BACH KHOA UNIVERSITY

SCHOOL INDUSTRY MANAGEMENT

Vinamilk’s Manufacturing
System

Student’s name: Hoang Minh Bao Tran - 1652624

Phan Thanh Cao Nha - 1552256

Nguyen Ngoc Tuong Vi - 1652697

Lam Hong Le - 1552193

Subject: Manufacturing System

Professor: Dr. Duong Vo Hung

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

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

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

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

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

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

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

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

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

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

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

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

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

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

There are 3 main purposes to do this report:

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

II. Company overview

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

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

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

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

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

- Integrity: Integrity and transparency in actions and transactions.

- Respect: To have self-respect, to respect colleagues. To respect the Company and partners.
To cooperate with respect.
- Fairness: To be fair with employees, customers, suppliers and other parties.
- Compliance: To respect the established ethical standards and act accordingly
- Ethics: To comply with legal regulations, the Company’s Code of Conduct, and the
Company’s procedures and policies.

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

Picture 1. Vinamilk’s Philosophy

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

III. Production process

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

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

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

Picture 2. Raw fresh milk receiving area

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

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

Picture 4. Centrifugal bacteria separation machine

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

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 Picture 5. UHT sterilization machine

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

Picture 6. Filling system

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

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

Picture 7. Automatic LGV robots

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

Picture 8. Wamas software and Tetra Plant Master automation

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 Start

Select cow breed, bring engineer to guide farmers to raise

standards

After milking, the milk was Not satisfactory with residue No purchase
taken to the transfer station
conducting the test analysis

Sampling into a cold storage tank

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

Take the amount of milk being tested into cold storage

tank, undergoing processing by modern equipment

Transfer to a container ready for processing in UHT

The LGV robot converts finished pallets to smart

warehouse areas, transporting packages, packaging

Tetra Plant Master automation system integrates ERP to

produce finished products

Finish

Picture 9. Overview by diagram

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

IV. Production Planning

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

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 Activity 1

Activity2
Farmers
Activity 3

Raw milk Retailers

Processing Distribution Customers
production ,stores

Imported raw
materials

: Product line

:Information line

: Cost line

Picture 10. Vinamilk’s Production Planning

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

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Milk purchased from farms must always meet the standards established by Vinamilk and domestic
dairy farms. Vinamilk is expected to continue importing premium breeds from Australia and the
USA to meet the needs of new breeders.

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

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

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

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 References

 Saenger, C. et al., “Contract farming and smallholder incentives to produce high quality:
Experimental evidence from the Vietnamese dairy sector”, Agricultural Economics 44 (2013) 3,
297-308.
 Vinamilk Supply Chain Management Project - Van M. Vu. V V? Follow -
https://www.slideshare.net/ssuser17491c/vinamilk-supply-chain-management-project-van-m-
vu?fbclid=IwAR2NgX0qT3kEGyRELABXQ08HiWQ9IfZFhKhCi4znxHdDDEyQ6NJJxPYR5
VY
 Yêu Cầu 1 Quy Trình Sản Xuất Sữa Tươi Tiệt Trùng Của Vinamilk 1 Giới Thiệu Về Công
Ty Cổ Phần Sữa Vinamilk Hoang Truyen -
https://www.academia.edu/23938454/Y%C3%8AU_C%E1%BA%A6U_1_QUY_TR%C3%8CN
H_S%E1%BA%A2N_XU%E1%BA%A4T_S%E1%BB%AEA_T%C6%AF%C6%A0I_TI%E1
%BB%86T_TR%C3%99NG_C%E1%BB%A6A_VINAMILK_1_GI%E1%BB%9AI_THI%E1
%BB%86U_V%E1%BB%80_C%C3%94NG_TY_C%E1%BB%94_PH%E1%BA%A6N_S%E1
%BB%AEA_VINAMILK?fbclid=IwAR39KbU_aZA7bR0tpof6cqv4bapn7pnOBmgJbbfnXJLL
xouUSLio3_RjkqY
 Tiểu Luận: Công Tác Quản Trị Chiến Lược Tại Công Ty Sữa Vinamilk

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

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

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

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