Supply chain management plans

Research and Analysis

Channelss of distribution of ice pick

There are three chief providers that have been really active in new merchandise developments:

  • Kinh Do Co. , Ltd, a Vietnamese owned company, acquired Wall ‘s Vietnam in 2003. After acquisition, Kinh Do has produced many new ice pick merchandises under the trade name name of Kido ‘s, and Merino trade name ( such as impulse ice pick with local fruit spirits ) . With over 20 ice pick merchandises, Kinh Do has been in good place to derive farther portion in.
  • huy Ta Co. , Ltd which is besides an established local company. Its merchandises including dairy-based ice pick, water-based ice pick and majority ice pick with many spirits.
  • Vietnam Dairy Products Co with ice pick merchandises under the trade name name of Vinamilk, Familia, SuSu

Beside that, there are some other ice picks providers exist in market such as CoolBrands International Inc, an international ice pick shaper, has focused on Vietnamese market, particularly Ha Noi and Ho Chi Minh, with Swensen ‘s ice pick imported from Thailand, and providers for ice pick trade names like Goody, BUD ‘s, Fanny, New Zealand, etc. These are premium trade names, and more expensive than local merchandises, but have been good received by many consumers in Vietnam ( Euromonitor, 2005 ) .

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Ice pick merchandises are largely produced in the factory/manufacturers and kept at a low temperature at about -260C at all phases of production. Then, they are put in refrigerated bringing vehicles with approximately -220C to be delivered to distribution Centre ( DC ) before presenting to other participants in the market. These DCs belong to the makers, and are normally located in each part in Vietnam. For illustration, Ki Do Joint Stock Company has two DCs, one called Distribution Centre in the South is located in Ho Van Hue industrial park in Ho Chi Minh City, and one called Distribution Centre in the North is located in Vu Trong Phung Street in Ha Noi ( Chodientu, 2005 ) . Consumers can acquire ice pick merchandises from retail merchants such as mercantile establishments, food markets, booths, street pedlars, from supermarkets such as Metro, Co-op Mart, Maximart, Intimex, Tax, Big C, etc, or from HoReCa such as BUD ‘s, Vn.Index Caf & A ; eacute ; , V3, Flamy caf & A ; eacute ; , Penguin, Bo Gia, Sheraton hotel, etc.

Supermarket has become one of the most of import distribution channels for non merely nutrient merchandises but besides ice pick, particularly urban country. It is more common for bulk ice pick of both local and imported premium trade names. It is expected that gross revenues of ice pick through supermarkets will go on to turn. However, it merely is the best topographic point for presenting new merchandises, as it attracts more consumers in the high income group, because merchandise monetary value in there is somewhat more expensive than at other retailing channels ( Euromonitor 2005, pp. 73 )

With impulse ice pick, convenience plays the cardinal function in ingestion. There are a turning figure of street pedlars, and selling ice pick. In add-on to convenience, these mercantile establishments or independent shops besides offer at lower monetary values than at supermarkets and much lower than in eating houses, hotels ( Euromonitor 2005, pp. 73 ) . The 2nd advantage of independent shops is that consumers receive one-to-one advice from Sellerss. Different from supermarkets/hypermarkets, in independent shops each consumer is treated individually. Furthermore, free bringing is besides offered for big orders. Third, independent shops are frequently located within residential countries, and therefore are really convenient and time-saving for the bulk of consumers. That ‘s why the per centum of ice pick sold in independent shops is much higher than other distribution channels.

Other retail merchants include seasonal mercantile establishments such as beach booths, fairgrounds, subject Parkss, train sites, and historic houses, etc.

HoReCa is besides belonged in independent shops but it is has another manner with more expensive monetary value. This is a new concatenation, a new effectual distribution channel for ice pick merchandises. However, the inclination of Vietnamese consumers eating ice pick in HoReCa is increasing thanks to increased criterion of life. HoReCa can order frost pick from distributers, distribution Centre, or they can straight order ice pick to the local makers through franchise.

At the present, most of SC ice pick members use their ain transit agencies. Therefore, there is no 3PLs used for transit. They merely use 3PLs for engaging warehouses ( Thu Duc warehouse, Pacitech corporation, Sotrans, Vietrans, etc ) , or outsource packaging.

Current state of affairs in ice pick supply ironss ( SC ) in the HoReCa channel

The ice pick ingestion degree of Vietnamese people is low compared to the universe ‘s ingestion degree, merely 0.3 liters per capita per twelvemonth ( Source: Agribusiness and Agri-Food Canada ) . However, ice pick market in Vietnam had the growing rate of 15-20 % per annum ( VietnamNet Bridge, 2007 ) . It grew by 7 % in volume and 6 % in current value footings to make 31.22 tones and VND 700 billion in 2004 ( Euromonitor 2005, pp.63 ) . The retail gross revenues of ice pick increased from 33,387.70 liters in 2005 to 35,663 liters in 2006, and it is forecasted to increase to 40,243.39 liters in the following twelvemonth.

The ice pick market in Vietnam is held chiefly by three companies with made-in-Vietnam merchandises including Kido, holds 45.8 % of the market portion, Vinamilk holds 20.8 % , and Thuy Ta holds 20.8 % in 2005 for high quality ice pick. With the high-and medium-class sections, Kido accounts for 60 % of the market portion with its Kido ‘s Premium and Merino trade name ( Euromonitor 2005 ) .

Vietnamese people perceive milk as being nutrition and expensive. Dairy-based ice pick is hence considered as being healthier and worth the money than water-based ice pick. Therefore, if these merchandises are at the same monetary value, most Vietnamese consumers will take dairy-based ice pick instead than water-based ice pick. However, one of current issues is missing quality ice pick supplied to urban countries as most of water-based ice pick is unbranded, the quality is non guaranteed. An official study has pointed out that 99 % of unbranded ice pick does non run into quality criterions set by the authorities ( Euromonitor 2005, pp.64 ) .

Logisticss and Supply Chain Management ( SCM ) issues in ice pick SC in the HoReCa channel

  • Ice pick SC members have hapless substructure such as lacking of qualified cold shops, terminals, and refrigerated bringing vehicles, and deep-freeze cabinets to hive away, expose and sell from in HoReCa. This leads to the proportion of damaged ice pick increased significantly.
  • There is about no information system in scope for SCM. This affects the ability to command and mange the work flow and bound in client service degree. In add-on, no standardisation about information, services, etc applied in retail system, every bit good as HoReCa, so client service will non be equal.
  • SC members face high transit costs ( as explained in the old portion ) . In add-on, transit cost is high because ice pick manufacturers need to utilize specialised vehicles and tools to transport ice pick.
  • Poor packaging stuffs and low quality packaging equipments are used in SC members. There are more than 700 packaging houses in Vietnam, but the increasing of houses has non been matched by any existent betterment in packaging and design. The job is Vietnamese companies prefer second-hand equipments from China with inexpensive monetary values. As the consequence, ice pick will be melted and its quality will be lower.
  • Workforce in SC members is about unskilled or lacking of cognition sing direction, gross revenues, trading method, etc. This is the large issues, and failing for participants to vie with other local companies or foreign companies when Vietnam joined WTO.

Schemes contribute to the success of the new franchise construct of Ki Do Joint Stock company ( Ki Do )

One of the things that are peculiarly attractive about franchise is that the product-ice cream- can be market-tested in progress to find its possible for long-run success. In some instance, franchisees ( HoReCa or independent shops ) can besides trust on the repute of bing ice pick trade names to foretell the success of their franchise should they take to purchase into the trade name.

KiDo ‘s premium and Merio has a good place in most of Vietnamese consumers. Ki Do became the first concern of its sort in Vietnam to have the international quality direction system certification on nutrient safety control-HACCP ( Hazard Analysis and Critical Control Point ) in 2005 ( ThanhNienNews, 2007 ) . Therefore, it can be success in its new franchise construct if it can pull off supply concatenation good.

Time and cost optimisation is the major end of SCM. Players in the supply concatenation ever seek to cut down the clip and cost of the distribution. Especially clip is critical in the ice pick industry, because it has direct impact with the merchandise life. So each participant in the SC including Ki Do, its distribution Centres, retail merchants, etc must seek for manner to cut down the cost and clip of distribution

Five logistics and SCM schemes

Electronic informations interchange ( EDI )

The major issue is SC members communicate and send handwritten or typed paperss chiefly through facsimile, electronic mail. So, information sharing between SC participants is met an obstruction by tremendous paper work load and small standardisation.

EDI helps sellers and HoReCa communicate easy because it use a standard format ( such as Uniform Communication Standard ( UCS ) ) to pass on the informations including buying orders, monetary value, publicity, bills, transporting notices, vendor-managed stock list, and information that enables sellers to set monetary value tickets on goods over the Internet through extranets

Using Third Party Logistics ( 3PL )

The current issues of some SC participants in Vietnam are holding hapless transit status, deficient measure with low status of warehouse, low cognition and accomplishments in logistics, etc because they do non hold capableness to investing much on them. Therefore, utilizing 3PLs is the best pick for these companies. In the past, each maker or each distributer needs to buy their ain refrigerated bringing vehicles, and other specialised tools to back up for ice pick transit. These things are dearly-won, and if any distributer can non put on this, its ice pick will be lowered quality during transit procedure. However, 3PLs ( such as FedEx or UPS, etc ) nowadays has invested on these transit agencies and cold storage installations to function many makers and distributers.

3PLs is non merely supply outbound and inward transit service ( such as NYK logistics, VN train, Germatrans, etc ) , but merely warehouse ( Pacitech corporatio, etc. ) , freight forwarding ( Vinalink, Sotrans, Vietrans ) , choice review ( Vina Control, Pacific Inspection Co. , Ltd ) , packaging, importing or imposts clearance ( Intimes, Tanimex ) , and imposts securities firm service. SC participants can utilize these services from 3PLs.

Collaborative Planning, prediction and Replenishment ( CPFR )

CPFR in itself is non package, properness engineering or even a informations criterion. CPFR is a concern pattern for merchandising spouses to portion prognosis and consequences informations over the cyberspace, so they can cut down stock list costs while bettering merchandise handiness across the SC.

There are many stairss to be after and put to death CPFR such as create Front terminal understanding with spouses, joint concern program with them, gross revenues forecast coaction, order prognosis coaction, order coevals and bringing executing.

By implementing CPFR, single-function relationships across organisations ( purchaser and marketer ) will be moved to multi-functional coaction between merchandising spouses. It can be imagined as “ traveling from a butterfly construction to a diamond construction ” .

Use Scan-Based Trading ( SBT )

Scan-based trading is the procedure where providers maintain ownership of stock list within retail merchants ‘ warehouses or shops until points are scanned at the point of sale. In order to widen quality control, Ki Do Joint Stock Company can utilize SBT with their franchisees and other distribution channels. In this instance, merchandiser wages Ki Do for merchandises based on what is really scanned at the check-out procedure counter.

Invest on human resource development by developing plans

As the construct of supply concatenation direction becomes more popular and more engineering focused, Ki Do and other SC members need to believe that it is necessary to supply some extra preparation for:

  • people will be working straight with supply concatenation engineering
  • directors of the supply concatenation
  • and gross revenues squad so that they know the aims of the company, the importance of supply concatenation direction, and demand ( required information, information, etc ) that supply concatenation direction people need from them, etc.

With the rapid alterations taking topographic point in most companies, it is highly of import for employees to hold their technological accomplishments up to day of the month. Harmonizing to a study developed by BearingPoint, one of the universe ‘s largest concern consulting and systems integrating houses, there is 96 per centum cited the demand for farther employee preparation to assist keep stock list control and unity. In add-on, the fact is that given a high per centum of warehouse employees who are from the local communities, many lack a solid apprehension of basic warehouse rules. Furthermore, supply concatenation direction is still rather new for many employees and many companies in Vietnam. Therefore, preparation plans are truly necessary.

Logisticss and SCM strategic program

  • Vision:

Ki Do Joint Stock Company ‘s supply concatenation is the best cost effectual, integrated and demand-responsive 1 for packaged nutrient in Vietnam by 2012

  • Mission:

The intent of undertaking is to supply ( across the assorted constituents of the endeavor ) streamlined executing, increased visibleness, seamless coaction, exhausted logistics and supply concatenation cost efficiency by implementing SBT, CPFR and Training Programs.

  • Operative ends
  • Reduce paperwork to 95 % by 2012
  • Reduce papers mistake rectification costs to 90 % by 2012
  • Reduce gross revenues force clip spent pass oning basic point information to clients, following up, deciding questions by 30 % by 2012
  • Reduced entire logistics and supply concatenation costs by 10 % each twelvemonth
  • Increase the relationship between SC member by 40 % by 2012
  • Gross saless additions ranged from 20 % to 30 % each twelvemonth based on merchandise class
  • Increase client service degree by 20 % each twelvemonth
  • Needed resources:
  • Finance: Money to purchase packages, applications ; pay for put ining staff, keeping fee, etc.
  • Forces: top direction of all participant houses, logistics & A ; SC staff of these houses and IT staff
  • Technology: facsimile, phone, cyberspace, etc.


  • ‘Ai Se la nha phan phoi lon cua VN trong tuong lai? ‘ , VietnamNet, 21 May 2005, viewed 6 September 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • Access supply concatenation web site, About Access Supply Chain Ltd, Company profile, ’10 Steps execution Plan ‘ , viewed on 5 September 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • Coyle, JJ, Bardi, EJ & A ; Langley, CJ 2003, ‘Logistics and Supply Chain Information Systems ‘ , The Management of Business Logistics, 7th edn, Thomson Learning, Canada, pp. 75
  • ‘300 Dreyer ‘s Ice Cream Reefers Sport New Decals ‘ , Refrigerated Transporter ‘ , viewed 7 September 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • Foster, T. , 2000, ‘Collaborative Planning, Forecasting and Replenishment- Made for the Web ‘ ,, 31 October 2000, viewed 3 September 2007, & A ; lt ; hypertext transfer protocol: // adcode=10 & gt ;
  • ‘Gotcha! Watch Your Stairss With Scan-Based Trading ‘ , Baseline, A Year in the Life of a Greeting Card, 1 March 2003, viewed 6 September 2007, & A ; lt ; hypertext transfer protocol: //,1217, a=38465,00.asp & gt ;
  • Group 11/SMD9, 2006, Slime ice pick undertaking, position on 3 September, 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • Ha 2007, ‘Kido ‘s ice-cream sets portion auction to raise financess ‘ , ThanhNienNews, 24 January 2007, viewed 6 September 2007, & A ; lt ; hypertext transfer protocol: // ? catid=2 & A ; newsid=24580 & gt ;
  • Kurt Salmon, ‘Survey of Supply Chain Effectiveness ‘ , GMA ( The Association of Food, Beverage and Consumer Products Companies ) , viewed on 7 September 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • ‘Ngon tuy? t kem Merino – Tr & A ; uacute ; ng ngay xe Piaggio ‘ , Cho Dien Tu, viewed on 4 September 2007, & A ; lt ; hypertext transfer protocol: // ? portal=auction & A ; page=saleoff_view & A ; id=488 & gt ;
  • Paul, D. 2006, ‘Beyond CPFR Web-enabled scan-based trading emerges as a sure tool for pull offing in-store stock list ‘ , Internet Retailer, viewed 7 September 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • ‘Phased attack Blends Management, Process and Technology ‘ , Ozburn-Hessey Logistics, viewed 7 September 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • RMIT Blackboard, Euromonitor International, ‘Packaged Food In Vietnam ‘ , March 2005, viewed 4 September 2007
  • RMIT library, Euromonitor International, ‘Ice Cream- Vietnam ‘ , 25 April, 2007, viewed 5 September 2007, & A ; lt ; hypertext transfer protocol: // control=SetCommunity & A ; CommunityID=206 & A ; PageID=719 & A ; cached=false & A ; space=CommunityPage & gt ;
  • RMIT library, Euromonitor International, ‘Packaged Food- Vietnam ‘ , 5 April 2006, viewed 6 September, & A ; lt ; hypertext transfer protocol: // control=SetCommunity & A ; CommunityID=210 & A ; PageID=726 & A ; cached=false & A ; space=CommunityPage & gt ;
  • Sa, N 2007, ‘Ice pick market heating up ‘ , VietnamNet Bridge, 25 January 2007, viewed 4 September 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • ‘Scan based trading: listen, learn, salvage ‘ , Prescient, Fact sheet, selling stuff sent to An ‘s electronic mail on 6 September 2007
  • ‘Supply concatenation engineering ‘ , EPIQ, viewed 7 September, 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • ‘Supply concatenation preparation ‘ , EPIQ, viewed 7 September, 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • ‘The Future is Here ‘ , From the MIT Center for Transportation & A ; Logistics,, viewed 31 August 2007, & A ; lt ; hypertext transfer protocol: // & gt ;
  • Wikipedia, ‘Scan-based trading ‘ , viewed 7 September 20007, & A ; lt ; hypertext transfer protocol: // & gt ;


  1. Scan-Based Trading:

Because consumer takeout drives what the ice pick maker stocks, the maker has shifted to a closed-loop distribution system. As the consequence, they reported holding more elaborate cognition of what is selling at each location, and the traditional bill disagreements are being eliminated ( Coylr, Bardi & A ; Langley 2003, pp.75 ) . One SBT user reported a 60 % decrease in bill mistake rectification costs by the execution of SBT at an mean cost of $ 70.00 per disputed bill, the nest eggs are significant ( Wikipedia, 2007 )

This is the of import and effectual scheme that Ki Do Joint Stock Company should believe, use, and implement it when Ki Do is traveling to implement new franchise construct. Ki Do can increase velocity to market by scan-based trading because it does non merely convey many advantages to Ki Do, but besides to its franchisees or retail merchants.

Other advantages of SBT for Ki Do include:

  • Increased gross revenues: other SBT providers have estimated that their addition in gross revenues by exchanging to a Scan Based Trading theoretical account is from 1 % – 5 %
  • Reduced cost of stock list: in the supply concatenation for supplier merchandized merchandise retail merchants will see a decrease in cost of stock list. With SBT, merchandise bringings are based on existent shop stock list of single points. There is a dramatic decrease in merchandise held in the supply concatenation ( typically held by providers agents/merchandisers/franchisees ) by implementing SBT
  • Decreased clip to market: SBT allows Ki Do to set new merchandises into retail mercantile establishments at no hazard to the retail merchant, since Ki Do continues to have the stock list until it is scanned at the point of sale. This allows the provider to find new point public presentation and seting choice prior to broad graduated table rollout to all retail locations. The consequence is increased choice of timely merchandises which consequences in a better shopping experience for the consumer and increased gross revenues for both the retail merchant and provider because the “ expert ” on merchandise, the provider, is in charge of stock list choice. In add-on, providers can cut down cost for gross revenues staff to service retail merchants by utilizing the coordinated “ bi-directional point information synchronism attack inherent in SBT, providers have reported a 7 % to 13 % decrease in gross revenues force clip spent pass oning basic point information to clients, following up, deciding questions ( Wikipedia, 2007 ) .

By utilizing SBT, Ki Do ‘s pre-sales and selling forces are no longer tied to a truck and without worrying about bringing deadlines. Ki Do ‘s truck can present to 12 shops per path, alternatively of merely about eight. Some paths can now run one truck two times per twenty-four hours, adding efficiencies to the bringing procedure the company has ne’er earlier seen. Where it used to take one hr to do an mean bringing, now it takes merely 18 to 20 proceedingss

Advantages of SBT for Ki Do ‘s franchisees and retail merchants include:

  • Increased Gross saless: the addition was driven by the provider holding more clip in the shop to ware its merchandise, fill holes, and keep plan-o-gram unity. In add-on, several retail merchants mentioned providers were able to do an extra halt at each shop during the hebdomad to ware merchandises and prevent out-of-stocks. Salmon and Associates reported that “ a food market retail merchant ‘s gross revenues increased in every merchandise class it tested – from staff of life to frost to magazines. Gross saless increases ranged from 1 % to 5 % , based on merchandise class ” . Schnuck Markets reported a 4 % addition in gross revenues for its SBT pilot ( Wikipedia, 2007 )
  • Reduced Invoice/Order Processing Costss( as surveyed many retail merchants )
  • Lowered Cost of Inventory: SBT alterations inventory ownership to the provider, the retail merchant experiences a decrease in retailer-owned stock list.
  • Reduced Stock Outages: SBT forces the provider to pull off and merchandize its merchandises to guarantee that the right merchandise is on the shelf at the right clip or the provider will see a loss of gross. This provides a powerful inducement to cut down stock outages.

( Wikipedia, 2007 )

Disadvantages of SBT:

  • Harmonizing to Kurt Salmon ‘s study consequence ( hypertext transfer protocol: // ) makers are by and large non enthusiastic about SBT based on issues including psychiatrist, revenue enhancement deductions, amendss, liability, etc.
  • Synchronizing informations is non a simple and little measure: The matching of merchandise informations traveling inside providers ‘ and retail merchants ‘ supply-chain systems is required before companies can even believe of trading ice pick based on scanning saloon codifications at the check-out procedure lane. This means non merely acquiring merchandise codifications and descriptions in the retail merchant ‘s system to fit those in each provider ‘s database, but “ cleansing ” the information to take any erroneous points or “ free-form ” informations that may hold been entered into systems to manipulate in the hereafter. Merely so can data be shared through a directory of merchandises or electronic papers exchanges.
  • Many right criterions needed to be followed: In order to do certain the work Ki Do make to synchronise day of the month is reclaimable across the retail merchants, franchisees Ki Do trade with it will necessitate to convert its spouses all to adhere to standard ways of arranging their information. There are many criterions followed such as the Uniform Code Council and EAN International, UCCnet, GTIN, etc.
  • Bar codifications are non accurate plenty: The Universal Product Code that is captured in a saloon codification merely has 12 figures and merely categorizes a merchandise. It takes more figures to place a specific merchandise and maker. There will hold an extension of the UPC criterion, but most of point-of sale and retail systems can non read the drawn-out barcode. There is a solution for this job is that provider can utilize the Electronic Product Code ( EPC ) , a 28-digit figure that can be used with radio-frequency designation ( RFID ) french friess and other electronic labels to give each merchandise its ain alone identifier developed by the Auto-ID Center at MIT. However, it is really expensive that few companies accept it.

( Baseline, 2003 )

  1. Invest on human resource development by developing plans

The intent of preparation is to assist directors and other employers feel comfy and confident in their ability to utilize the available tools to efficaciously pull off the concern ‘s supply concatenation.

There are many developing methods and options for SC members to utilize. However, companies should acknowledge the demand to supply the preparation in the most cost-efficient and time-efficient mode.

Following are some options SC members can see:

  • On-the-job preparation: the employee would larn how to utilize the supply concatenation direction tools while working with them in a hands-on state of affairs. Someone knowing about the plan would usually oversee them either from within the organisation or from a third-party house.
  1. Evaluation:

There are four standards chosen to measure the identified schemes as followers:

  • Low execution barriers ( 30 % ): how many barriers happened when implementing the scheme, and how large they are. Barriers may include initial set up cost, criterions followed, attach toing applications required to put in, etc.
  • Reduced logistics & A ; SC costs ( 30 % ): how much stock list cost, transit cost, procurance cost, client service cost, etc will be reduced after implementing the scheme.
  • Improved relationship between SC members ( 20 % ): how coaction degree, swearing degree, etc that SC members will hold after implementing the scheme.
  • Improved client service ( 20 % ): how good the scheme will assist SC members increase client service and client satisfaction sing improved rhythm clip, on-time bringing, good quality of merchandises, less complicated in procurance and processs, etc.


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