Award for TPM Excellent, Category B
Branch of Vietnam Dairy Products Joint Stock Company(Vinamilk) - Vietnam Dairy Factory
1 Organization profile:
Formally known as Southern Coffee Dairy Company, the company was established on
August 20, 1976, based on three dairy factories from the old regime. The company was a
100% State-owned enterprise. On November 2003, the company listed IPO and changed its
name to Vietnam Dairy Products JSC (Vinamilk).
The main businesses are the development, production, and sale of dairy products.
Vinamilk has expanded to 46 subordinate units (Figure 1‑1), including one headquarter, 5branches, 16 factories (14 in Vietnam and 2 overseas), 13 dairy farms, 2 warehouses, 8subsidiaries, and affiliates in Vietnam and over the world.

Figure 1-1 Vinamilk's subordinate units

Vinamilk has developed more than 250 SKUs, varying from yogurt, fresh yogurt, freshmilk, UHT milk, powder milk, cheese, ice cream, condensed milk, and fruit juice.
Inaugurated in 2013, Mega factory is the biggest and the most advanced plant of all 13
plants in Vinamilk. The plant is dedicated to the production of various UHT-drinking dairy
products such as UHT liquid milk, soya milk, ready-to-drink formula drinks, and Juicy
beverage.
The plant is equipped with Tetra Plant Master technology, which enables the plant toautonomously monitor, manage, and continuously control the production process andproduct quality.
The plant has been growing since 2013, with business performance constantly improving.

GeneralThe capacity at that time was 400 million liters per year. With significant plant improvement,
as of now, the plant’s capacity has reached 800 million liters of milk production per year.
The shop floor is divided into four areas: processing, filling, DE, and smart warehouse. Theprocessing area consists of 4 pasteurizer lines, and 9 UHT lines. The filling areas include 3rooms: A1 with 16 machines, A2 with 6 machines, and A3 with 9 machines. DE area consistsof 31 DE lines.
Mega Plant has one Plant Director, one Technical Director, one Production Director, andsix departments. There are 474 employees. The organizational structure is as below:Figure 1-2 Mega plant Organization Structure

The plant consists of 474 employees, 57% work in Production Department, and 50% havebeen working for more than 5 years. Most of the employees are under 40-year-olds.
Furthermore, 57% of employees have college’s degree or above.

2 Milestone on the Journey of Manufacturing Excellent:
2.1 External factor:
Firstly, sales of various drinking milk products are estimated to be increased, to be precise
the volume growth of all products will be increased by at least 50% (Figure 2-1).

GeneralFigure 2-1 Forecast sales of various UHT drinking dairy products

Secondly, Vinamilk is struggling to claim a bigger share of the market as its growthpotential diminishes in the face of stiff competition from fast-growing rivals (Figure 2-2).
From 2016 to 2018, Vinamilk’s shares increased by 1.8%, however, from 2019 to 2020, theshares increase was only 0.2%. On the other hand, Vietnamese consumers are shifting its
consumption toward higher quality labeled milk with competitive price.

Figure 2-2 Company shares of drinking milk products

From 2016 to 2021, skim milk powder price increased by 55%, and labor cost increased
by 40% (Figure 2-3). Vinamilk also faces challenges related to transportation costs, whichrose 20% domestically and 500% globally in 2021 due to the COVID pandemic.

GeneralFigure 2-3 Raise in skim milk powder and minimum wage per month

2.2 Internal challenges:
From the 2013-2018 period, due to the 65% increase in volume, the plant decided toinvest in 16 new filling lines. The expected production capacity was expected to reach 800
million liters per year after the investment.
From the 2019-2022 period, due to the unforeseen COVID pandemic, production volume
decreased by 17% leading to shut down of 8 filling lines. And in 2022, 2 filling lines weretransferred to another plant in Cambodia.

Figure 2-4 Plant capacity throughout the years

2.3 An upgrade of management system:
From the external and internal challenges, the plant has realized that an upgradedmanagement system is required to maintain sustainable development. Therefore, the TPM
system have been implemented in 2019 to improve management and to gain a competitiveedge for the plant.

General2.4 Mega’s TPM timelines:
To achieve plant strategy and vision, the TPM project was introduced in September 2019.
TPM overview training was conducted on October 19. And on December 2019, total
cleaning was performed with thein the presence of the management level. After 6 months ofpreparation and training, the TPM Kick-off Meeting was held on March 2020.
Mega plant received Greenlight Audit in July 2022; and Health-check Audit on October
2022 by JiPM expert. The evaluations were satisfactory for both audits.
On 2023 Mega Plant received JIPM first audit in Jun & final audit in Dec.
A brief timeline of TPM activities in Mega plant are shown in (Figure 2-5):

Figure 2-5 Mega's TPM timeline

3 Benefits achieved:
3.1 Tangible results:
With the implementation of TPM, the plant performance has significantly improved inmany aspects. The plant has successfully tackled many unforeseen issues, in terms ofenergy/raw material/process improvement, thus saving the plant over 113 billion VND.
Secondly, the overall efficiency of machines has greatly improved, as shown in a rise in OEE
performance in Line A1 and 2A for 3 years. Another astounding achievement is the quality
aspect, as the plant has maintained zero loss in defective products. Another zero loss is thesafety in the plant, this year the plant has not recorded any safety-related accidents, and thesafety index has been maintained for 4 consecutive years.

General3.2 Intangible results:
Mindsets from managers to employees change, and now all focus on one shared goal. The
overall skill of operators/technicians increases significantly; thus they are more responsible
with their machines. More and more released training/OPLs/SOPs help create a learning
environment in the factory, which enables a more active learning curve for all employees.
Moreover, the collaboration between departments becomes smooth due to activities such as
Tags/DMS/SEA/Kaizen improvement teams.
With the establishment of a recognition system, employees are recognized for theircontributions to the plant. This creates an enthusiastic atmosphere; employees are engaged
more in different activities, especially in improvement activities, and employee satisfaction
drastically increased.
Especially, operators are active and care about the machines more than ever. This leads
to numerous suggestions and improvements to machines/ procedures, which in turn improve
work performance and reduce unnecessary costs.

3.3 Benefits achieved:
Below are few benefits achieved of PQCDSME:
CategorySSSSQ
Q/DQQPCCCEIndex(Calculation Formula)# of accidents off work
# of accidents w/o offwork
Safety index (LTAR)
Total recordable accident
rate (TRAR)
Defective products/batch
Missed products due tosubjective factors% of defective products
reworked in-line
Quality Index
OEE
Packaging materials
Waste
Milk Waste
Energy cost
Waste/ tons of products#/yearKick off/TPM
Started (or lasttime awarded)
NA (*)#/yearNA (*)

0# per 1 million hours

NA (*)

0# per 1 million hours

NA (*)

0batch/year

00%

0%0%%

NA (*)

0.05%%%

98.31%
70%

99.95%
79.95%%

NA (*)-0.78%
VND/pack
kg/ ton product

NA (*)
53.07
NA (*)

-0.47
51.1
3.1

Unit

Actual Status
2023
0General

EM
M
M
M% Green energy# of employee
suggestions# of employees
participating in teams
Employee satisfaction# of internal trainers
developed%

NA (*)

57%#/yearNA (*)

100%

NA (*)

100%

Score %63.40%85%#/yearNA (*)

15(*): The KPI result is not available yet in 2019

4 Key of our manufacturing excellence:
After implementing TPM for 3 years, the board of directors is aware of the importance of
TPM in daily activities. In term of Vinamilk, the headquarter will form a TPM department
and implement TPM in other plants in Vinamilk. This surely will create a sharing forum
between factories and headquarter to learn from each other, thus more suggestions areimplemented.
Another goal is to set up and standardize learning documents, and in the future, a learning
library including TPM activities/tools. With this implementation, new employees will takeless time to learn their roles and can apply TPM tools in a such short time.
Finally, the plant will sustain the current pillars and implement the last two pillars into
TPM activities, to strive for World Class Manufacturing.

5 Contact:
Branch of Vietnam Dairy Products Joint Stock Company (Vinamilk) - Vietnam Dairy
Factory
Lot A_4,5,6,7_CN, NA7 street, My Phuoc 2 Industrial Park, My Phuoc Ward, Ben Cat
Town, Binh Duong Province, Viet Nam
Phone number: (+84) 2743559988
Fax number: (+84) 2743559960

General