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Table of Contents

Chapter 3: INTRODUCTION......................................................................................................4
3.1 Background of company:....................................................................................................4
3.2 Vision of THACO:...............................................................................................................4
3.3 Mission of THACO:.............................................................................................................4
3.4 Goals:....................................................................................................................................5
3.5 Objectives:............................................................................................................................5
3.6 Strategy:................................................................................................................................5
3.7 Organizational structure:....................................................................................................5
3.8 Culture of THACO:.............................................................................................................5
3.9 Value of THACO:.................................................................................................................5
3.10 Customer services of THACO:.........................................................................................6
3.11 Process in THACO:...........................................................................................................6
3.12 Business Environment:......................................................................................................7
Chapter 4: QUALITY MANAGEMENT IN THACO...............................................................7
4.1 Quality system:.....................................................................................................................7
4.2 Total Quality Management (TQM):...................................................................................8
4.3 Quality Assurance (QA):.....................................................................................................8
4.4 Quality Control (QC):.........................................................................................................9
4.5 Quality Standard:................................................................................................................9
4.6 Requirement for quality:.....................................................................................................9
4.7 Quality Circles:....................................................................................................................9
4.8 Continuous Improvement:................................................................................................10
4.9 Quality Management Tools:..............................................................................................11
Chapter 5: IMPROVEMENT IN OPERATION AND PERFORMANCE............................11
5.1 Organizational objectives and goals:...............................................................................11
1

5.2 Performance measure:.......................................................................................................11


5.3 Improvement and innovation:..........................................................................................12
5.4 Change management:........................................................................................................12
Chapter 6: HEALTH AND SAFETY IN THACO....................................................................13
6.1 Risk assessment:.................................................................................................................13
6.2 Health and Safety in workplace:......................................................................................14
Chapter 7: RECOMMENDATION AND CONCLUSION......................................................16
REFERENCES:...........................................................................................................................16
APPENDICES:............................................................................................................................17
Appendix 1: THACO organizational structure....................................................................18
Appendix 2: 60 minutes quick maintenance in THACO KIA............................................19
Appendix 3: The THACOs product specification................................................................20
Appendix 4: Cause and effect diagram..................................................................................21
Appendix 5: FMEA Analysis...................................................................................................22
Appendix 6: The organizational goals and objectives..........................................................24
Appendix 7: The planning for goals and objectives in 2014................................................25
Appendix 8: Performance Indicator of THACO..................................................................27
Appendix 9: Balance Scorecard..............................................................................................29
Appendix 10: The PMI Analysis.............................................................................................35
Appendix 11: Force Field Analysis.........................................................................................36
Appendix 12: Risk assessment of THACO............................................................................37
Appendix 13: H&S Inspection checklist................................................................................38
Appendix 14: Health and Safety policy in workplace..........................................................40
Appendix 15: The policy check list of THACO.....................................................................42
Appendix 16: The procedure of Accident Investigation.......................................................44
Appendix 17: Incident Report of THACO..............................................................................4
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Table 1 The different of Vietnam Labour law and UK H&S law............................................15


List of Figure.Y
Figure 1 PDCA Circle..................................................................................................................10
Figure 2 Process of risk assessment............................................................................................14

Chapter 3: INTRODUCTION.
This report will present the application of quality management in THACO Group. The firm must
set out their quality management system with their own standard and processes to monitor and
control quality of product. It is also mention all factors and method of quality management
include quality assurance, standard form, and other policies. Aspect of quality management is
broad so that the report focus production and interrelationship with customer satisfaction and
introduce briefly quality management of other processes. In addition, the report also provide
information about the Health and Safety law in Vietnam and UK for business.
3.1 Background of company:
Truong Hai Auto Joint Stock Corporation (THACO) was established in 1997 by Mr Tran Ba
Duong. The main business is produces, assembles, and distributes commercial vehicles and
passenger cars and other investment. Currently, the company operates 5 administration offices in
Ho Chi Minh City, Bien Hoa, Ha Noi, Da Nang and Quang Nam. Beginning from the supplier,
THACO expand into their manufacturing, distribution cover whole Vietnam. Up to now, they are
the assembler of foreign passenger car brand include KIA (South Korea), MAZDA (Japan) and
PEUGEOT (France).
3.2 Vision of THACO:
Become the biggest company with high growth and sustainable leading position in the region and
market. Therefore, they will develop the Vietnams brand to international market. THACO
Group determine the position and operation strategy with strategic vision for company. It will
effect on the long-term development of business. Their vision has specific and contain the core
value to help company in the future.
3.3 Mission of THACO:
Creating a product that enhance the quality of life in order to become one of the popular brand in
Vietnam and the world.
Sustainable development of business to provide the highest benefit for shareholders and partner.
For employees, company build the good environment for their development and give the
opportunity for creative.
Contribute to the process of economic development

3.4 Goals:
Expanding the business scales in the future to become one of the biggest Vietnams company
3.5 Objectives:
Open three factories within five-year periods from 2014 to 2019
Increase the market share to 30% in 2015
Develop and introduce two new products in 2014 from KIA and MAZDA
Expand the showroom system cover whole country with more 60 showrooms.
3.6 Strategy:
Become the biggest company with stability growth in Vietnam and Asian. Therefore, company
can expand business into new market such as UK and US in the near future.
3.7 Organizational structure: (see Appendix 1)
THACO is a big corporation the organizational structure is complicated. The types of structure
is tall with five management levels. The strategy and vision will be provided by board of
manager the highest level to below level of system. In addition, the H&R manager also
manage the region brand cover whole Vietnam. Therefore, THACO must build a flexible
structure to run business smoothly and effectively because it is too difficult to receive
information from the top level management.
3.8 Culture of THACO:
In addition to the strong leadership of manager, the culture is one of important factors to
contribute the success of business. THACO build the specific and sustainable culture from the
company was established. The board of manager create the Principle 8 words include: Dedicated,
Honest, Intelligence, Confident, Respect, Loyal, Responsibility and Convenient. It is the core of
THACO culture to help them achieve their goals and make them different from other
competitors.
3.9 Value of THACO:
It will support vision and shape companys culture. The value educate customer about company
and what is their different with other competitors. There are some core value of THACO:

Customer focus: THACO bring the good product with highest quality to customer by applying
the strict quality management system because customer is the existence of business.
Understanding the customer need and meeting requirement is the main objectives of value.
Respect for the individual: THACO aim provide the friendly environment that all employees
respect each other. Therefore, they can make important contribution to the company and
freedom for creative.
Teamwork: In the production line, THACOs manager divide into a lot of small group then the
teamwork is very important factor to achieve the highest objectives.
3.10 Customer services of THACO:
Beside that providing product to market, THACO also bring the customer services with best
experiences for their customer. There are four main services of THACO in the following:
Normal maintenance: To ensure the perfect and safety condition of customer vehicles, THACO
provide the routine maintenance with professional technician and original part high quality. The
after-sales employees is friendly and honest will make customer feel comfortable when they
choose THACOs services. In addition, customer can receive the 24 hours convenience, lower
time and reduce cost.
Warranty policy: The general warranty is applicable for all types of THACOs product in
Vietnam market with the 36 months period or 100,000 km. Under the warranty period, company
offer repairing services free of charge.
Repair services: With the network professional repair shop and across Vietnam, THACO will
meet all need and the unexpected situation from client. THACO is building the professional
repair system that can make customer satisfaction.
Promotion program: THACO always provide many special program with attractive price for
customer to increase the sales. In addition, the buyer can get the high quality accessories (DVD,
reversing camera, rescue bags and firm heat).
3.11 Process in THACO:
There are many processes that manufacturing company as THACO can apply in their system.
Each process has the specific function to support company run business. This is one of the
popular process of THACO are 60 minutes quick maintenance process. THACO make the
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great effort to meet the customer satisfaction through providing the quick and convenient
services. This process run by three department include Marketing & Sales, Financial and Repair
Services. It will help customer save a lot of time for waiting then company can build the strong
relationship with them (see Appendix 2).
3.12 Business Environment:
Vietnam is developing country with sustainable growth in Asia so government focus on the
manufacturing industry.

Despite the fact that Vietnam is still face many difficulties and

challenges from the world economic downturn. It will make THACO Group consumption
become more difficult and the decision to purchase the product of car manufacturing company.
The main reason is it effect on the GDP and income so people will decrease the spending.
However, company is developing rapidly with the good strategy and management from board of
director. In 2011 is the successful year of THACO Group when the increase in both sales and
brand images. The government has many great policies for domestic enterprise producing and
assembling car such as support income tax, high import car tax (80%). These policies will
encourage enterprise produce more product and protect from the foreigner brands. The middle
income class increased rapidly so the demand of buying passenger car is high. This is the good
opportunity for THACO to attract more potential customers and increase the sales.

Chapter 4: QUALITY MANAGEMENT IN THACO.


In the modern world, quality is the most important factor to determine the company position in
the market. The high quality product will lead to customers satisfaction and bring more profit
for company. By having a high quality product, manufacturing is able to reduce the time for
maintenance and more time to support customer. With the mission is export product in overseas
in near future, company must manage and monitor products and processes with high quality
standard. Therefore, the quality management is necessary for supporting THACO achieve this
mission. The paper will present a various methods and systems to manage and control quality
effectively. The control method and system that THACO Group adapt are Quality System,
Quality Assurance, Quality control, TQM, Quality circles.
4.1 Quality system:
In order to manage and control quality, company need to has a quality management system. Each
level management of THACO has responsible for running this system effectively. The process
of producing car has many stage so it should control through strict quality system.
7

The strategic management level: It identify the roles, responsibilities and authority of those
people responsible for product and services quality. Therefore, the board of director can design
the strategy for quality management in the long-term. Based on this quality system, THACO can
develop and measure the performance to improve the quality.
The tactical management level: In the level, manager design the quality control for each process
and provide the guideline to lower level.
The operations management level: This level relates to the production of product and services
within company. It control and monitor all daily activities include the input and output of
production process. Therefore, they can identify the range of potential production problems
during the process.
When THACO prepare for new passenger car, the board of director will based on the market
research and create the quality guideline and requirement for production department. After that,
the production manager has responsible to make a new plan and procedures document for quality
control to employees. The supervisor in factory will apply new procedures from high level
management and make sure the production process meet the requirement.
4.2 Total Quality Management (TQM):
It is a management approach for manager to long-term success through customer satisfaction.
TQM aims to manage all factors involved in production process for the overall quality of
product. THACO management will provide the skills for employees to meet stakeholders needs
and expectations efficiently. It also ensure the quality culture of company.
4.3 Quality Assurance (QA):
It is a planned process include inspection and quality control plan, reviewing and monitoring
plan-enabling QMS to control quality. The main mission is help production quality meet the
requirement of customer.

Thus, the company should have clear policies on quality with

measurable objectives to raise the customer satisfaction. It develop and compliant processes and
procedures effective. In addition, QA provide training for all employees to help them understand
the importance of quality. The companys Quality Management System should provide the
policies and procedures which include:
Business continuity policy and Disaster recovery plan.
Environmental policy.
8

Telephone, Internet and Email policy.


Information and data security policy.
4.4 Quality Control (QC):
It carries out the range of inspections and test before the products reach to the customers. It
ensure the company can achieve the quality standard that they set it for itself. Basically, the
simplest method of quality control is inspection. It help THACO Group reduce the high number
of rejection and error entry in developing product through checking sample car before it delivery
to distribution system. However, the best way of quality control is through control of the process
of production rather than through inspection of the finished product. The development of
technology, THACO applied the industry-standard computer and automatic techniques in their
production process to work faster and more accurately. QC focus on all matter affect the quality
of product such as raw material, process design, transporting and storage. Finally, the result of
quality will achieve high performance.
4.5 Quality Standard:
It is the criteria and requirement for product or services to achieve the specification. In addition,
QS is the generic term of five international standard (ISO 9001, 9002, 9003, and 9004). THACO
Group must design the suitable and clear standard for each type of product and it must meet the
guideline from International Organization for Standardization. THACO set the quality standard
base on the interest and demand of market and customer. From the support of ISO certified
label, new buyer can know the product has high quality. In addition, THACO still meet ISO
14000 as it concerned with environmental management. It aims are to minimize the harmful
effect on environment caused by activities of company.
4.6 Requirement for quality:
This is very important factor for company to control the quality. For the automotive industry, all
product must meet the ISO 9001:2008 from the international organization. Zero-defect products
are expected from all supplier. This is the 2014 KIA Rio 5dr HB Auto Specification, one of new
product of THACO (see Appendix 3)
4.7 Quality Circles:
This is the small group of employees who meet regularly to implement the quality management
activities. Their main mission is monitor the quality of production and operational procedures to
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identify, analyse and resolve the quality issues. THACOs manage can decide to create a group of
3 to 10 employees in the workplace to discuss and find out the solution for qualitys problem. It
is a good method for monitoring the quality because workers know the specific of product then
they can find out the problem quickly.
4.8 Continuous Improvement:
THACO Group will check and review to identify and analyse which factor should be change
then testing and revising solution. The demand of market change very quickly so company need
a flexibility strategy to adopt it. It will ensure the effective and efficient management of quality
process.

This is very necessary for supplier maintain documented evidence of continuous

improvement for review upon request from THACOs representation. In addition, the company
choose the PDCA method for continuous improvement. It include four steps are Plan-Do-CheckAct that enable THACO control more easily. This method applied in quality management to
improve and enhance the quality of product and work. The first step is based on the result of
previous circles to solve the existence problem then so many times applying the quality will
improve gradually. The detail of four step will show in the following:

Figure 1 PDCA Circle.


Plan: In the first step, planner design the business process to improve the performance
10

Do: Next, planner measure the performance of plan


Check: Assess the measurement and report to manager who make decision.
Act: The final step, manager will decide to do the changes if it necessary for improving.
4.9 Quality Management Tools:
In order to control quality effectively, THACO Group apply a various quality management tools
and techniques to help evaluate and manage performance more easily. The first method is Cause
and Effect diagram (Fish Bone diagram) that show the cause of problems company. It is very
useful tool for manager to find out the main cause of many problems such as the poor quality,
bad performance or customer not happy. When analyse and identify the cause, company has the
solution to fix and improve very quickly. The Fish Bone diagram of THACO Group (see
Appendix 4).
Another tool is Failure Mode Effect Analysis (FMEA) that used to review failure, prevent the
risk then provide the action to reduce. It not only mention the cause but also identify the effect to
enterprise more clearly. The risk has highest score is the priority problem that must be solved
first. In this case of THACO, the highest Risk Priority Number is 336 by lack of capital. Thus,
THACO must create the plan to find and attract more investors and raise their finance. The
application of FMEA in THACO (see Appendix 5).

Chapter 5: IMPROVEMENT IN OPERATION AND PERFORMANCE.


The chapter will present the planning for improvement of performance in THACO. Thus, it can
help manager choose the potential plan and make the better decision for improving performance.
5.1 Organizational objectives and goals:
In order to get more success in the long term, THACO should establish clear goals and create the
plan to achieve those goals, especially before starting new operation. It necessary to make the
action plan for each department of company to improve the efficiency and productivity faster.
The goals and objectives need to meet the SMART for controlling performance and
measurement. There is suggest the plan for THACO in 2014 (see Appendix 6)
5.2 Performance measure:
It is conducted by quality management system applied in THACO. The quality controller will
checking the key performance indicator (KPIs) to know the efficiency of production process. The
11

performance can be measured by profitability, activity and productivity. For each department,
the manager need to measure performance to ensure the effective of system. They can set the
target and compare with the actual result. THACO provide a list of performance indicator for
each department (see Appendix 7)
5.3 Improvement and innovation:
In order to become the strong company in market, THACO must make the change and improve
technology and management. To keep up improve and increase the output of machines.
Innovative technology and installation system with the technical standard that support company
compete with other competitors. THACO should build more factories with modern equipment
and make the initiative in production.

Planner should determine the advantages and

disadvantages that company will face then they can making a suitable strategy planning.
5.4 Change management:
To develop THACOs business to catch up with the intensely competitive market, manager must
know how to respond quickly to market changes. This is the reason why manage need to have
good plan and necessary tools. The planner can use the Force Field Analysis in order to making
decision about the change of company. The useful tools for manager include PMI analysis and
Force field analysis to evaluate the strength and weakness of new change. Therefore, manager
can justify the effect of change on the performance. Firstly, THACO will increase the number of
worker and staff for expanding business scales. This plan will face a lot of problems and issues
so planner will use PMI analysis to analyse and assess the plans feasibility and potential for
success. Manager need to have the effective management method and tools to support evaluate
and control the changes. The changes is required more capital and a lot of effort so company
will heavy loss if the plan failure.
Balance Scorecard: It is the management tool to align business activities and monitor company
performance. This tool is used to guide business operation and strategic vision of company and
monitoring business compare to target. Therefore, manager can look at the business from four
perspectives include Financial, Customer, Internal business process, Innovation and learning.
This method is a collection of performance indicators that manager can review easily what
company need to improve. It enabled THACO to track performance measure while monitoring
the process to ensure the stability of future growth (see Appendix 9)

12

PMI Analysis: It consider all aspect of change before making decision. Therefore, the problems
and issues will be analyse quickly and effectively. It is a good tool to use for development.
From the result, the analysis has more plus that manager will follow this change for operation.
(see Appendix 10). Firstly, THACO want to invest and purchase more new automatic machine
for production. It will lead a lot of minus point include the cost of investment and required more
professional engineers. However, the new machine will increase the capability and revenue for
company in long term. Using PMI, manager can realize that the PMI score is +3 then company
can carry out the plan. Although the plan required more capital but THACO has enough fund for
new expansion scheme. In addition, THACO has the plan to train employees quickly to guide
how to use and work with new technology. The next plan is increase the current number of
worker in factory. It is important plan for expanding business and fill a gap in the market. The
plan is still face a lot of problems but PMI score of this plan is +6 so company can continue with
the changes.
Force Field Analysis: From the result of analysis, planner can decide whether the project is
viable. Company has two option are reduce the strength of negative forces or increase the
positive forces. With PMI analysis, it support manager assess the degree of impact in company
(see Appendix 11). The biggest plan of THACO is build one new factory in Chu Lai Industrial
Zone with the goal to increase the performance of production. This changes need to research
carefully before board of manager making final decision. THACO will face potential risk and
failure if company has the vague estimate of plan.

Chapter 6: HEALTH AND SAFETY IN THACO.


The health and safety are one of the most important matter in the manufacturing and priority
issues of business. In the context of health and safety management, THACO should fulfil the
requirement of H&S to ensure the employees achieve at least their minimum legal duties. This
chapter will discuss on two main elements of H&S management are risk assessment and health
and safety in workplace. HR department of THACO has responsible for managing and planning
both of them.
6.1 Risk assessment:
This is the list of risk that could be appear in workplace in order to control hazards and manage
risks. It could be fire, chemical, emergency exit, electrical, working condition and so on. It is
obligatory and required by UK Health and Safety at Work Regulation 1999. The main mission
13

of risk assessment is help employees, worker and visitor understand which the potential risks is.
H&S also division level of risk from 1 to 9 that give warning of danger to all people. After
evaluating the risk, HR department provide necessary action plan to support employees prevent
as much as possible. The process of making risk assessment could be shown as follow:

Ih
z
R
iw
v
e
A
p
lo
D
ty
fc
m
s
g
rn
u
a
d
k

Figure 2 Process of risk assessment.


Making the risk assessment is very important to reduce and control the potential risk as much as
possible. The employees and worker can understand how to prevent the risk and accident in
workplace. The risk assessment of THACO will show in Appendices (see Appendix 11).
6.2 Health and Safety in workplace:
Health and Safety Legislation: It is the procedure for identifying the hazards and action to
reduce accident and risk in workplace. In addition, company also provide the training of
individual in accident prevention.
Vietnam Labour law: THACO is a Vietnam company so their business must follow the Health
and Safety law of Vietnam. It is represented on chapter 9 of Vietnam labour law 2012 include 20
important statement.

Company must open the routine training for employees to practice

application.
14

The UK H&S legislation: It include two major are Health and Safety Work Act. 1974 and EU
directives on H&S. 1993. THACO has the plan to export to UK and EU market so they must
research carefully and compliance with the law. Company should ensure the duties of employees
in workplaces. These regulations are enforce by HSE and local authorities. The main mission of
HSE is manage and provide guideline the health and safety for business and manufacturing.
The contrast between Vietnam Labour Law and UK Health & Safety Law:
Similarities: Both of them was established with the main purpose are provide the guideline for
Health and Safety for business. It has a various category to suitable for different types of
business. Furthermore, the law is the formal regulatory framework relation between owner and
employees the liability. Finally, UK and Vietnam always have the local authorities to monitor
and supervise compliance with legislation on enterprise.
Differences:
Vietnam Health and Safety law
UK Health and Safety law
It is one of the most important part of The law is managed by Health and Safety
Vietnam Labour law and provided by Executive. They provide the clear policy and
Vietnam Ministry of labour-invalids and procedures for enterprise follow and apply in
social affairs. The law has an extremely their workplace. The law has a strict
comprehensive Labour Code but it not requirement

and

clear

instruction

that

suitable for measure to ensure enforcement.


company can follow easily.
Table 1 The different of Vietnam Labour law and UK H&S law.
The application of health and safety in THACO:
In order to ensure the slip trip and fall policy, THACO hired the services of housekeeping that
company can able to keep the floor clean and reduce the incident.

For the automotive

manufacturer, the policies and procedures need to practically to be used is the work equipment
and machinery. THACO should manage the maintenance of the equipment or replacing old with
new machine to avoid the unexpected accident. Next, the practical application of Fire and
explosion act is also important in factory and office every six months. It must meet the standard
requirement of local fire department. Moreover, THACO must create the health and safety
working environment and adapted to the state of capabilities of worker. To comply with Vietnam
and UK law about safety of customer, supplier, worker and general public, THACO provide the
15

policy and procedures that people must understand and follow them (see Appendix). When the
incident occur, HR Manager and supervisor have the responsible for investigating and making
incident report. The incident report of THACO (see Appendix 16).

Chapter 7: RECOMMENDATION AND CONCLUSION.


THACO is aimed to reach high efficiency in productivity and logistics. To achieve this target,
the company is creating new factories and coordinates with other partner to increase the capacity
of company. The important factor of success is the quality of product, THACO is applying the
strict quality management system to ensure their final product meet the customers requirements.
Besides that, THACO also focus on the Health and Safety law to provide the standard workplace
for worker and staff. Applying some monitoring method such as balance scorecards, PMI, Force
Field Analysis can allow manager manage and drive company forward to achieve success in the
future. All methods and tools should be researched and prepared carefully to give the direction
for company. Otherwise, THACO must has a clear strategy and roadmap to adaptation to
changes in the future. The company need to continuously improvement product and quality to
compete other competitors and become the market leader of industry. Therefore, THACO will
has enough ability for exporting products in foreign market especially UK. Another important
things, THACO should apply international standard in production process, services and quality
control to meet the high market demands.

In conclusion, THACO apply these quality

management tools and recommendations in this report then the company can achieve the quality
standard, health and safety regulation set by UK and EU authorities.

REFERENCES:
Balance Scorecards [online] (2013). Available at:
http://www.businessballs.com/balanced_scorecard.htm [Accessed 29 June 2014].
Business Essentials: Management Communication and Achieving Results (2010) [book]. Essex:
BPP Learning Media.
Performance Management & Measurement [online] (2014). Available at:
http://www.hrsa.gov/quality/toolbox/methodology/performancemanagement/index.html
[Accessed 29 June 2014].
Plan- Do Check Act (PDCA) Cycle [online] (2014). Available at: http://asq.org/learn-aboutquality/project-planning-tools/overview/pdca-cycle.html [Accessed 29 June 2014].
16

Plus Minus Interesting [online] (2014). Available at:


http://www.mindtools.com/pages/article/newTED_05.htm [Accessed 29 June 2014].
Production Managing Quality [online] (2014). Available at:
http://www.tutor2u.net/business/gcse/production_quality_management.htm [Accessed 28 June
2014].
Quality Process [online] (2014). Available at:
http://www.eprecisionsprings.com/quality_process.htm [Accessed 30 June 2014].
THACO Official Websites [online] (2014). Available at: http://www.truonghaiauto.com.vn/
[Accessed 30 June 2014].
Total Quality Management (TQM) [online] (2014). Available at: http://asq.org/learn-aboutquality/total-quality-management/overview/overview.html [Accessed 27 June 2014].
UK Health and Safety Executive [online] (2014). Available at: http://www.hse.gov.uk/ [Accessed
30 June 2014].
What Automotive Needs Right Now: Quality Control, Manufacturing Efficiency [online] (2014).
Available at: http://www.industryweek.com/companies-amp-executives/what-automotive-needsright-now-quality-control-manufacturing-efficiency [Accessed 28 June 2014].

APPENDICES:

17

18

Appendix 1: THACO organizational structure.

19

Appendix 2: 60 minutes quick maintenance in THACO KIA.

20

Appendix 3: The THACOs product specification.


Performance, Engine & Power
Drivetrain

Front Wheel Drive

Engine Type

Regular Unleaded I-4

Displacement (cc)

1.396

Fuel System

Direct Gasoline Injection

Max Speed
Weight - Dimensions
Overall Dimensions (mm)

170 km/h

Curb Weight (kg)

1.068

Gross Weight (kg)

1.600

Fuel Tank (l)

43

Body Material

Alumina

4.045 x 1.720 x 1.455

21

Appendix 4: Cause and effect diagram.

22

Appendix 5: FMEA
Analysis.

23

[1]
Mode of Failure

[2]
Cause of Failure

[3]
Effect of Failure

[4]
Likelihood of
occurrence (110)

[5]
[6]
Degree of Severity Likelihood of
(1-10)
Detection (1-10)

[7]
Risk Priority Number
(1-1000) RPN =
[4]*[5]*[6]

The machine is
broken down

Overloading

Repair cost

112

In efficient work
scheduling
Lack of maintenance

Increase idle time

144

Delay the production


progress
Unable to meet
deadline
unable attract the
customers attention
Waste of capital and
effort
Waste of capital and
effort

98

160

336

288

144

Virus computer
Poor marketing
activity

Lack of capital
Lack of research
Activity is not well
organized

Number
1

Risk Priority Number


336

Action to reduce
Finding new investors
24

Revenue
Profit margin

Target
288per month in 2014
More research and collect information
1 billion VND
160per month in 2015
Upgrade and install anti-virus software
2 billion VND

Gross profit 144


40% of total costSet
bythe
2014
reasonable schedule for the machine

144

Improve delegation and enhance processes

6
112 passenger cars
Set the
reasonable schedule for the machine
Manufacturing cost per unit (material,
KIA brand: 6000
by 2014
7
98 3000 passenger
Invest
onby
maintainers
periodically
labor, overhead)
MAZDA brand:
cars
2014

Appendix 6: The organizational goals and objectives.

25

Appendix 7: The planning for goals and objectives in 2014.


Departmen
t
Financial

Division

Goals

Objectives

Actions

Increase the revenue is Raise more 100 billion Attract


26

Monitored by
more

domestics

and Financial

Timeline

Budget

From 2014 to 50 billion

6000 billion VND

fund in 2014

foreigner investor.

manager

2015

VND

Production

UK
Increase the capability Build 1 factory in next Invest new technology

Production

From 2014 to 30 billion

line

up to 10,000 cars per five years.

manager

2015

Production

From 2014 to 10 billion

To increase the net Expand the size of operation


profit

20%

in

six Keep the good relationship with

months

partner KIA, MAZDA

Export 1,000 cars to


Production

year

Follow the Vietnam Labour law

VND

Increase the number of


worker up from 6,735
(2013) to 7,500.
Buy more 200 modern

machine
Storage and Improve the performance Increase the capability Purchase more 6 trucks
Logistics

of logistics

of the boat Truong Hai Invest to buy one larger boat in manager
Star 2

2015

VND

Six months

700

next 2 years

Expand the size of


warehouse
Quality

Meet the UKs standard

managemen
Marketing

t
Sales

13,400 m2
Get the ISO 9001:2008 Build up the modern and strict Production
certification

and Ensure

Distribution

system

margin

20%

2014
profit Increase
awareness

in

the
to

May quality management system.


Applying the ISO 9000 process
brand Open new marketing project

manager
Marketing

target Encourage the activities of KIA manager


27

million
VND
From 2014 to 10 billion
2015

VND

Increase the number of customer


loyal customer.

is

middle and MAZDA

income class.

Expand more customer services

Become one of popular


R&D

and promotion program.

brand in Asia-Pacific
Research
new
and Developing
modern

passenger

truck Improve

car cars for UK market

and trucks

the

techniques

for R&D manager

production.

From 2014 to 20 billion


2016

VND

Collect customer and market


information

HR

Improve the ability of Reach


employees

1,000 Open 2-3 training course each HR manager

employees at graduate years.


and post-graduate level Send
in 2014

2015
high-skills

employees

study and train in foreign such as


Japan, Korea

Appendix 8: Performance Indicator of THACO.


Department

Division

Performance Indicators

Monitored by

28

From 2014 to 10 billion


VND

Production

Production line

Production volume per month

Managing director + Production manager

Number of defect/10000 products


Number of deadline of order are met
The percentage of work output
Number of product/employee/month
Variance production cost (compared with budget)

Storage and Logistic

Waste of material/ total purchased material


Broken product/ total finished good
Number of idle time caused by shortage of input

Managing director + Production manager

Quality management

Number of problem solved

Managing director + Production manager

Number of defect reduce


Amount of cost saving
National and international standards achieved
Customer satisfaction survey
Marketing

Brand development

Brand ranking by customer


Customer awareness of the brand
Number of new customer gain per month

29

Managing director + Marketing manager

Sale & Distribution

Number of deadline of order are met


Number of coordinated wholesaler and retailer
Sale volume per month
Selling price
Revenue/ selling cost
Sale variance ( compared with budget )

Managing director + Marketing manager

R&D

Number of new product introduced per year


Customer satisfaction survey
Revenue on new product.
Number loyal customer

Managing director + Marketing manager

Financial

Cost variance
Number of external investor
Loan/capital ratio
Number of clean audit findings
Budgeted cost/capital
External investment/total capital

Managing director + Finance manager

30

HR

Number of training/ year


Number of employee trained
Number of employee leave
Employee satisfaction rating

Managing director + HR manager

Appendix 9: Balance Scorecard.


Perspectives
Financial

Core value

Goal statement
the

Performance

Target

Action

measures
company Percentage of clean 100% clean audit Provide sustain training and developing strategy for

Financial

Strengthen

sustainability

capital, balance loan and auditing findings


equity

Percentage
loan/capital

findings

financial department

of 40% loan capital

Research investor nationwide and also foreign

500 billion external investor.

External investment investment by 2015, Maintain capital, implement actions to return capital
account for 20% of rapidly
Profitability

Spend resource efficiently, Profit margin

capital
Profit margin: 30%

do appropriate budgeting Cost variance

Cost variance less efficient budget.

and manage cost wisely

Budgeted

than 1 billion VND

cost/capital

Budgeted
capital <90%

31

Enhance communication among departments to do


Bring cost management as an important criteria of

cost/ quality management.


Take R&D work as a base for each project

Benefit

to Coordinating

investor and department


management

among ROI
and

total ROCE

ROI: 20%

Manager take responsibility to follow budget and

ROCE : 20%

manage cost efficiently

company effort to generate

Collect employee ideas for increasing productivity

profit

and reduce cost


Research to invest money in different type of
business: (business owner, shareholder)

Cash flow

Conduct fast and convenient Available

Available

Due with retailer and wholesaler to get cash payment

purchasing

cash/capital

in time, support them to sell out product and generate

procedure, cash/capital

balance cash payment to Available cash/total 12,5%


maintain strong cash flow

sales
Expected

cash efficiently

Available cash/total Build up strong sales system, recommend customer


cash sales:

90%

per to use month/year order to save money

collection/Available month
cash

Expected

Do appropriate budgeting, follow budget to spend


cash and manage cash

collection/Available
cash: equal or less
than 1

Customer

Customer

Focus on R&D, quality Customer

satisfaction

management
improve

Product: 9 /10

continuously satisfaction ranking Service: 8/10

performance

satisfy customer

to survey on:
Product

Price: 10/10

Base on R&D and Quality management to satisfy


customer needs.
Collect and analyse customer feedback

Customer care: 9/10 Apply total quality management in all processes


32

Service
Price
Customer care
Market share

Conduct various marketing Number of customer Number


activities, focus on outdoor used product
and social activities

Market

share

of

loyal Build up and finish a high skilled and professional

customer is 10,000 marketing team


by by 2014

revenue

Market

Build up and complete infrastructure and facilities to


share

by conduct long term business

revenue in DN: 20% Attend fair, forum for new product or customer talk
Lead time to Design smart processes and Lead time to order
customer

continuously
performance

by 2014
to introduce solution
Lead time to order: Design process and performance indicator in

control Lead time to reply 30 minutes


question

customer care, customer service.

Lead time to reply Provide training for employee to do with customer.

Delay of delivery: question: less than Build up database to record customer information
less than 15 minutes 15 minutes
Delay of delivery:
less than 15 minutes
Branding

Promote a consistent image Customer awareness Customer awareness Invest on design of appearance of infrastructure and

recognition

of a high reliability and about


friendly company

company about

brand
Brand

company product, design of package, transportation

brand: 8/10 by 2014 Choose and develop a message of the company


ranking

customer

of Brand

ranking

of vision

customer: 7/10 by Developing new promotion program to potential


2014
33

market segmentation.

Internal

Working

Create friendly and modern Number of training

business

environment

working environment which Number

processes

provide

environment

learning and growth

for employee leave

Number of training: HR department take responsibility for research and

of 2-3/department each provide appropriate training for employee


year

Rate of individual Number


mistake

Provide clear ladder of promotion, provide employee


of guideline for staffs

employee leave: less Create environment for learning and growth by


than 10% /year

holding discussion, competition, forum, knowledge

Rate of individual sharing


mistake/number
Employee

Take

satisfaction

needs

care of individual Number


of

task: less than 1


of Number

of
of Focus

on

individual,

link

their

need

with

employee

and employee leave

employee leave: less organization goal

change

for Employee

than 10% /year

Enable employee to suggest idea, encourage them to

Employee

contribute more

provide
development

satisfaction rate
Improvement
performance rate

of satisfaction

rate: Build up clear reward and punishment policies

8/10
Improvement
performance

of
rate:

higher than 5%
Rate

of Recruit right people and Number of mistakes Number of mistakes Design and conduct efficient recruitment process.

defect/mistak

develop them

commit

e
Ability

commit: less than 3 Raise commitment of employee


per year

to Design flexible process and Number

of Number
34

of Invest on updating technology, knowledge and skill

adapt

with develop team who are ready employee ideas

change

to adapt with change

employee ideas: >10 Recommend employee for higher education and

Speed of changing /dept per year


technology

training.

Speed of changing Hire profession and high skilled engineer to train

Speed of applying technology:


new

method

knowledge

less employee

and than 6 month

Encourage and reward employee for contributing

Speed of applying idea and suggestion


new

method

knowledge:
Learning and Revenue
Growth

on Research market needs and Revenue

new product

on

provide new product at right product


time, right place to right Profit
people

product

and
less

than 4 months
new Revenue on

new Base on R&D to design develop new product.

product 10 billion Continuously improve and innovate product


on

new per month

on the Conduct beta process before introduce product to

first 6 months of reduce risk


year
Profit
product:

on

new
10%

revenue on the first


6 months

35

Number

of Create

high-skills

environment

for Number

of Number

discussion and contribution employee ideas

employees

How

of Create forum, meeting to raise idea from employee

employee ideas: >10 Reward and promote employee who contribute a lot

many /dept per year

for the company.

employees has MBA 100


graduated
How

MBA Encourage the employees improve skills and ability

Graduated
many 50 engineers each

engineers trained in year


KIA or MAZDA
Revenue per Each employee are trained Revenue/employee

Revenue/employee: Focus on personal development

employee

to provide high performance

10

to enable the company to

VND/employee/mo motivate employee

raise revenue
Frequency of Research
apply
apply

new technology/knowledge

million Provide clear performance indicator, encourage and

nth
Continuously control and improve performance
new Frequency of apply Frequency of apply Research on internet, books to find new knowledge
new technology

new

technology: and make suitable application

technology/k

comply with tendency of the Frequency of apply less than 6 months

nowledge

market and the company new knowledge for Frequency of apply performance and suggest improvement points
direction

training

Hire external consultant periodically to check

and new knowledge for Evaluate performance to find improvement factors

measuring

training

performance

measuring
performance:
than 4 months

36

and Evaluate improvement of performance after applying


new technology/methods
less

Appendix 10: The PMI Analysis.


Changes
Increase

the

number

employees

Plus

Minus

of Improve the performance of Increase the cost (-5)


production (+4)

More supervisors to manage (-3)

Increase the sales (+5)

More risks and accident (-4)

Implication
Expand the business scales (+4)

PMI Score
+6

Increase the capability (+5)

Purchasing new machine

+14

-12

+4

Improve productivity (+4)

Need a lot of money (-5)

Will new machine run effective (+3)

Improve the product quality (+5)

More high-skill engineer (-4)

Reduce the waste of time (+4)

Increase the cost (-4)

+13

-13

+3

37

+3

Appendix 11: Force Field Analysis.


Plan

Forces for changes

Forces against changes

Improve the quality of product and

Recruit high skilled engineer for

Increase the labour cost 5

services 5

production

Cost for recruitment and training 4

Increase the performance 5

Take a lot of time for training 4

Knowledge sharing 4
Reduce defect 5
19

13

Increase capability 5

Investing new factory in Chu Lai Industrial Require huge capital 5

Increase productivity 4

Zone

Increase the administrative 4

Meet the demand of market 4

The

13

expand 3
12

38

organizational

structure

will

Appendix 12: Risk assessment of THACO.


Company name: THACO
Hazards

Lifting and
moving heavy
machinery

Who might be
harmed and
how?
Technician,
employees may
risk injures or
back pain

Date of risk assessment: 1/6/2014


Severity
(Impact)

Likelihood

Use sharp
tools during
production
process

Technician,
employees may
suffer serious
impact

Use electrical
socket/machin
e during
production
process

Production,
employees, shock
electricity

Risk score
(severity *
likelihood)
9

Action to be taken

Action by
whom?

Action by when?

Status

Provide the trained


for driving lift truck
Flitter ensure the
safety

Manager,
training dept.
Manager, EHS
Dept
Supervisor or
flitter
-Manager, EHS
Dept
-Production
Dept, admin
Dept
-Manager, EHS
dept

3rd June, 2014

In process

3rd June, 2014

In process

3rd June, 2014

In process

3rd June, 2014

In process

3rd June, 2014

In process

3rd June, 2014

In process

-Production
dept, training
dept, admin dept

3rd June, 2014

In process

Update safety glove


policies
Put sharp tools in
right place after
using
Update safety
equipment policies
Follow the safety
rule about using
electricity in
production process

39

Machinery
breakdown

Slip and Trip

Technician,
production,
decrease output
volume, delay
time, cost money
to fix machine

All workers may 3

-Production dept

3rd June, 2014

In process

-Production dept

3rd June, 2014

Done

3rd June, 2014

Done

3rd June, 2014

In process

footwear Production

suffer sprains if

provided

to

they

workers

waste

Provide replace
machine
Apply other method

Safety

trip

over

including

Supervisors

Good housekeeping

brick bands
Noise from use Workers

all manager

maintained
2

of equipment

at

times
Supervisor

all
to Production

monitor and talk to manger


manager
work

if

does

noisy Supervisor
start

close by
Appendix 13: H&S Inspection checklist.
No Action
Lighting
Is the level of light for safe and comfortable?
Emergency exits
Are all fire escapes and routes to emergency exit free from obstacles?

X
40

Action

Urgent Action

Comments

Are all emergency escape exits clearly marked?


Are there enough fire extinguishers of the correct type within easy reach and
near each exit?
Are there any first aid cabinets?
Medical and First Aids
Electrical
Are there any exposed, loose or entangled wires or connections
Are all switchboxes, panel boards and sockets provided with suitable covers?
Is all electrical equipment effectively earthed?
Is all electrical equipment regularly inspected for signs of wear?
Fire
Are there enough fire extinguishers in workshop?
Are fire alarm accessible?
Are there any fire prevention equipment or not?
Have any fire dangerous area warning?
Have any fire safety using guide dance?
Production safety
Have fulfil labour protection tools? (Gloves, mask, aprons, etc.)?
Do all the knives have fulfil covers?
Are all cooking tool and equipment put in the safe place?
Are all cooking techniques and machine usages trained by chief?
Facilities
Are the working place installed standard light?
Are facilities in good repair?
Are all relevant facilities useful for production?
Can all machines ability meet the target production conductivity?
Are smoking area available?
Office safety
41

Is the site is dry and cool?


Are electrical equipment covered and kept out of hand?
Are documents, tools, and tablearranged correctly?

Appendix 14: Health and Safety policy in workplace.


This is the statement of general policy and arrangements for:
Name of organisation: THACO
Overall and final responsibility for health and safety is that of:
Name of
Manager

employer:

Nguyen

Hung

Minh

Day-to-day responsibility for ensuring this policy is put into practice is delegated to:
Responsibility of
Action / Arrangements
Statement of general policy
(Name / Title)
(Customise to meet your own situation)
To prevent accidents and cases of work-related ill Nguyen Hung Minh Managing Being involved in the workplace health and safety system.
health and provide adequate control of health and Manager

Wearing the protective clothing when required.

safety risks arising from work activities


To provide adequate training to ensure employees Vu Quoc Bao HR Manager

Supervisor and worker is provided the training course about H&S.

are competent to do their work

Helping new worker, trainees and visitors to the workplace

To engage and consult with employees on day-to- Vu Quoc Bao HR Manager

understand the right safety procedures.


Reporting any problem or accident as soon as possible.

day health and safety conditions and provide advice

Ensuring all accidents and incidents are reported.

and supervision on occupational health


To implement emergency procedures - evacuation in Nguyen Hung Minh Managing Fire extinguisher keep in site office and welfare block.
case of fire or other significant incident. You can Manager

Supervisor ensure escape door marked well and clear all time.

find help with your fire risk assessment at: (See note
42

This is the statement of general policy and arrangements for:


Name of organisation: THACO
1 below)
To maintain safe and healthy working conditions, Vu Quoc Bao HR Manager
provide

and

maintain

plant,

equipment

Keeping the workplace tidy and clean to minimize the risks

and

machinery, and ensure safe storage / use of


substances
Health and safety law poster is displayed:
First-aid box and accident book are located:

At reception
At reception

Accidents and ill health at work reported under


RIDDOR: (Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations) (see note 2
below)
Signed: (Employer)
Subject to review, monitoring and revision by:

Nguyen Hung Minh


Nguyen Hung Minh

Date:
Every:

43

14/06/2014
12

months or sooner if work activity changes

Appendix 15: The policy check list of THACO.


For workers
Moving

Policies check list


Move around working place, follow instruction of
foreman

Performing

Move gently and observe carefully


Do not interfere other work
Use labour protection equips and uniform
Follow standard of training and instruction of
foreman

Using tools

Provide careful, meticulous performance


Follow user manual
Check performance of tools in advance

Using machine

Pay attention to surrounding people and things


Follow user manual
Ask foreman for permission
Check situation of machine in advance

Other notes

Pay attention to surrounding people and things


Turn off all electrical facilities after leaving
Keep tools and material away from harmful source
(heat, electricity, water )
Keep work place dry and clean

For visitors/quality controller/repairman

Moving

Follow instruction of foreman or worker


Do not allowed to move around without permission

Observing

Do not interfere worker


Do not observe machine and production line if there

Checking tools, machine

is no permission and protection equips provided


Follow instruction of foreman or worker
Do not interfere unrequired part
Take care of machine, make careful assembly

Other notes

Do not freely use electric equips and facilities


Do not enter with no permission
Ask for protection equips before entering

Appendix 16: The procedure of Accident Investigation.


1. Co-operation with supervisor and permission of Health and Safety Authority inspector to
2.
3.
4.
5.
6.

investigate the case.


Getting to the underlying causes.
Meeting with the injured worker and talking to witness.
Collecting information and data
Making the accident report.
Reporting to manager

Appendix 17: Incident Report of THACO.


Date and time of inspection or
matter observed

Detail of the issue. Cause and


nature of injury

Name of H&S Representative

Remedial action taken

24/06/2014

A small fire had broken out


around 10 am in production
department of Chu Lai factory.
The main cause is a short circuit
in the main line. Therefore, the
accident make three employees
was injured

H&S Manager
Supervisors

The employees will under


treatment at hospital.

(This record does not imply that the conditions are safe and healthy or the arrangements for welfare at work are satisfactory)
Signature(s) of safety representative(s) Vu Quoc Bao

Date

24/06/2014

Date

24/06/2014

Record of receipt of form by the employee (or his representative)


Signature

Tran Anh Dung