BACH KHOA UNIVERSITY

SCHOOL INDUSTRY MANAGEMENT

Vinamilk’s Manufacturing
System

Student’s name: Hoang Minh Bao Tran - 1652624

Phan Thanh Cao Nha - 1552256

Nguyen Ngoc Tuong Vi - 1652697

Lam Hong Le - 1552193

Subject: Manufacturing System

Professor: Dr. Duong Vo Hung

 Contents
I. Introduction.........................................................................................................................................1

II. Company overview..............................................................................................................................1

1. Introduction.........................................................................................................................................1

2. Vision..................................................................................................................................................2

3. Mission................................................................................................................................................2

4. Core value...........................................................................................................................................2

5. Business philosophy............................................................................................................................2

6. Vinamilk’s products............................................................................................................................3

III. Production process...........................................................................................................................3

1. Vinamilk’s production process............................................................................................................4

2. Advantages and disadvantages of process...........................................................................................9

IV. Production Planning........................................................................................................................9

V. Conclusion.........................................................................................................................................11
Manufacturing System

I. Introduction
Milk is known to be a complete and ideal food for a long time that provides many nutritional
values for society, enhances human health and intellect. The demand for milk is increasingly
focused and becomes the top concern of most people. Understanding this demand of consumers,
Vinamilk always performs the role of leading the supply of essential nutrients to millions of
Vietnamese people, thus helping to build a good image and a quality brand that always ensures
quantity and production process. This report is intended to provide an overview of the Vinamilk,
the analysis of the production system and the production planning in order to see the benefits and
limitations of the process, thereby providing a reasonable remedy.

There are 3 main purposes to do this report:

 To look overview about my subject – manufacturing system.
 To understand deeply what I have learnt (theory) and what happened in real life.
 To perform knowledge which I received after this subject.

II. Company overview

1. Introduction
Vinamilk which stands for Vietnam Diary Products Joint Stock Company, was established in
1976 as the state-owned Southern Coffee-Diary. According to the UN Development Program, it
is the 15th largest company in Vietnam in 2007. Vinamilk has dominated approximately 75% of
the milk market of our nation. In addition to the strong distribution network which spread
through 64 provinces with 183 distributions and 940000 points of sale, Vinamilk products are
also exported to other countries such as The United States, France, Canada, Poland, Germany,
and many more.

After almost 40 years of establishment and development, Vinamilk has become one of the
leading corporations in Vietnam, continuously contributing to the development and prosperity of
the country. Vinamilk's subordinate units, consisting of 3 branches, 13 factories, 2 warehouses,
and 3 subsidiaries, have always been creative and constantly striven to take the brand to new
heights

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2. Vision
“To become a world grade brand in food and beverage industry, where people put all their trust
in nutrient and health products.”

3. Mission
Vinamilk commits to deliver the valuable nutrition to community with our respect, love and
responsibility.

4. Core value
To become a world grade brand in food and beverage industry, where people put all their trust in
nutrient and health products.

- 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 respect the established ethical standards and act accordingly
- Ethics: To comply with legal regulations, the Company’s Code of Conduct, and the
Company’s procedures and policies.

5. Business philosophy
The quality, innovation, and consumer demand are Vinamilk's most important companions,
which are always prioritized on top. They act with customer-centered approach and commit to
respond to all their needs. These factors could help Vinamilk to become one of the most
favourite brands in every region and territory.

Picture 1. Vinamilk’s Philosophy

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6. Vinamilk’s products
- Liquid milk
 Including fresh, pasteurized, and UHT milk
 Main competitors: Dutch Lady
- Powdered milk
 Including powdered milk and nutrition powder
 Competitors: Dutch Lady, Abbott, Mead Johnson, Nutrifood, Dumex, Nestle
- Condensed milk
 Traditional products: Southern Star Sweetened Condensed Creamer, Longevity
Sweetened Condensed Milk.
 Competitors: Dutch Lady
- Vinamilk yogurt
 Including UHT Drinking Yogurt, Probiotic Drinking Yogurt, Spoon Yogurt
 Having various flavors
- Cheese and Ice-cream
 Ice- cream is offered with various flavors
 Cheese is produced from French production line and has very high nutritious value
 Main competitor: Kinh Do
- Healthy beverages:
 A strong brand which specializes in pure fruit juice, green tea, milk mixed fruit juice, soft
drinks, and soya-bean milk.
 Main competitors: Tan Hiep Phat, Tribecco

III. Production process

The production process refers to the stages (phases) required to complete a media product, from
the idea to the final master copy. The process can apply to any type of media production
including film, video, television and audio recording. The stages in each medium vary; for
example, there is obviously no storyboard in an audio recording. However the same general
concepts work for any medium.

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1. Vinamilk’s production process
Vinamilk continuously launches new breakthrough products to expand the market. This success
comes from modern, advanced production processes, following strict standards of the following
steps. Employees who directly and indirectly participate in the production process must meet
health, professional, capacity, professional and responsible requirements.

Firstly, at the breeding farm, VINAMILK selects the cows reaching the standard. After being
squeezed from the dairy farmer, fresh milk is quickly brought to the transfer station. At the
transfer station, the factory's quality control staff will conduct tests regularly at each morning and
afternoon to analyze the precipitation, taste sensation, microbiological criteria, fermentation acid
lactic. Company will not purchase milk that contain antibiotic residues for the purpose of
protecting the health of consumers.

Picture 2. Raw fresh milk receiving area

After going through quality check, measurement equipment and clarification, fresh milk will be
sampled and poured into a cold storage system (150 m3/s) at the transfer station. Milk samples
were coded and sealed before being transferred to the laboratory for analysis of dry matter, fat,
protein, sugar content and freezing point.

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 Picture 3. Cool tank
With the modern equipment, VINAMILK can detect and prevent most cases of adding strange
substances to milk (if any), the raw fresh milk will be processed through centrifugal bacteria
separation (which removes the harmful bacteria and microorganisms spores), assimilation,
pasteurization and get cooled down to 4 degree

Picture 4. Centrifugal bacteria separation machine

Then, the milk is transferred to a tank ready for UHT sterilization: Advanced Sterilization
System heats the milk up to 140 degree, then the milk is quickly cooled down to 25 degree that
contributes to retain the natural flavor and the nutritional components, vitamins and minerals of
the product.

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 Picture 5. UHT sterilization machine

Milk is transferred to a sterile container for sterilization and sterile packaging. Thanks to the
combination of advanced processing technology, UHT sterilization technology and sterile
extraction technology, the product can keep the taste fresh for 6 months without preservatives.

Picture 6. Filling system

Automatic LGV robots will move the finished-goods pallet to the smart warehouse area.

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 In addition, LGV also moves the packaging roll and packaging materials to other machines
automatically and recharge battery without human intervention. Then

Picture 7. Automatic LGV robots

The management of import and export goods is based on Wamas software. The operating system
is based on the Tetra Plant Master automation solution, which enables the integration of the
entire plant from raw material to finished products and provides all the necessary data that the
plant can continually improve its production activities and maintenance. Especially, Wamas
Warehouse Management System integrates ERP management system and Tetra Plant Master
automation solution that bringing about smoothness in the operation of the plant with activities
from production planning, raw materials to the finished product of the company.

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 Start
Picture 8. Wamas software and Tetra Plant Master automation

Select cow breed, bring engineer to guide farmers to raise

standards

After milking, the milk was

taken to the transfer station Not satisfactory with residue
No purchase
conducting the test analysis

Sampling into a cold storage tank

at the transfer station, coded by Not satisfactory No purchase
the symbol and sealed to analytical
laboratories

Take the amount of milk being tested into cold storage tank,
undergoing processing by modern equipment

Transfer to a container ready for processing in UHT

The LGV robot converts finished pallets to smart

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warehouse areas, transporting packages, packaging

Tetra Plant Master automation system integrates ERP to

 Finish

Picture 9. Overview by diagram

2. Advantages and disadvantages of process

a. Advantages
- The process is self-contained, applying modern technology and advanced machinery
Vinamilk's dairy production line possesses many technologies and machines such as centrifugal
separator, UHT sterilizer, LGV robot, Stacker Crane ... to ensure the "sterility" of milk, keep the
milk at highest quality.
- The harmonious combination of human factors and mechanical technology
Not only focus on machinery, human factor is also taken care when they do not entrust to the
farm in raising dairy cows but control from the input, select the standard cow, assign engineer to
guide people to how to raise dairy cows according to their standards.
- Strict controlling of the quality of output milk
Each step in the production process is checked, measured again after completion to ensure milk
quality
b. Disadvantages
Outsourcing: Depends on the supply of milk from the farm outside
c. Solution
Develop Vinamilk’s own dairy cow farms: Due to the fact that in their business, it is all about
the quality of milk, Vinamilk should shift to produce their own milk to control well the input
milk quality.

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IV. Production Planning
Production planning is the planning of production and manufacturing modules in a company or
industry. It utilizes the resource allocation of activities of employees, materials and production
capacity, in order to serve different customers.

Activity 1

Activity2
Farmers
Activity 3

Raw milk Retailers Customers

Processing Distribution
production ,stores

Imported raw
materials

: Product line

:Information line

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 : Cost line

Picture 10. Vinamilk’s Production Planning

Activity 1: Input supply of Vinamilk dairy company includes: imported and purchased raw
materials from cattle farmers and domestic cattle farms. Vinamilk gives priority to the selection
of raw materials, technology and equipment from areas with advanced agriculture, standards and
requirements for quality assurance and food safety. Material may be imported through
intermediaries or directly from the United States, New Zealand, and Europe and then shipped to
the factory. For raw materials purchased from farmer raising cattle, fresh raw milk must undergo
a rigorous quality inspection before being put into production through a milk collection station.
Milk purchased from farms must always meet the standards established by Vinamilk and
domestic dairy farms. Vinamilk is expected to continue importing premium breeds from
Australia and the USA to meet the needs of new breeders.

Activity 2: Processing, Vinamilk collects raw milk from dairy farms and buys powdered milk
from foreign partners (Fonterra, Hoogwegt…), then processes and packages for the various final
products.

Activity 3: Vinamilk distributes goods through Phu Thai Group to agents, stores and consumers
(the direct consumption of milk). Distribution Vinamilk has a strong and nationwide distribution
network. The strong channel development is partly attributable to its information technology tool
ERP which has helped switch the firm from wholesaler to retailer, manage its inventory more
precisely and improve its sale teams’ efficiency. The firm is now trying to expand its channel to
acquire more market share, especially in rural areas and small urban areas. Vinamilk products are
currently available in majority of supermarkets and retail outlets throughout Vietnam. With the
extensive distribution network, Vinamilk ensures that all customers in Vietnam can easily find and
purchase its products. Vinamilk products are also promoted in the most popular media and mass
communication channels. The advertisement films and images of Vinamilk products often have a playful
tone, vivid images, light colours and unique messages which are easy to remember and access to all the
senses of the customer, especially children.

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V. Conclusion
In the current trend of integration and competition, in order to gain the competitive advantage the
company needs to pay attention to technology investment in production not only for the quality
but also the productivity and output of the company. At the same time, Vinamilk should step up
its activities to save money on machinery and waste

References

 Saenger, C. et al., “Contract farming and smallholder incentives to produce high quality:
Experimental evidence from the Vietnamese dairy sector”, Agricultural Economics 44 (2013) 3,
297-308.
 Vinamilk Supply Chain Management Project - Van M. Vu. V V? Follow -
https://www.slideshare.net/ssuser17491c/vinamilk-supply-chain-management-project-van-m-vu?
fbclid=IwAR2NgX0qT3kEGyRELABXQ08HiWQ9IfZFhKhCi4znxHdDDEyQ6NJJxPYR5VY
 Yêu Cầu 1 Quy Trình Sản Xuất Sữa Tươi Tiệt Trùng Của Vinamilk 1 Giới Thiệu Về Công
Ty Cổ Phần Sữa Vinamilk Hoang Truyen - https://www.academia.edu/23938454/Y
%C3%8AU_C%E1%BA%A6U_1_QUY_TR%C3%8CNH_S%E1%BA%A2N_XU%E1%BA
%A4T_S%E1%BB%AEA_T%C6%AF%C6%A0I_TI%E1%BB%86T_TR%C3%99NG_C
%E1%BB%A6A_VINAMILK_1_GI%E1%BB%9AI_THI%E1%BB%86U_V%E1%BB%80_C
%C3%94NG_TY_C%E1%BB%94_PH%E1%BA%A6N_S%E1%BB%AEA_VINAMILK?
fbclid=IwAR39KbU_aZA7bR0tpof6cqv4bapn7pnOBmgJbbfnXJLLxouUSLio3_RjkqY
 Tiểu Luận: Công Tác Quản Trị Chiến Lược Tại Công Ty Sữa Vinamilk

https://tailieu.vn/doc/tieu-luan-cong-tac-quan-tri-chien-luoc-tai-cong-ty-sua-vinamilk-
454419.html.

 Production Planning, https://en.wikipedia.org/wiki/Production_planning

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 Vinamilk Dairy Product Catalog And Features Marketing Essay, Answers Ltd -
https://www.ukessays.com/essays/marketing/vinamilk-dairy-product-catalog-and-features-
marketing-essay.php?vref=1.

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