VIETNAM GENERAL CONFEDERATION OF LABOUR

TON DUC THANG UNIVERSITY

FACULTY OF BUSINESS ADMINISTRATION

LOGISTICS OPERATIONS OF VINAMILK

Mentor: Hà Kiều My

Class: 16070611

Group 03:

Ngô Minh Vũ - 71608200

Nguyễn Ngọc Bảo Thi – 71608119

Nguyễn Ngọc Tuyền– 71608141

Nguyễn Đức Thạch – 71608113

Nguyễn Kim Thùy Vân – 71608145

Nguyễn Thị Thúy Huyền –71608045

Nguyễn Thị Yến Nhi– 71608090

Nguyễn Chí Toàn – 71608128

Phạm Doãn Hòa– 71608036

Ho Chi Minh City, 9th December 2017

 LIST OF ABBREVIATIONS, TABLE AND FIGURES

 PICTURE:

Picture 1: Products of Vinamilk

Picture 2: The distribution channels

Picture 3: Scanning Barcode

 DIAGRAMS:

Diagram 2.1: Supply chain model of Vinamilk

Diagram 2.2: Inbound model of Vinamilk

Diagram 2.3: Outbound model of Vinamilk

Diagram 3.1: Information Flow

Diagram 3.2: Physical flow and the transfer of ownership

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 CONTENTS
Chapter 1 INTRODUCTION.................................................................................................................3
1.1. Information about company.........................................................................................................3
1.2. Development and Formation History...........................................................................................3
Chapter 2.....................................................................................................................................................3
SUPPLY CHAIN MODEL OF COMPANY VINAMILK'S MILK PRODUCTS.......................................3
2.1. INBOUNDS................................................................................................................................4
2.2. OUTBOUNDS.............................................................................................................................5
Chapter 3.....................................................................................................................................................6
VINAMILK’S CURRENT DISTRIBUTION CHANNELS.......................................................................6
3.1. The distribution channels.............................................................................................................6
3.1.1. General Trade – GT.............................................................................................................6
3.1.2. Modern Trade – MT............................................................................................................7
3.1.3. Key account – KA................................................................................................................7
3.1.4. Other channels: E - commerce and Export...........................................................................7
3.2. The flows in the distribution channels.........................................................................................8
3.2.1. Information flow..........................................................................................................................8
3.2.2. Physical flow and the transfer of ownership:...............................................................................8
Chapter 4...................................................................................................................................................10
ADVANTAGES AND LIMITATIONS IN LOGISTICS OF VINAMILK...............................................10
4.1. Advantages in Logistics of Vinamilk.........................................................................................10
4.2. Limitations in Logistics of Vinamilk.........................................................................................10
4.2.1. The first limitation.....................................................................................................................10
 Recommendation.......................................................................................................................11
4.2.2. The second limitation.................................................................................................................12
 Recommendation.......................................................................................................................12
Chapter 1 INTRODUCTION
Vietnam Dairy Products Joint Stock Company

1.1. Information about company

Vietnam Dairy Products Joint Stock Company (Vinamilk)
Address: No. 10, Tan Trao Street, Tan Phu Ward, District 7, HCMC
Phone: (028) 54 155 555
(028) 54 161 226
Wedsite: vinamilk@vinamilk.com.vn
1.2. Development and Formation History
- 1976: Vinamilk was established on August 20, 1976 on the basis of three dairy
factories from the old regime:
 Thong Nhat Dairy Factory (formerly known as Foremost factory).
 Truong Tho Dairy Factory (formerly known as Cosuvina factory).
 Dielac Powdered Milk Factory (formerly known as Nestlé factory (Swiss).
- 1985: Received the Third-Class Labor Medal
- 1991: Received the Second-Class Labor Medal
- 1996: Received the First-Class Labor Medal
- 1995: Inaugurated the first dairy factory in Hanoi
- 2000: Awarded the title “Labour Hero of the Renovation Process”
- 2001: Inaugurated Can Tho Dairy Factory
- 2003: Inaugurated Binh Dinh and Saigon Dairy Factory
- 2005: Inaugurated Nghe An Dairy Factory. Received the Independence Medal III
-2006: Inaugurated the first dairy farms in Tuyen Quang
- 2008: Inaugurated Tien Son Dairy Factory, Inauguration of the second dairy farm in
Binh Dinh
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- 2009: Environmentally Friendly Factory, Construction of Nghe An dairy farm
- 2010: International investment in New Zealand and over 20 other countries. Received
the Independence Medal II ,Construction of Thanh Hoa dairy farm
- 2012: Construction of the fifth dairy farm in Lam Dong. Inauguration of modern
factories
- 2013: Inaugurated the super dairy factory in Binh Duong, Commencement of new
dairy farm construction in Tay Ninh and Ha Tinh
- 2014: Vinamilk - 38 years of innovation and development
- 2015: Raised stake in Miraka Limited Company of New Zealand, Commencement of
Thong Nhat - Thanh Hoa dairy farm construction
- 2016: Vinamilk official launched its brand in Myanmar, Thailand, Inauguration of
Angkormilk dairy factory which was invested by Vinamilk, Vinamilk acquired 100%
stake in Driftwood Dairy Holding, Introduction of USDA certified premium Vinamilk
Organic Fresh Milk
 Field of production:
- Milk - Condensed Milk
- Vinamilk Yogurt - Ice Cream
- Powdered Milk - Chese
- Infant Cereals – Ridielac - Beverages
- Special Nutrition Products For - Soymilk
Adults

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 Chese Vinamilk Yogurt Fresh Milk Ice Cream Beverages

Powdered Milk Condensed Milk Soymilk

Picture 1: Products of Vinamilk (source: Vinamilk)

Chapter 2

SUPPLY CHAIN MODEL OF COMPANY VINAMILK'S

MILK PRODUCTS

: Physical flow

: Information flow

: Finance flow

Farmers,
cattle farms

Milk collection Distribu- Wholesalers/

5
Factories
fatories DC Distributors Consumers
center tors Retailers
Milk’s
Milk’s material
material
import Consumers
import

Diagram 2.1: Supply chain model of Vinamilk

(Source: Supply Chain Management Forum)

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2.1 INBOUNDS

Supply Trucking Storage

Trucking
Factory
source
Airlines

Ha Noi Domestic:
13
Other
City
Ho Chi New Zealand,
Minh USA,
Combodia

Supply source

Domestic Import

Fresh milk Second Machines and Other

Grass Cow
materials equipment materials

Vinamilk's Tuyen United

Lam Son
dairy farm Sugar Quang Australia Germany States
Local's
Quang New
dairy United
Ngai ... Italy Zealand
farm Sugar
States

… Switzerland Europe

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Diagram 2.2: Inbound model of Vinamilk(Source: Supply Chain Management Forum)

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 2.1 OUTBOUNDS

Warehouse
Transport by management Customer
system service
Tank truck automatically
go through 2 transit station

Feedback

Shipping
Product
Production Packaging Distribution Consumer
storage

Tetra Pak Technology

Foreign market Domestic market

GT MT
Bottle
Paper Distributors Supermarket system
box Plastic Cup
Plastic Metal
box bag box
Retailers/Wholesalers

Use the distribution channel system

Diagram 2.3: Outbounds model of Vinamilk

(Source: Supply Chain Management Forum)

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 Chapter 3

VINAMILK’S CURRENT DISTRIBUTION CHANNELS

3.1. The distribution channels

Picture 2: The distribution channels (Source: Vinamilk)

3.1.1. General Trade – GT

220 independent distributors and more than 140,000 retail outlets:

Manufacturers  distributors  wholesalers  retailers  consumers

Products from factories are dealt out to distributors. Then, they provide products for
wholesalers (lever 1, 2,3 ,..) and the wholesalers bring them to retailers (markets,
groceries,…). This is the main distribution channel of Vinamilk which distribute 80%
of revenue. Therefore, Vinamilk require that the distributors must have many
criterions, such as: coverage, revenue, inventory, salesmen, infrastructure, finance,
competitive capacity, location,… Distributors have responsibility for providing
products for the lower distributors in their area. To be the Vinamilk distribution,
distributors must commit to some terms and conditions such as: do not display or
distribute other dairy products.

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 3.1.2. Modern Trade – MT
Producers  Supermarkets

Products are directly distributed to modern retailers, including supermarkets,

convenience stores,… and the customers will buy products from them. Vinamilk’s
products are being sold at 650 supermarkets around Vietnam, especially supermarkets
in the big provinces and cities.

3.1.3. Key account – KA

Key Accounts are restaurants, hotels, schools, companies,… They order a large of
number of the products from Vinamilk.

The distribution and selling network of the company is an essential element that leads
to the success of the company in ensuring that their new products are brought to
customers.

3.1.4. Other channels: E - commerce and Export

Vinamilk has a team to delivery to the distribution centers, and they hire other parties
when the goods is overloaded to provide their products for customers right time.

At the present, Vinamilk has 16 factories: 13 factories in Vietnam and 3 factories in

USA, New Zealand and Cambodia. More than 7 billion diary products are to serve
customers around country every year. Vinamilk’s products are present at 43 countries
around the world.

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 3.2. The flows in the distribution channels

3.2.1. Information flow

Supermarkets
ERP
Vinamilk Salesmen & Key Customers
( Enterprise accounts
Resouce
Planning)

Fax – Telephone

(Customer Service)

Diagram 3.1: Information Flow

For supermarkets and Key accounts, information is transferred directly from Vinamilk
to these members through the telephone/fax system or through the sales staff, and
finally to the consumers and vice versa.

The information system in Vinamilk is based on the integrated ERP management

solution, which integrates various information technology solutions such as Oreal
CRM customer management solution and Viettel sale software.

3.2.1. Physical flow and the transfer of ownership:

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 Vinamilk

DC

E - Commerce MT Key accounts GT Export

Diagram 3.2: Physical flow and the transfer of ownership

Customer

In order to delivery the goods to the customers in an efficient and convenient way,
Vinamilk has established a logistics enterprise which is responsible for the goods
delivery.

In MT channels, through Vinamilk’s logistics enterprise, the goods is delivered directly

from warehouses to supermarkets or key accounts and, finally, to customers.

In GT channels, through the logistics enterprise, the goods are delivered to the
distributors to the small agent outlets and then to the end customer.

When the goods are delivered to the chanel’s members, the ownership of goods is also
transfer to them.

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 Chapter 4

ADVANTAGES AND LIMITATIONS IN LOGISTICS OF

VINAMILK
4.1. Advantages in Logistics of Vinamilk
- Demand forecast of Vinamilk is 90%.
Vinamilk can forecast exactly the demand of the market so they know how
many products they should make and they don’t have inventories. Demand
forecast help Vinamilk to have right plans in the future.
- Vinamilk can bring their products to customers on time in full thanks to the
distribution network which stretch out from the North to South of the country.
- Vinamilk’s automatic warehouse is the most modern in Vietnam. This
warehouse helps Vinamilk to utilize the space optimally, decrease cost of the
labor and improve productivity.
4.2. Limitations in Logistics of Vinamilk
4.2.1. The first limitation
- Limitation: Damages to goods (especially yogurt) is easily occured during the
loading and unloading process from manufacturers to distributors
- Reason: Careless while loading and unloading the goods could make the box shocked
which leads to the affection to quality and/or quantity of yogust/milk. Here are some
examples for the careless :
o Careless while moving the goods.
o Overlapping too many boxes.
o Rugged road.
o Misunderstanding the guidance in loading and preservation of the goods.

- Consequence:
o Losing the faith (to the product’s quality and the brand of Vinamilk) of
customers.
o Causing the loss of the revenue and profit of the company.

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 In order to improve the situation, it is necessary to:
Solutions Performer How to perform Advantages Limited
- Depend on
They can
- Training staff on how to the
control the
arrange/loading/unloading awareness of
Training Human handling of
the goods properly. individual-
Staffs resources goods more
- Traning about the meaning ly.
department carefully and
of guidance label on the - High cost.
professionally.
cactons. - Time
consuming.
- Marking or labeling the High cost
cartons which have special
transport requirements in
order to ensure safety for
goods.

Customer Care
to meet the
needs of
customers.Be
Right SideUp sides,
Strengthen
Design Production
the carton to
Carton department
prevent the
goods from
avoid direct damaging by
sunlight collisions.
- The number of layers, the
type of paper, and especially
the paper material will
determine the hardness of the
carton.
- Therefore, the choice of
paper structure is suitable and
can meet the bearing
capacity, saving cost and
increasing the beauty of the
product.
- Now, Vinamilk is using E
15
 flute single wall We
recommend to use B flute
single wall instead

4.2.2. The second limitation

- Limitation: Can not control the exact time when the goods are delivered to the
customer (K.A)

- Reason: Due to the weather condition or personal problems of the driver, the
deliveries might be delayed. Meanwhile, whether the deliveries are completed or not
is recored, reported and certificated by the drivers (for Vinamilk’s vehicles) or
coordinators (for cars hiring from outside services). This leads to a fact that Vinamilk
could not identify whether the drivers deliver to key accounts at the right time or not.
Futhermore, the company only consolidate and verify all delivery receipt once a
month.

- Consequences:
o Affecting the prestige of the brand
o Causing the loss of the revenue and profit of the company.

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 o Creating the opportunities for competitors: For example, when customers
need Vinamilk’s products which are out of stock, they would choice the
replacement from products which are the same type but are belonged to the
other brand (the competitor’s brands).

 Here are solutions that could improve the limitation above

Solutions Performer How to perform Advantages Limited

- Training new drivers
from the beginning to Make them be
create good habits. more responsible
Training carefully for in the work and
- Depend on
those who have always put the
the
worked for a long interests of
Re-train the awareness of
Logistics time. customers in the
driver individual-ly.
Manager - Encouraging the first place which
- High cost.
driver with both will creates the
- Time
material and spirit so trust for
consuming.
that they can Vinamilk’s
wholeheartedly take brand.
responsibility while
working.
The task of the market
- Need to hire
surveillance team is to
more staff
determine accurately
which leads
the time when the
Can control the to more cost.
Coordinate driver delivers the
delivery time - Market
the market goods to the customer
Company and customer surveillance
surveillance and to monitor the
care team may be
team market, to receive
in collusion
feedback from the
with the
customers and finally
driver.
to report to the
company.
Make a Company - The company will - Easily control Additional
membership give a card to each the information costs for
card for the customer with a of the customer. purchasing
customer separate card code for - Control the the device.
each person. quantity and
- After the car arrives quality of
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 delivered goods
at the customer's
and delivery
location, the car will
time.
be unpacked and the
- Ensuring the
driver will use the
company's
barcode reader (wedge
reputation with
scanner) to check the
customers.
customer's code.

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