IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management
HOCHIMINH CITY INTERNATIONAL UNIVERSITY
SCHOOL OF INDUSTRIAL ENGINEERING & MANAGEMENT REPORT INTERNSHIP 2
Name: Nguyen Linh Chi
ID: IELSIU1016
Advisor: Duong Vo Nhi Anh Ho Chi Minh city, Vietnam 8/2022 1 IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management Contents
I. INTRODUCTION ....................................................................................................................... 4
1.1 Company’s information ......................................................................................................... 4
1.2 Company’s background and development ............................................................................ 5
1.3 Organizational structure ........................................................................................................ 8
II. PURPOSE OF THIS INTERNSHIP ........................................................................................... 9
III. BUSINESS DESCRIPTION ................................................................................................... 10
IV. TASK.........................................................................................................................................11
4.1 The process of sourcing and purchasing of cosmetics products at Hello Beauty- Central 11
Retail Vietnam .............................................................................................................................11
Figure 4. 1 The sourcing process of Hello Beauty - CRCV ...................................................... 12
4.2 Develop sourcing strategy .................................................................................................... 12
Table 4. 1 Sourcing strategy table for lipstick product type ...................................................... 13
4.3 Generate suppliers’ profile .................................................................................................. 14
4.4 Select suppliers ................................................................................................................... 15
4.5 Negotiate with suppliers ..................................................................................................... 15
4.6 Implement ........................................................................................................................... 16
4.7 Track and Benchmark ......................................................................................................... 17
V. ANALYSIS AND IMPROVEMENT SUGGESTIONS ............................................................ 18
VI. CONCLUSION ....................................................................................................................... 19
VII. REFERENCES ....................................................................................................................... 20 2 IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management List of tables
Table 4. 1 Sourcing strategy table for lipstick product type ......................................................... 13
Table 4. 2 Provence JSC supplier evaluation................................................................................ 17 3 IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management List of figures
Figure 1. 1 Central retail Ecosystem .............................................................................................. 7
Figure 1. 2 Central Retail organizational structure ......................................................................... 8
Figure 3. 1 Organizational structure of Merchandise Department ............................................... 11
Figure 4. 1 The sourcing process of Hello Beauty - CRCV ......................................................... 12
Figure 4. 2 The steps to generate suppliers’ profile ...................................................................... 14 I. INTRODUCTION
1.1 Company’s information
International name: CENTRAL RETAIL CORPORATION (VIETNAM) JOINT STOCK 4 IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management COMPANY
Abbreviated company name: CRCV JSC Tax code: 0312467752
Headquarter: 163 Phan Dang Luu Street, Ward 01, Phu Nhuan District, Ho Chi Minh City, Vietnam.
Representative: JARIYA CHIRATHIVAT Phone number: 28 5416 1608 Date of Issue: 2013-09-14 Industries: Retail
Specialties: Retail, Shopping Mall, Hospitality, E-commerce, Fashion, and Electronics
Company size: 10,001+ employees
Central Retail Vietnam has many subsidiary companies to manage each of their business segments.
The author’s internship took place under a subsidiary unit of CRV, which is
General Trading of Household Products (GTHP).
Organization’s legal name: GENERAL TRADING OF HOUSEHOLD PRODUCTS
ONE MEMBER COMPANY LIMITED
Address: 163 Phan Dang Luu Street, Phu Nhuan District, Ho Chi Minh City Tax code: 0314578955
Main business sectors: Retailing
GTHP is responsible for fully implementing the guidance of the CRCV on business
strategy, financial management, debt management. GTHP is obliged to fully implement
the agreements in the charter, internal rules and regulations of the group of companies. In
addition, GTHP must perform economic contracts assigned by CRCV, coordinate in
organizing business activities with CRCV and other subsidiaries in the group.
1.2 Company’s background and development
Central Retail began as a small family store in in Thailand in 1947, opened by Tiang Chirathivat
together with his son. The founders, with the support of other family members, led the company
from the ground up, raising it to new heights. The board of directors were hailed as visionaries 5 IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management
who revolutionized retail by pioneering neverbefore-seen experiences during a period when trade
was booming. Central Group has risen to become one of Thailand's most well-known brands and
one of Southeast Asia's most profitable retail empires.
Central Retail Vietnam (CRV) is a member of Central Retail - a reputable retail and real estate
group, established in Vietnam in July 2011. The Group's business activities in Vietnam include
services. Retail services in many areas such as: supermarkets, electronics, sporting goods, fashion,
shopping mall development, hotels, e-commerce, with 17,000 employees and serving more than
175,000 customers every day. Central Retail Vietnam owns a diversified retail brand portfolio and
268 stores and commercial centers across the country with a total of 810,000 square meters of retail
in 40 out of 63 provinces and cities. Our brands include:
• Big C, GO! Vietnam: With 37 supermarkets and hypermarkets across the country,
this has become one of the leading retailers of food and essential consumer goods in
Vietnam, supplying more than 40,000 products, serving nearly 70 million customers each year
• Nguyen Kim Electronics Shopping Center: with 71 Centers across the country •
• Lan Chi Supermarket: 25 supermarkets in rural areas in the Northern provinces.
• Robins Fashion Mall: with more than 300 brands from 7 main categories: Beauty,
Fashion, Home & Living, Luggage and Kids
• SuperSports Sports Store: offers a wide selection of customers from shoes,
clothes to exercise machines and accessories from world famous brands such as
Adidas, Nike, Crocs, New Balance, Fila, Speedo, Mizuno, …
• LookKool: provide to customers a wide range of products such as kitchen tools,
accessories, beauty, decoration, fashion, gifts, stationery, etc. with good quality,
reasonable prices and interesting designs
• HelloBeauty: supply to customers health & beauty products at reasonable prices
and dedicated customer service 6 IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management
• HomeMart: Home Mart offers an enjoyable shopping experience with over 6000
products, ranging from household items, kitchen tools, hardware, electronics,
stationery and souvenirs • Kubo: a modern, safe children's play area that brings comfort to young children.
Figure 1. 1 Central retail Ecosystem 7 IS047IU VNU-International University Engineer Internship
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1.3 Organizational structure
Figure 1. 2 Central Retail organizational structure
In general, the organizational structure is divided by business segments so that CRV can have better
control over their field of business, also their employees’ can utilize their own specialty in the
industry that they are working in.
The Head of Segment has the highest authority and advice of all departments. The
Director will plan, administrate and direct all activities of the segment together with all departments’ director.
The Merchandise department will in charge of researching for products, sourcing and selling
those products as well as ensuring that the store has a variety of suitable brands of products and
that it has enough SKUs for continuous operation.
The Marketing department will conduct market research, survey and data analysis for
understanding customer insights and demand. It will also design the store and launch campaign to
build and manage the brands that the store is selling. 8 IS047IU VNU-International University Engineer Internship
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The Finance and Legal department will take care of books, budget, and contracts. It has to make
sure that all the process are operating in allowed budget and in legal procedures. Any new activities
need to be approved by this department to avoid legal and financial risks.
The HR department setting recruitment programs and staff training programs, organizing people,
establishing effective policies or guidelines to enhance the company’s mission.
The Shared Services department provides supporting services for all the above departments,
including logistics, operation and expansion. With the help of Shared Services department, others
can focus on their specialized fields. This department also support with the task of expanding
business to gain larger market share. II.
PURPOSE OF THIS INTERNSHIP
Internship is an important part of the training program. The process of graduation internship is to
help me practice professional labor skills. Besides, I can consolidate and improve the knowledge
learned at school, apply knowledge in practice at the internship. 9 IS047IU VNU-International University Engineer Internship
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Moreover, through this internship, I have the opportunity to interact with officials and employees,
with leaders of the internship unit to learn from experience in all aspects. On that basis, determine
for a career perspective, build, supplement, cultivate for a love of the profession associated with
scientific ideals and a spirit of dedication to serve the cause of socio-economic development of the country.
This internship has been undertaken with the mains objectives are:
• Identify business strategies for buying and selecting product
• Identify process and procedures for company purchases
• Identify visual merchandising practices
• Determine how to successfully design merchandise displays to attract customers to the product
• Identify techniques for creating effective window and table displays
• Assess how to execute the brand presentations and experience for specific markets • • Explore a career path III. BUSINESS DESCRIPTION
Figure 3. 1 Organizational structure of Merchandise Department 10 IS047IU VNU-International University Engineer Internship
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The department is divided into teams of 2 – 4 merchandisers and junior merchandisers who work
together to be in charge of a specific customer.
• Junior Merchandiser: Responsible for receiving information from customers, monitoring and developing samples.
• Merchandiser: Responsible for following approved customer orders to prepare for production process.
Senior Merchandiser is responsible for guiding junior merchandiser and merchandiser according
to customer requirements and quoting product prices for customers. She is in charge of 3 – 5
teamsat the same time. There are currently 2 senior merchandisers in the department.
Merchandising Manager is responsible for capturing all the information of all customers and
directly negotiates with the customer when there are a few factors that have not been agreed
upon by both parties. In addition, she is also responsible for meeting with departments on production problems.
Merchandising Intern is responsible for assisting every member of Merchandising department.
There are a total of 2 interns and the main tasks are listed in part 4 of this report IV. TASK
4.1 The process of sourcing and purchasing of cosmetics products at Hello Beauty- Central Retail Vietnam
With a huge number of brands and product items for the cosmetics industry, sourcing and
purchasing these items will be more than just ordering and receiving goods. At Hello Beauty -
CRCV, this process will include market research in both supply and demand markets, not stopping
at receipt and payment, but until the goods are sold or returned to supplier by Hello Beauty. Below
is a diagram illustrating the purchasing process of Hello Beauty – CRCV. 11 IS047IU VNU-International University Engineer Internship
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Figure 4. 1 The sourcing process of Hello Beauty - CRCV
4.2 Develop sourcing strategy
For existing items, it will be based on scientifically kept data to balance demand, sales, and
inventory, and then determine the quantity to be imported. In addition, the number of imported
goods will sometimes change depending on the batch that the supplier launce promotions. 12 IS047IU VNU-International University Engineer Internship
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Table 4. 1 Sourcing strategy table for lipstick product type LIPSTICK Moisturizing Long lasting Water proof Total: 100 items 40 items 30 items 30 items HIGH B: 8 items C: 6 items A: 6 items 20% MEDIUM E: 20 items D: 15 items F: 15 items 50% LOW H: 12 items G: 9 items I: 9 items 30%
The table above shows how to determine the quantity to order lipstick products based on the needs
of each lipstick product with its own specifications and price range. For example, Hello Beauty
need to purchase 100 items of lipstick. In this case, moisturizing lipstick has the highest demand
while the other two are the same, so 100 items of lipstick needed to purchased is divided to 40
items of moisturizing, 30 items of long lasting and 30 items for water proof feature. The demand
for medium price product is 50%, 20% for high price and 30% for low price. With the data in table
2.1 above, products can be sorted into appropriate requirement and build an efficient sourcing
strategy. In the moisturizing feature, B is in the high price range and will need 8 items purchased,
E is in the medium price range and will need 20 items purchased, H is in the low price range and
will need 12 items purchased. The same method applies to the remaining products. This is the
method Hello Beauty apply to determine the number of existing items that need to purchased.
In addition, the purchasing strategy must also follow the current development strategy of Hello
Beauty. Now, Hello Beauty is focusing on clearing all inventory, so the purchasing strategy must
ensure that the inventory is always at the lowest level, avoid buying too much to stock up, and also
avoid importing new goods, so as not to increase the number of SKUs. 13 IS047IU VNU-International University Engineer Internship
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4.3 Generate suppliers’ profile
This is the step to research the supply market thoroughly, to find and list suppliers that are suitable
for Hello Beauty's business strategy.
1 . Research for potential suppliers
2 . Create a RFI and send to potential suppliers
3 . Collect and update suppliers’ responses
4 . Compare responses and review
Figure 4. 2 The steps to generate suppliers’ profile
In addition to searching for suppliers, sometimes there will also be proactive suppliers to offer.
Hello Beauty will save their information and compare it with current suppliers.
Suppliers’ profile will cover:
• Basic vendor information (locations, size, etc.)
• Vendor background and experience
• Product or service details, capabilities and differentiators
• Customer experience policies
• Technical and security information
Generating suppliers’ profile will allow sourcing process to be even more strategic, efficient and
effective. In addition, profiles improve visibility, ensure accuracy and save time for vendors as well. 14 IS047IU VNU-International University Engineer Internship
School of Industrial Engineering & Management 4.4 Select suppliers
When choosing a supplier, the highest priority is the authenticity of the supplier, including the
required certificates, invoices, and documents to prove their products are genuine. Therefore,
priority will be given to genuine dealers of brands such as L'oreal Vietnam, Unilever Vietnam,...
The next criterion is flexibility in product lines and the ability to constant supply because for the
retail industry, the new and diversified products are launched continuously, so HB does not want
to have to search for new suppliers every time a new product is launched in the market. Finally,
there are customer service policies and pricing programs. Each supplier will have its own program
and policy, so it is necessary to compare prices and refer to the market to choose the supplier with the best benefits.
4.5 Negotiate with suppliers
In order to negotiate a contract with a supplier, it is necessary to first prepare the necessary terms
into a model contract. The sample contract will then be sent to the Legal Department to check and approve the terms.
There is a special type of at Hello Beauty that is consignment contract. A consignment agreement
is a contract that places an item the lessee (or owner) owns with the lessor (or seller) for the lessor
to sell. The lessor takes a commission or fee and then the remainder of the sale price is paid to the
lessee. Listed below are a few important terms that need to make clear in the contract:
• Turnover Share Rates: means the share of Total Gross Sale Amount gained from the sale
of products which will be shared by The Lessee to the Lessor and no less than Minimum Rental.
• Minimum Rental: means fixed minimum amount The Lessee undertake to pay to the Lessor
in case Turnover Share Rates is less than this Minimum Rental.
• Management Fee: means a fixed amount The Lessee share with the Lessor to pay for the
cost of services and facilities provided to shopping mall.
• Stall: means area within shopping mall to sell Products. 15 IS047IU VNU-International University Engineer Internship
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• Products: means the Products provided by The Lessee to be sold in the in Stall in
accordance with this Contract.
• Sale Personnel: means the personnel assigned and paid by The Lessee to directly consult
and sell Products to the customers in the Stall.
• Selling Period: means the selling days begins from the first day to the end of the last day of each calendar month.
• Total Gross Sales Amount: means the total sale amount in the Stall.
• Business Hour: Means the period of opening and closing business activities of the shopping mall in a day.
After completion, it will be negotiated with the supplier, and then based on the negotiation, there
will be changes in some terms to suit the interests of both parties. 4.6 Implement
The ordering process is implemented based on CRCV's POS system, which is a system used to
place and tracking orders. For each SKU, there will be a corresponding bar code to distinguish,
currently managed by Go Code in common with Go Market supermarket. These codes are
integrated into the POS system to manage all items in CRCV.
The store will record all activities of selling all kinds of goods and update their SKU, after that the
data will be aggregated and create a file. This file will be brought to the manager, where he will
determine the exact number of items need to purchase, then the file will be approved and sent to
the inventory controller to transmit information about preparing the warehouse and exporting the
PO. Next the PO will be sent to the supplier for them to check whether the goods are available or
not, and the supplier will the information via email. If the supplier accepts that quantity of the PO,
they will respond with information about the delivery time and delivery method.
Once the goods have been delivered, the goods will be inventory and a delivery note will be made.
This delivery note will be reconciled with the original PO to check for discrepancies. Finally, the
minutes will be re-entered into the system and a red invoice will be issued, by which will make payment to the supplier. 16 IS047IU VNU-International University Engineer Internship
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For products that do not sell well, HB will negotiate with suppliers to support creating incentives for the purpose of selling.
4.7 Track and Benchmark
To evaluate the performance of the supplier, it will be evaluated based on the scale when selecting
a supplier in step 3. Below is the Provence JSC supplier evaluation table and comparison with the previous scale:
Table 4. 2 Provence JSC supplier evaluation. Supplier Name: Provence Category
Weighting Initial Scoring Initial Rating Scoring Rating Quality 30% 9 2,7 9 2,7 Products 20% 8 1,6 9 1,8 Delivery 15% 6 0,9 8 1,2 Support 15% 7 1,05 8 1,2 Cost/ Contract 20% 8 1,6 7 1,4
Initial Total 7,85 Total 8,3
After reviewing the supplier's performance, Hello Beauty will work with them again to provide
information on strengths and weaknesses for them to improve. With a good supplier like Provence 17 IS047IU VNU-International University Engineer Internship
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JSC, will try to improve the relationship by placing PO more frequently, exchanging feedbacks
and proposed solution, exchanging data and market insights, building contracts that are favorable
for building long-term relationship.
Those suppliers with bad performance will also receive feedback to help them overcome, only the
last option is to switch to another supplier.
Merchandising department is one of the busiest team in the company, since the team have to work
with almost every other department to fulfil customer’s order from the beginning to the end, from
the stage of receiving order to delivering finished products to customers. Therefore, as a
Merchandising intern, my main role is to assist merchandisers in the department in the process of
fulfilling orders from customers.
V. ANALYSIS AND IMPROVEMENT SUGGESTIONS 18 IS047IU VNU-International University Engineer Internship
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After 4 months of working with people with deep expertise colleague, the author has realized that
solid knowledge can help adapt to the new environment better, learn the job faster and be able to
apply understanding. know that on many practical tasks. Thanks to the in-depth lectures of lecturers
at Foreign Trade University the author was able to understand the general principles and daily tasks
done in the process, about sourcing process and dealing with suppliers.
Continuously improving professional knowledge is extremely necessary to be able to advance in
your career and have a high position in the industry. In addition to those professional knowledge,
practical experience is also extremely important because reality will be different from knowledge.
There will be many risks as well as special cases that have never happened before.
I would like to recommend some solutions to support sourcing activities more effectively. The first
thing is to apply technology to research and data input tasks, using human resources into these
tasks is both laborious and inefficient, also bear risk of inaccurate data. By using automation, it
will both save time and reduce risks, also the labor can be utilized for other tasks.
Next is about the system that Hello Beauty is using. While saving cost by using the same system
as GO! Supermarket, using the same identification of products would be detrimental, as inaccuracy
in the classification of product will affect the sourcing strategy of not only Hello Beauty but also
Go! Supermarket. CRCV should make separate identification of products for each segment of
business so that the data could be managed more precisely.
Lastly, although CRCV have good relationships with its suppliers, they do not have a
communication system with its suppliers. While everything is communicated via email, some
information would arrive late or process incorrectly. While operating in 3 segments, CRCV sells a
wide variety of products and therefore has a large number of suppliers. As one of the biggest
retailers in Vietnam, CRCV should have an effective system to better manage their enormous number of suppliers. VI. CONCLUSION 19 IS047IU VNU-International University Engineer Internship
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Due to the development of the economy and the impact of the global integration process, Vietnam's
retail market is undergoing significant growth. Because many types of retail are in the early stages
of growth and development, market competition is heating up.
People's incomes are increasing as a result of economic progress, and the need for self- care is
increasing as well. Cosmetics are gradually becoming familiar consumer products as both sexes'
interest in appearance grows. Not only that, but it has become a must-have item for people of all
ages and across all customer categories.
Central Retail began to penetrate in Vietnamese market from 2012 and has grown to become one
of the largest retailers in Vietnam. They operate in three business segments which are food,
nonfood (consist of fashion and hardline) and real estate. Hello Beauty is a health and beauty retaler
brand in the fashion segments of CRCV, establish to materialize the mission of making customers'
lives easier and offer authentic cosmetics products from both domestics and international brands.
Through the internship as a merchandise intern at CRCV, I have now obtained a bigger picture of
how sourcing process is carried out at Hello Beauty, and in retail industry as a whole. The
internship also points out limited knowledge of me and encourage me to pursue more learning not
only from books but from reality. VII. REFERENCES [1]
Fast Accounting website: https://fast.com.vn/ [2]
Central Retail Vietnam website: https://centralretail.com.vn/ Advisor Evaluation 20