OPEN UNIVERSITY OF HOCHIMINH CITY UNIVERSITEÙ LIBRE DE BRUXELLES SOLVAY BUSINESS SCHOOL PROGRAM ON MASTER OF MANAGEMENT (MMVCFB6) NGUYEÃN VAÊN VINH SOME STRATEGIC SOLUTIONS TO DEVELOP LOGISTICS SERVICES AT “SOTRANS LOGISTICS” IN THE PERIOD 2006 -2010. THESIS OF MASTER OF MANAGEMENT Advisor: Dr. Nguyen Van Son HOCHIMINH CITY (2007) “I confirm that this is my work. Any data, result or quote in the thesis are clearly identified” Nguyen Van Vinh i ABSTRACT The trend of internationalization in economic activities has more rapidly increased, trade relations among countries have continuously developed in all fields. Serving these relations, many services industries appear accompany to the development of international trade activities including forwarding and logistics services. Although forwarding activity has appeared for long time, but the concept of Logistics service has just appeared in recent years, a forwarding company with large or small size has some problems to be considered. Because the development is accompanied to fierce competition, always has customers with higher and higher demands, always asks for something new. How are these problems solved? and how the company can be survived in this competition ? That is the reason why it is necessary to study this theme. Form that point of view, an understanding about the logistics services in Viet Nam , using SOTRANS LOGISTICS as an example, is necessary. This research investigates logistics services service at SOTRANS LOGISTICS and some strategic solutions to push up this services are then presented in order to improve the company ‘s performance in further . In this paper, some recommendations for the government and concerned authorities are suggested with the hope that logistics services will be more developed and get more profits for the country in the further. ii ACKNOWLEDGEMENT This Master thesis represents the essence of our achievements during two years in studying at MMVCFB6. During this period there have been many peoples who has inspired and guided us through the works with the thesis. We would first like to express my profound gratitude to Dr. Nguyen Van Son - Research advisor - for his precious guidance, constructive comments, explicit direction and encouragement and everlasting enthusiastic support throughout the research period. My acknowledgements are due to MMVCFB – the Vietnamese and Belgium Master Program, Vietnamese Professors and Belgium Professors of the program from Solvay Business School and who gave me a great chance to obtain valuable knowledge and long term relations. My sincere thanks are also extended to SOTRANS LOGISTICS and our colleagues who accompanied us during our works, and made this time memorable. Thank all MMVCFB6 members and the faculty of the Hochiminh City Open University for their help. Last, but no least, Thanks to all our family, my parents, my lovely wife, my daughter for their love and understanding during my study wherever we are you are always with us. iii COMMENTS OF THE ADVISOR Commentator : PhD. Nguyen Van Son, study consultant. This is the comment on the thesis of the student as Mr.Nguyen Van Vinh – Major: Master of Management. Thesis title :” Some strategic solutions to develop logistics services at “Sotrans Logistics” in the period 2006-2010”. COMMENTS 1. Comment of the thesis : The thesis is practically efficient for its restructure to modernize the operation of Sotrans Logistics ( and system of Sotrans Company ) . The author defines the right research objectives, applies suitable study methods as well as its outline The research contains many good new, creative and scientific matters. It appraises the real situation logistics activities of Sotrans Logistics reasonably as well as shows out good and weak points of this enterprise. As per the appraisement, the writer suggests persuadable and feasible solutions that may be applied to Sotrans Logistics in particular and any logistics services enterprises in Vietnam in general. However, the thesis has not avoid some weak points as some unclear and non-detailed solutions. For example, some solutions of co-working iv between subsidiaries of Sotrans Company to develop its strength are not concretized for immediate application. Generally, this thesis may be considered as meeting well requirements about format and contents of an MBA thesis. 2. Comments about the students : The student – Nguyn Vn Vinh shows his devoted in studying, his creative abilities on the scientific research and to be recognized as Master of Management degree. I agreed to allow the student - Nguyn Vn Vinh to represent this thesis on Examining Panel at Ho Chi Minh Open University and Solvay Business School / University Libre of Bruxelles. Ho Chi Minh city, Febuary 12 th 2007 THE ADVISOR Doctror . NGUYN VN SN v COMMENT OF CRITICAL PROFESSOR 1 vi COMMENT OF CRITICAL PROFESSOR 2 vii TABLE OF CONTENTS ABSTRACT i ACKNOWLEDGMENT ii INTRODUCTION iii TABLE OF CONTENT VI LIST OF CHARTS XII LIST OF FIGURES XIII CHAPTER 1 BASIS AND REALITY ON LOGISTICS OVERVIEW 1.1 General view about Logistics 1 1.1.1 Concepts and roll of Logistics 1 1.1.1.1 Overview developing situation about modern Logistics 1 1.1.1.2 Logistics concepts 7 1.1.1.3 Logistics concept according to the author 8 1.1.1.4 The role of Logistics 9 1.1.2 Overview about operations of Logistics Services Provider (LSP) 10 1.1.2.1 Logistics Services Provider (LSP) 10 1.1.2.2 Services provided by LSP 10 1.1.3 Classification of Logistics companies 13 1.1.4 Tendency to use Logistics service in the world 15 1.1.4.1 Tendency to rent outside Logistics services 15 1.1.4.2 Customer tendency to control orders on-line 17 1.1.4.3 Customer’s tendency about Logistic solution 17 viii 1.1.5 Experience in development of Logistic service in the region and 18 Development tendency of outsourcing Logistics service in Vietnam 1.1.5.1 Experience in development of Logistics service in the region 18 1.1.5.2 Development tendency outsourcing Logistics activity in Vietnam 20 1.2 Real situation in developing Logistics service in Vietnam 21 1.2.1 Legal basis in doing logistics service in Vietnam 21 1.2.1.1 The trading condition of Logistics service 22 1.2.1.2 Rights and Liabilities of Logistics traders 22 1.2.1.3 Rights and Liabilities of customers 23 1.2.1.4 Exempt responsibility cases for Logistics trader 23 1.2.1.5 Logistics trader’s liabilities once holding goods 24 1.2.2 Some logistics services applied in Vietnam 24 1.2.2.1 Supply Chain Management 25 1.2.2.2 Forwarding and co-loading service 27 1.2.2.3 Airfreight service 28 1.2.2.4 Warehousing – Distribution service 29 1.2.3 Opportunities and Challenges 31 1.2.3.1 Opportunities 31 1.2.3.2 Challenges 32 CONCLUSION OF CHAPTER 1 34 CHAPTER 2 THE REAL SITUATION IN LOGISTICS DEVELOPMENT AT “SOTRANS LOGISITCS) 2.1 Sotrans’ overview 36 2.1.1 Sotrans’ history 36 [...]... situation in our company Application value of the thesis is giving real solutions to develop logistics service at Sotrans Logistics in period 2006 – 2010 5 Structure of the thesis: Including 3 chapters: Chapter 1: The basis and reality on Logistics Overview xvii Chapter 2: Real situation in Logistics services development at Sotrans Logistics Chapter 3: Some Solutions to developing logistics services at Sotrans. .. the research Research object: Services in Logistics Supply Chain Research scope: Sotrans Logistics 4 The new point and application value of the thesis: This thesis is the result for my studying about Logistics matter at some companies in the world, within process of working and studying The thesis summarizes and mentions about basic logistics matters and the application of logistics into real situation... developing the goals of Logistics service in Sotrans 68 Logistics in the period of 2006- 2010 3.1.1 Orientations 68 3.1.2 The objectives of development for period 2006- 2010 .68 3.2 Strategic solution Systems to develop Logistics service in Sotrans .69 3.2.1 Solution group of developing products and services 69 3.2.1.1 Focusing on developing International Transportation 69 3.2.1.2 Developing... Logistics in the period 2006 - 2010 as the thesis of the graduation composition 2 Research’s purpose Know thoroughly the notion of Logistics, the nature of Logistics Investigate levels of development in Logistics company, evaluate actual level of Vietnamese Logistics companies Bring out the development orient and typical solutions of development in order to upgrade the operations at Sotrans Logistics. .. determining, organizing, controlling all activities as well as human resources relevant to input materials Materials management includes the functions as material purchasing, administering goods rotating in productions process, internal transportation, making production plan Product distribution is the activities in order to move finished products at the end of the production line to customers It includes... Product Input Transport Transport Inventory Inbound Logistics Factory 1 Transport Transport Inventory Consuming point Outbound Logistics Figure 3: Logistics system (Trading Logistics) Decade 1980: In decade 1980, the development of Logistics is marked obviously The taking off obstacles in regulations, the expanding of Logistics services makes the relationship between the carrier and the shipper changed The. .. planning, implementing and controlling the efficient, effective flow and storage of goods and services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirement “ As analyzing at 1.1.1, we can see the main features in developing process of modern business Logistics concept Simultaneously, through above definitions, we can see Logistics. .. of the importer to clear customs and transport cargo to stipulated location Therefore, 3PL includes different services, co ordinate closely the cargoes rotating, inventory, information treatment,… and integrate with supplying chain of customer Almost 3PL companies in Vietnam are joint venture companies or Oversea Logistics Fourth Party Logistics Provider (4PL) This is Integrator – the party who unify... is the development at high stage of forwarding activities, using achievement of information technology, in order to dispatch goods from production phase to final consumer, via stages: transport, storage and distribution If considering the beginning point of supplying chain is A, the end point is Z, Logistics is the goods rotating chain from A to Z and ensure optimal quantity, in time manner, with minimum... manpower After that, assembling factories will associate the units of the product together accordingly each stage The factories can be located far away, from this country to another country, from this continent to another continent This brings about many subjects participating into supply chain and Logistics activity has been more expanded The concept “Supply Chain” has appeared in this period as an extended . 3 SOME STRATEGIC SOLUTIONS TO DEVELOP LOGISTICS SERVICES AT SOTRANS LOGISTICS IN THE PERIOD 2006- 2010 3.1 The orientation of developing the goals of Logistics service in Sotrans 68 Logistics. Chapter 2: Real situation in Logistics services development at Sotrans Logistics . Chapter 3: Some Solutions to developing logistics services at Sotrans Logistics in period 2006- 2010. 1. reasons, I have decided to choose the subject “ Some Strategic solutions to develop Logistics service at Sotrans Logistics in the period 2006 - 2010 as the thesis of the graduation composition.