ACKNOWLEDGEMENT First and foremost, I would like to give my sincerest gratitude University of Foreign Languages and Information Technology (HUFLIT) for offering the great program of International Business Administration and to professors of HUFLIT university who have taught and provided me necessary and valuable knowledge and skills during four years Especially, I would like to say thank to the head and dean of Department of International Business Administration of HUFLIT having given me a chance to conduct this research I am deeply indebted to my supervisor Prof MBA Nguyen Tan Thu Hien, who has supported me through my paper with full of her enthusiasm and whole heart She has provided me a lot of necessary knowledge and skills and experience to conduct and finish the paper successfully Also, she has guided me, continually given feedback, pointed me in the right direction and always pushed me to do better Also, I would like to thank all staff of VIFON company who gave me very good conditions and contribute opinions as well as supply necessary documents to finish this paper Finally, I would like to give my special thanks to my family and my friends who help and encourage me to finish this paper July 2014 Đào Phương Thảo 1 ADVISOR’S COMMENT 2 COMMENTATOR’S ASSESSMENT 3 ABSTRACT Manufacturing industry is a key economics sector contributing to income of a country In the past, business traditionally produces in the batch and queue leading to many wastes during the manufacturing process such as waste of inventory, waste of waiting, waste of overproduction, waste of motion, waste of transportation, waste of over processing, waste of creativity, waste of defects and correction A considerable point is that most companies commonly have not recognized those wastes and let them occur for several years Even some companies apply some international standard like ISO, wastes still occur Some managers do not know these wastes, some identify but do not know how to eliminate them Waste is one of the most headache problems for managers Therefore, one of the most important tasks of all managers and supervisors in the manufacturing process is to identify wastes and to give solutions to eliminate them However, waste elimination is not simple One of the prominent answers for the concern of manufacturing business for reducing wastes is Lean tools application Lean is a continuous improvement which would help business to produce products with highest quality, lowest cost, shortest lead time by eliminating wasted time and activities It can be applied in not only manufacturing process but also in the offices The graduation paper would like to provide some based Lean theories How Lean tools can be applied in VIFON instant noodle manufacturing process In particular, the current situation of the manufacturing process is analyzed and wastes identification during the manufacturing process of VIFON company would be pointed out Then, some Lean tools are suggested to reduce waste, the required conditions for VIFON when applying Lean tools and some steps needed to conduct Lean application VIFON manufacturing process is now working effectively However, for the further success of VIFON, this paper gives some solutions 4 CONTENTS 5 LIST OF FINGURES Order 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Figures Figure 1: The researching process of the author Figure 1.1: Lean principle Picture 1.2: Toyota production system Figure 1.2: Five S process Figure 1.3: Visual management triangle Picture 1.2: How much is waste Figure 2.1: VIFON structure Figure 3.1: VIFON instant noodle manufacturing process Figure 3.2: Requirement of step 3_ Flour flattened into sheets Figure 3.3: Density of the flour layer Figure 3.4: Requirements of noodle steaming Figure 3.5: Requirements of step 5_ Quantitative cut and douse with soup Figure 3.5: Technical requirements of step 7_ Fry and cool Figure 3.5: Requirements of packaging Figure 4.1: Some suggested signals Page 3 10 11 15 21 28 35 39 41 43 43 45 49 50 67 6 Introduction INTRODUCTION 1 Thesis statement Nowadays, efficiency is required for the survival of company especially in manufacturing However, a great number of companies are facing many problems with their process leading to a big waste of money, time, people and efforts Consequently, it is essential for companies to improve their process to be more competitive in the market and to provide the best products and services to their customers Actually, one of the most considerable points is to reduce wastes Company commonly faces with 8 main wastes including overproduction, waiting, transportation, inventory, over processing, motion, detects and creativity By reducing those wastes, it would work more efficiently Capturing the demand of wastes reduction, Lean was created by TOYOTA_ a famous Japanese automobile manufacturer Lean manufacturing or Lean production is considered to be one of the effective business tools to achieve more profitable output with less input by continually eliminating non-value added activities, wastes, increase productivity and reducing working time to increase competitiveness The purpose of Lean is to create the same amount of output with less input, less working time, less space, less labor force, less machine, less material and less expense Realizing the benefits of Lean manufacturing, many businesses in the world are applying Lean in their company A prominent example of Lean implementation is TOYOTA production system Lean helps it to be one of the biggest automobile manufacturing firm in the world competing with General Motor and Ford Also, some Vietnamese companies have applied Lean in manufacturing process and achieve considerable results like TOYOTA Ben Thanh, Nike Vietnam, Minh Phu seafood, Thien Long pen, Bitis shoes… All things considered, the topic “Lean deployment to improve the manufacturing process of VIFON company” is conducted as a suggestion to eliminate wastes; therefore, to reduce costs, to create a comparative advantage for company to enhance profit, and to get more share in the market 7 Introduction 2 Research paper objectives The purpose of this paper is to study some Lean theories including definition, Lean tools, wastes and clarify the advantages of Lean application in a business The study also aims to investigate wastes and some Lean tools to reduce wastes and to increase the production efficiency Besides, after capturing an overview of VIFON company’s current manufacturing process situation during the internship period, wastes are considered through the whole manufacturing process of company Solutions to reduce wastes to improve the manufacturing process are developed Then, based on Lean philosophy, some lean’s techniques including Value Stream Mapping, Work Standardization, Kaizen, Visual management are considered to apply in the process aiming to eliminate wastes, to reduce costs and to enhance the competitiveness of VIFON in the market This paper is attempted to answer the main research question: “How can Lean application help VIFON eliminate wastes to improve its manufacturing process?” In order to find the best answer for the main research question, some sub-questions are raised including: 1 2 3 4 5 6 What is Lean? What are Lean principles? What are Lean tools? What are benefits of Lean in manufacturing process? What are main wastes in manufacturing process? What are some Lean tools suggested to implement in VIFON instant noodle manufacturing process? 7 What is the current situation of manufacturing process of VIFON company? 8 What are some steps to apply Lean tools in VIFON manufacturing process? 9 What are some conditions for VIFON to apply Lean tools in the manufacturing process? 10 What are some expected results for Lean deployment in VIFON manufacturing process? 3 Scope of the research 8 Introduction Waste elimination and Lean tools is a complicated subject that cannot be studied in short time Due to the limited ability, time and distance, this study cannot analyze all issues of waste reduction and Lean tools It concentrates on some common Lean tools and some certain wastes in the current situation of VIFON manufacturing process VIFON factory produces not only noodle but also other products such as chilly sauces, soya sauces, spice and rice instant noodle The author just focuses on the noodle manufacturing process 4 Methodology The purpose of this research was to capture the big picture of VIFON company then recommend the Lean implementation to the manufacturing process of VIFON company to eliminate wastes and increase profits Based on Lean philosophy, some Lean tools were suggested to apply to the manufacturing process of company Many procedures for this study have been chosen to meet each part of the study’s objective The subject of the paper was the manufacturing process of VIFON company In order to fulfill the aim of the thesis, a general outline concerning how to undertake the research was conducted with following steps: Problem formulation Data collection Internet Books Internship Data analysis Figure 1.1: The researching process of the author Source: From the ideas of the author In particular, the research process is described as follow: 9 Introduction Step 1: Problem formulation First, a brief literature review on the Vietnam’s business in supply chain field and the Lean philosophy was conducted in order to acquire basic knowledge of this research specialized field This was done to structure, shape and define the research problem, limitation, purpose, research questions and proposal outline for the paper In order to give out the proposal for the paper, basic theories of Lean were required to understand the researches Many books and Website were read to get an overview of Lean including its definition, Lean tools, wastes, etc This helps the researcher answer the questions 1) What is Lean? 2) What are Lean tools? 3) What are benefits of Lean? 4) What are main wastes in manufacturing? Second, the research was written as a theoretical thesis and it was based on a systematic literature review Literature review included some previous researches of Lean assumed to be relevant for the subject under study The literature source was mostly identified from wide information range of Internet and some books in Lean field This provided the leading citation databases covering thousands of researches worldwide Some previous researches and studies about Lean field were chosen as a perfect example for Lean application in manufacturing for reducing wastes Some of them were the researches of companies for the plans and results of Lean deployment in their companies Some were the graduation paper of Bachelors or Masters of Economics Step 2: Data collection Most data of this research were secondary data Data were collected from many sources such as Internet, books, magazines and internship − From Internet Lean was not a new technical term; however, it was not familiar in Vietnam It was hard to find much information in Vietnam As Lean was a foreign managerial tool, its application and theories from foreign countries were much wider Thus, it was better to collect data and information from Internet The based theories including Lean definition, Lean tools, wastes in manufacturing process, benefits of Lean, how to apply Lean, conditions to apply Lean were referred to Internet Also, some previous researches were collected from Internet − From books Some books were read to give a strong base for the researcher to conduct her research The most prominent books mostly giving her knowledge in this field and 10 Chapter 4: Suggestions to improve VIFON manufacturing process Lean manufacturing includes the minimization or near elimination of storage time for incoming materials and outgoing products Implementing a just-in-time ordering system is necessary to ensure that raw materials are constantly coming in at the perfect rate to meet operational demand This requires close coordination with suppliers, even going as far as integrating automated ordering and order-fulfillment systems between two companies This kind of close operational cooperation can introduce a host of issues, since project managers in both companies must coordinate with each other while managing their own side of the implementation project The same can be true on the outgoing end, as well Serving business customers with just-in-time ordering systems can require business to act as a just-intime supplier, filling orders frequently and automatically 4.3.5 Equipment condition Since the popularity of Lean Manufacturing grows, more and more tools have become available that help facilitate these concepts Some equipment naturally encourages "Lean" and prevents wasteful actions and processes Examples of this are things like: • Workbenches where product is built on moving carts (or pallets) that limit work- in-process and encourage 1-piece flow • Small work surfaces that limit space for unwanted sub-assemblies or clutter which encourages 5 S's • Flow racks that enable first in, first out (FIFO) inventory • Some Kanban card and boxes • The Andon system equipment • Some visual tables, televisions, boards… for the visual management control • Some extra folk lifts and pallets 4.3.6 Working place design and technology Design and technology are two other major causes of waste In brownfield plants that have been in operation for many years, it’s not uncommon to find equipment that is obsolete with regard to both design and technology Such equipment can operate wastefully in terms of availability, quality, throughput and efficiency, much 82 Chapter 4: Suggestions to improve VIFON manufacturing process like those in poor mechanical condition Improving/upgrading equipment design/technology is an engineering problem requiring technical analysis and designed experimentation Lean manufacturing can require a significant upfront investment in technology, from new production systems to statistical analysis software for monitoring quality improvement on assembly lines Choosing the right systems is crucial for success as a lean manufacturer 4.4 The size of Lean conduction Small application in a part or a line is preferred to mass application to all parts of factory in order to avoid risk 4.5 Application time Lean requires a long and stable period with full of effort, commitment and unity of everyone in the business Besides, new idea generation, continuous improvement is necessary to implement Lean It is suggested VIFON to firstly apply Lean manufacturing process in short-term Then, company should evaluate the results whether it is efficient After that, long-term Lean manufacturing can be implemented in the whole process 4.6 Expected results Lean deployment in VIFON manufacturing process is expected to bring much benefit and risk First, one of the prominent achievement of Lean tools deployment is reducing wastes including waste of overproduction, waste of inventory, waste of waiting, waste of motion, waste of transportation, waste of defect and correction, waste of creativity Thus, company can utilize all of its resources, labors and time to give the highest profit to company Second, Lean would help to increase worker responsibility of the whole manufacturing process in general and of his tasks in particular Lean manufacturing 83 Chapter 4: Suggestions to improve VIFON manufacturing process aims to involve every member of the manufacturing process in; thus, he would have his own responsibility If he does not complete his task, he could not achieve his target In one-single flow, all the mistakes of workers are identified and he would try his best to correct the mistakes because this is his working results Total maintenance production and 5S could enhance to self-awareness of workers to keep the working station clean and neat Furthermore, waste reduction can decrease many extra unnecessary costs Workers doing non-value added activities would be eliminated Cost of overproduction, work-in-process and finished product transportation, warehousing storage can be eliminated Fourth, Lean tools would reduce lead time and bottleneck of the manufacturing process The waiting time and the time for correcting the defect of product, time of changeover between each stage can be eliminated by Lean tools And the one singlepiece flow can contribute to create the continuous flow and minimize the bottleneck Fifth, working in a comfortable environment and having chance to freely raise ideas to the development of company especially the manufacturing process, worker would fully contribute his effort to complete his tasks This can be achieved when applying Kaizen Next, Lean tools application lets to managerial executives and supervisors and all employees work professionally Last but not least, the longevity of the machine would increase and reduce the cost of fixing machine of the company apply 5S and Total productive maintenance Cost or machine, equipment can lower bringing higher profit for company One considered thing is that Lean deployment result cannot be seen in short-term, it must be continuously done for long-term with full of patience and effort However, Lean might bring much risk to company Some people would not agree Lean deployment because of it would affect to their benefit The corporate culture 84 Chapter 4: Suggestions to improve VIFON manufacturing process does not match with Lean spirit And discontinuous and not deeply understanding Lean application could destroy all the effort of building a Lean organization Therefore, in the initial stage, company should ask the consult and guidance from a Lean expert agency for having an overview of Lean tools to decide whether company should apply Lean or not 85 Conclusion CONCLUSION Lean is a management tool for many economics sectors Lean application needs time and scientific methods to achieve the best results making improvement in the business activities Lean application brings benefit to conductor The working environment is more comfortable and cleaner, the working spirit and the worker responsibility steadily increase, inventory control is better, the bottleneck is reduced, defect is limited The most prominent achievement is step by step increase the productivity of workers and quality of products However, Lean application requires continuous action It must be the objective of all workers in company Therefore, it is necessary for every member of company to highlight the benefits of company and have self-discipline to complete the manufacturing management of company Besides, the controllers must give workers the best condition for working and improving their skills Furthermore, company should regularly update the new technology for improving the productivity and quality of products VIFON is a successful company in the instant noodle manufacturing field However, some wastes are identified during its process Waste of overproduction, waste of defects and correction, waste of motion, waste of waiting, waste of transportation, waste of creativity, waste of inventory are identified in VIFON manufacturing process Some of them are tangible wastes; however, some are intangible wastes that cannot easily recognize such as waste of creativity, waste of motion Waste leads to many consequences And the prominent consequences are reducing the product quality, increasing the costs and lead time However, these wastes cause from the avoidable reasons Some suitable Lean tools are suggested to eliminate the above wastes to improve the manufacturing process To conduct these Lean tools effectively, some steps is needed to follow and some required conditions should be ensured Some expected results are mentioned as a motivation and consideration for VIFON to decide whether to apply Lean tools or not to improve its manufacturing process 86 Reflection REFLECTION During 3 months of conducting this paper, it requires a highly concentration and hard-working The paper not only affects to my attitude toward working, learning and living but also provides me lots of valuable skills, knowledge and experience First, this paper partly changes my attitude toward working, learning and living concept Lean means finding the most effective approaches to eliminating wastes in the working environment Turning back to my life, since I was familiar with Lean concept, I am “Leaner” I always think of how to reduce wastes when working, what are causes of these wastes and the solutions to minimize these wastes I realize my disadvantages and wastes in my life; then eliminate them and improve my strengths For instance, typing, I usually push right click for copy and paste every information and folder My left hand is not used Instead, I used only right hand for both actions, which is a waste of time Lean has changed my typing habit I push the right click for the copy and use my left hand (Ctrl+V) for paste the information or folder Also, I am more discipline when working with my supervisor From my point of view, she was very kind and honest She guided, pushed and gave me much skills, knowledge and experience with full of her heart I received lots of things from her And I feel responsible for giving other people who need my supports Furthermore, Lean has inspired me to work in supply chain field to eliminate wastes, reduce cost and increase profit for company Supply chain field is really interesting and can develop my potential ability and help me to be more active Next, some of my skills are improved during the paper conducting period In the past, my reading skill is not good To find ideas and materials for this paper, I had to read many information sources Most of them are English Because of my limited ability, I sometimes did not understand all of the materials However, I tried my best and spent more time on looking up the unknown words in the dictionary and in the Internet Day by day, my reading skill is better I can read with faster speed Skimming and finding the key ideas is easier for me After that, I can shorten the 87 Reflection reading time and read more documents In addition, my supervisor guided me researching skills and how to present a graduation paper including some required sections contributing to strongly prove for my opinions to increase the value of my paper Most of the information source of my paper is from Internet; so, this helps me increase my skills of how to search information from the Internet After finding information, analyzing skill is necessary Therefore, although I am not excellent at logical thinking, my analyzing skill is improved and my thought is deeper after conducting the paper When realizing wastes in VIFON manufacturing process, wastes were analyzed by using Ishikawa diagram Also, my time management skill is increased I planned a timeline for each sections of my paper This helps me work more scientifically Third, I am learned a lot of knowledge and experience when conducting the paper Lean theories such as its definition, Lean tools, benefits, wastes increases my knowledge of management and supply chain field The internship in VIFON company brings me many benefits I have known backgrounds of company and the company working environment Before conducting this paper, I had not known anything about the instant noodle manufacturing process After the internship, I learnt the instant noodle manufacturing process It is great with modern machines and nice noodle fibre and many employees The supervisor in VIFON company was very kind He supported me, answered to most of my questions and gave me some documents of company Also, he shared me some management skills which are valuable for me in my future jobs Furthermore, my advisor has given me a lot of knowledge and experience She shared me her expert of not only supply chain knowledge especially Lean tools in manufacturing but also knowledge in the other fields such as human resource, management, research and etc All things considered, my paper conduction brings me many benefits I have accumulated a lot of skills, knowledge and experience Also, my behavior and view is better Research is very helpful for every student Although it costs me time and effort, I receive more than what I had paid for 88 References REFERRENCES 1 CICC, 2013 Leansigma Continuous Improvement Control Company Available from: http://www.leansigmavn.com/?p=1258 [Assessed from 25th November 2013] 2 Dr Bijay Nayak, 2009 Lean manufacturing and Value Management Convergence of Divergent Tools Manufacturing SAVE International company Available from:http://www.value-eng.org/knowledge_bank/attachments/200629.pdf [Assessed from 5th November] 3 Folk, 2009 Lean manufacturing Folk company Available from: http://www.folkgroup.com/leanmanufacturing.pdf [Assessed from 21th November 2013] James P Womack and Daniel T Jones (2003), Lean Thinking: Banish Waste 4 and Create Wealth In Your Corporation, New York: Free Press 5 Jeffrey K Linker (2004), THE TOYOTA WAY: 14 Management Principles From The World’s Greatest Manufacturer, New York: McGraw Hill company Inc 6 Juan C Tinoco, 2004 Implementation of Lean Manufacturing University of Wisconsin-Stout Available from: http://www2.uwstout.edu/content/lib/thesis/2004/2004tinocoj.pdf [Assessed: 27th November 2013] 7 Khalil A El-Namrouty, Mohammed S AbuShaaban Seven Wastes Elimination Targeted by Lean Manufacturing Case Study “Gaza Strip Manufacturing Firms” International Journal of Economics, Finance and Management Sciences Vol 1, No 2, 2013, pp 68-80 Available from: http://www.lean.org/fusetalk/forum/messageview.cfm? catid=72&threadid=6581[Assesed: 15th December 2013] 8 Malcolm Akugizibwe, February 2013 Lean Survey Sheffield Hallam University Available from: http://www.lean.org/FuseTalk/Forum/Attachments/Lean %20Survey%20-%20Alex%20Malcolm%20Akugizibwe.docx [Assessed from 20th November 2013] 9 Managene, 2013 Lean manufacturing Managene company Available from: http://www.managene.vn/vn/tin-bai/7-tin-bai/48-lean-manufacturing.html [Assessed from 5th November 2013] 89 References 10 Pascal Dennis (2010), The Remedy: Bringing Lean Thinking Out of The Factory to Transform The Entire Organization, New Jersey: Lean Production Network 11 Peter Hines, Pauline Found, Gary Griffiths and Richard Harrison (2008), Staying Lean, Cardiff: Lean Enterprise Research center (Cardiff University) 12 Rikard Larsson and Emma Weserberg, 2009 Applying Lean in Haulers’ Operations Chalmer university of Technology, Sweden Available from: http://www.leanforum.se/x_jobb/LarssonandWesterberg_xjobb.pdf [Assessed: 13th January 2014] 13 Rodney S Rogstad,2010 Implementing Lean Manufacturing Principles in a Manufacturing Environmen University of Wisconsin-Stout Available from: http://www.epa.gov/lean/environment/pdf/perfection.pdf[Assesed: 5th January 2014] 14 Toyota Ben Thanh, (2013), Citing Online Source, URL: http://www.toyotabenthanh-hcm.com/?pge=views&sho=289&sid=289&cn (Accessed 1 March, 2014] 15 VIFON (2010), Citing Online Source URL: http://www.vifon.com.vn/Default_en.aspx# [ Accessed 15 December, 2013] 90 Appendix APPENDIX 1 VIFON achievement 91 Appendix 2 VIFON products 92