operations control

• Financial control

• Structural control

• Strategic control

4 Steps in control process

Establishstandards

Measure performance

Compare performance against standards

Determine need for corrective action

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III Critical analysis

According to Anthony Stafford Beer “If cybernetics is the science of control, management is the profession of control” Control is a vital function of management Its importance becomes apparent when we see that it is essential in

all steps of management (Planning and Decision making, Organizing, Leading) It helps to check for errors and take corrective action, minimizing

deviations from standards and keeping your project management on track Therefore, the success of the organization depends on effective control To get there, it has to be done by everyone in the organization, from the top to the bottom

It has never been easy to successfully create world-class dairy farming technology

with specific conditions in Vietnam But Vinamilk with the right vision and orientation; specific and clear goals; strict resource control process; investment, creative application of advanced technology in production and

business activities associated with green and clean environmental protection has created a sustainable development of a system of high-tech dairy farms from North to South

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IV Analysis of Vinamilk's resource control process

1 Physical resource

a Physical resource

- Operating for more than 40 years, up to now, Vinamilk owns:

• 2400 points-of-sale convenience stores

• 5.400 points-of-sale supermarkets

• 240.000 points-of-sale conventional channels

• 12 global G.A.P dairy farms

• 132.000 total herd of cows

• 200 items of pasteurized milk and dairy products

• Total capacity of 504 thousand tons/year, reaching 70% efficiency

• The production line reappeared and imported technology from

European countries such as Germany, Italy, and Switzerland to apply to the production line

b Inventory Management Process

used to produce goods available for sale Inventory represents one of the most important assets of a business because the turnover of inventory represents one of the primary sources of revenue generation and subsequent earnings for the company's shareholders

- Vinamilk classified inventories according to Standard No 02 which is one of 26 accounting standards issued and announced under Decision No 149/2001/QD-BTC dated December 31, 2001 of the Minister of Finance

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- Vinamilk's inventory management:

• Goods are delivered to the receiving area of the warehouse

• Goods are reviewed, sorted, and stored on shelves in special stock

areas Goods may be assigned codes and tagged with barcodes for

easier tracking

• Inventory levels are monitored regularly, with physical inventory counts performed periodically This ensures everyone has an accurate understanding of available inventory and helps minimize the chance of stockouts, deadstock, missed or duplicated orders, and risk exposure due to theft and fraud Vinamilk applied the EOQ (Economic order quantity) model to calculate the optimal order quantity

• Orders are placed by customers, either internal or external For example, a consumer may place a purchase order for the company’s products, the sales department may submit a sales order, or a staff member may submit a requisition for office supplies

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• The order approval is verified against the original purchase order, sales slip, internal purchase requisition, etc

• The required goods are pulled from stock areas and sent either to production (manufacturing), directly to the retailer/customer/end-user (finished goods), or routed to the appropriate business

unit/department (internal requests)

• Records are updated and shared with all relevant stakeholders

• Inventory levels are used to restock goods and materials as needed

- Besides, Vinamilk also combines with smart warehouses Here, the Robots automatically transfer finished goods to the warehouse Pallet storage with earthquake resistance; 8 warehouse systems and unloading machines Exyz new and most advanced technology today The system is faster, lighter, and more energy efficient than any previous generation of similar machines The application of automatic technology and integration on automation solutions, and Walmart warehouse management system have contributed to turning the Vietnamese dairy factory into the most modern factory in the world, marking Vietnam's mark on the world map in the dairy industry

c Quality Management Process

- Vinamilk mainly uses 2 tools to control product quality:

• HACCP (Hazard Analysis and Critical Control Point System)

• Management according to ISO 9001-2000

- Quality management process includes:

• The quality control department sets out the quality requirements The quality of raw milk is determined through analytical tests of physico-chemical criteria (content of dry matter, fat, protein), food safety criteria (microbiology and contaminants such as heavy metals,

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mycotoxins, fungi, residues of veterinary drugs and plant protection drugs, ) and organoleptic criteria (odor, color, )

• The import and export department will purchase goods according to the given standards Fresh milk from dairy farming households, after being milked, is quickly delivered to transfer stations At the transshipment station, the factory's product quality inspector will conduct tests, analyze precipitation, sense of taste, microbiological criteria, and lactic fermentation If the milk meets the standards, it will be purchased

• Imported materials must be inspected and certified by the Department

of Food Safety and Hygiene

• The Product Quality Control Department at the factory will check the quality of all materials before putting them into production

• During the production process, each stage is strictly controlled,

recorded and analyzed

• After production is completed, the product will be thoroughly checked before being sent to the warehouse

- Vinamilk's milk quality control process rarely makes mistakes because the production process is completely closed and monitored regularly by computers If there are errors, it mainly occurs during milking and transportation because bacteria are most easily penetrated during these 2 stages Vinamilk conducts assessments very often, attached to each production process This avoids major errors

- The whole process of sampling, analyzing, and determining the amount of milk to be paid to dairy farmers, if there is a difference between the standard and the actual product quality, then there will be appropriate adjustments and handling

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2 Human resource

a Define mission and core values

nutrition and health products serving human life Providing the best nutrition, the best quality with their respect, love and high responsibility for human life - society

are the 5 core values that any business should have

b Corporate culture

- Vinamilk always respects the opinions of employees Therefore, its employees are always respected, listened to and shared Vinamilk does not have a leadership style that imposes and forces employees to follow

a rut Employees can freely give their own ideas and contributions to make the company more perfect

- Create a professional, friendly and open working environment This helps to break the gap between employees and leaders, employees with employees, new people with old people for the purpose of promoting the development of the company

- Create mental comfort for employees to work with peace of mind so that they can be more dedicated, enthusiastic and devoted to the company

- Praise and criticize:

• Give rewards to employees who always try hard and work hard for the company

• Create discipline for employees who are not serious at work

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c Policy on training human resources

- Vinamilk recruits excellent graduates from universities throughout the country and sends them to study abroad

- Vinamilk supports 50% of tuition fees for staff training courses to improve qualifications and professionalism

- Short-term training program for employees in the company to improve their qualifications and professionalism

- Organize exchange and experience sharing sessions among officers and employees to learn and absorb new knowledge

d Employee treatment policy

- Ensure income and benefits for employees

- Timely reward individuals/groups with meritorious contributions to the company

- Criticize individuals/groups that adversely affect the company's

reputation

e Recruitment strategy of Vinamilk

- Employees are trained abroad

- Rejuvenate human resources to create innovation motivation

- Training both professionally and professionally

3 Information resource

The information system at Vinamilk is designed based on the integration of

ERP management solutions which integrate many different information technology solutions such as: Microsoft's solomon software, Oreal's CRM customer management solution and sales software of FPT

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This system ensures that information is circulated smoothly and timely between Vinamilk and its distributors For this system to work, Vinamilk has equipped each

distributor with a Palm 222, and many PDAs for sales staff These PDAs run on

point of sale software developed by FPT All information about promotional products as well as customer policies is transferred by Vinamilk to Paml machines, sales staff using PDAs can access information related to the day's goals as well as other information about products and promotions to convey to customers At the end of the day, all working results are transferred to Vinamilk's server This management method helps Vinamilk control the activities of distributors quickly and effectively With separate codes set for each distributor Vinamilk easily knows which distributors are selling effectively and even the products they are selling well