ASSIGNMENT 1 FRONT SHEET

Qualification BTEC Level 5 HND Diploma in Business

Unit number and title Principles of Operations Management

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Student name Phan Trung Anh Student ID GBH211266

Class GBH1110 Assessor name

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making a false declaration is a form of malpractice.

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I. Introduction

The author was recruited by a company to be the CEO of the beverage corporation Hoa Phat. The CEO
asked the author for an operational improvement plan consistent with the company's strategy. In
particular, the director wants the author to create an operations analysis report to evaluate all operational
processes and make recommendations to improve the effectiveness and efficiency of ongoing operations.
The author's main task is to provide an understanding and assessment of the operations management and
processes in the report

Figure 1: Logo of Hoa Phat Company (Hoaphat, 2023)

Hoa Phat is Vietnam's top industrial manufacturing group. Hoa Phat began as a business in August
1992 that traded construction equipment and progressively branched out into furniture, steel pipes,
construction steel, refrigeration, real estate, and agriculture. Retribution. Hoa Phat formally listed shares
with the stock code HPG on the Vietnam Stock Exchange on November 15, 2007. Hoa Phat Group is the
market leader in Vietnam for construction steel and steel pipes and ranks fifth for galvanized steel. Hoa
Phat is currently ranked among the top five private companies in Vietnam, the top 50 most successful
publicly traded companies, the top 30 companies that contribute the most to the Vietnamese state budget,

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and the top three companies with the biggest charter capital in the market. Vietnam stock market: The top
ten stocks with the highest market capitalization (Hoaphat, 2023).

II. Main content

1. Discuss the role and contributions of operations management across the value chain
1.1. Definition of operations management

Operations management is one important area of business management, which is concerned with
designing, organizing, and managing the processes that generate products and provide services in an
efficient manner to satisfy customers. It entails keeping an eye on many facets of an organization's
operations to make sure everything runs smoothly, effectively, and economically (N Slack, 2016). When
producing goods or providing services, operations management entails planning, organizing, and
directing the process of converting inputs into outputs. In order to ensure efficient production and
distribution of goods and services, this field is concerned with managing resources, including information,
technology, human resources, and equipment (Castellanos, 2005).

1.2. Transformational model

1.2.1. Definition of the transformational model

Figure 2: The Transformation Process (Relivingmbadays, 2023)

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In operations management, the transformation model is all about turning inputs into outputs. Processes
for manufacturing or services can be used to accomplish this. Enhancing the information to make it more
valuable than the sum of its parts is the aim of the transformation process. The input needs to be changed
into something more advantageous for the client to add value. Every link in the transformation process
adds value to the finished product, making it possible to think of it as a value-added chain (Ivanov, 2021).

For the Input resources phase, in phase, there will be two main parts: transformed input and
transforming input. For the transformed input section, there will be three elements Materials,
Information, Customers. The differentiation between these three elements, for materials handling, is
one of the most common process conversions in operations management. This process entails taking raw
materials and turning them into final goods. Physical goods or services may be final products. Moreover,
Information is to transform raw materials into finished goods by packaging, assembling, and
manufacturing. Information processing is the use of data and information for tasks related to control,
monitoring, and decision-making. Finally, customers are one of the main components of variable
resources because they are dedicated to creating the required specifications for the required goods or
services. and market demand, therefore customers are considered resources and have a significant impact
on the process of changing products and services (Ojiako, 2008).

The transformational model applied in Hoa Phat Steel Group will illustrate one process among
many processes that the group has such as real estate, agriculture, etc. Specifically, this model will
be applied in the production of raw steel, a raw material invested in by HPG and a core product of
the group. For example, the input resources phase when applied to Hoa Phat Steel Group. Specifically,
the company has applied transformed resources in materials. The company cooperated with the
manufacturing company partner for the Dung Quat steel project, the largest iron ore mining group in
Australia, and visited Port Hedland - the world's largest iron ore export port with 500 million tons/year.
Moreover, transforming resources is the process of transforming transformed resources to create final
products or services that are used through facilities, specifically machines that Hoa Phat Group has
applied. Hoa Phat Group has used transforming resource facilities through the installation of the
most advanced automation technology in the mining industry to assist in increasing the large mining
capacity of iron ore in Australia (Hoaphat, 2020).

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For the transformation process stage when applied to HPG Group. At this stage, Hoa Phat will take
iron ore raw materials to produce and create final output products. First, various grades of iron ore,
differing in composition and size, undergo processing and are blended in specified proportions, combined
with coke, limestone, and dolomite, then introduced into the blast furnace to produce molten iron. Second,
the molten iron is transferred to oxygen-blowing converters and refining furnaces to manufacture steel
grades tailored to meet market demands, using a casting system to cast various billet types - from raw steel
to saleable finished products. Third, at the steel rolling mill, square bills are rolled into finished
construction steel, including rebar and coil steel; while flat bills are rolled into hot-rolled coil (HRC)
(Hoaphat, 2023).

In the final stage, which is the output, Hoa Phat focuses solely on delivering products that optimize
quality in terms of customer satisfaction. The products, resulting from the processes spanning from input
resources through the transformation process and culminating in the output product, represent the
highest-quality steel produced by Hoa Phat for consumers. With an extremely low impurity rate, steel
refined from ore exhibits characteristics of high flexibility, durability, and elongation. Consequently,
steel refined from ore possesses superior physical and mechanical properties, enabling the production of
higher-diameter and higher-grade products. In Vietnam, only Hoa Phat Steel is capable of rolling products
up to D55 high-grade standards (Hoaphat, 2023).

1.3. Dimensions of operations

1.3.1. Definition of dimensions of operations

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Figure 3: A typlogy of operations (Linkedin, 2020)

All operations processes share one feature: they all take 'inputs' such as raw materials, knowledge,
capital, equipment, and time and convert them into outputs (goods and services). They accomplish
this in a variety of methods, the most important of which are known as the Four V's: volume, variety,
variation, and visibility. First, The Volume Dimension is directly related to several performance criteria
such as utilization, standardization, and so on. A product with a larger volumetric scale allows the
organization to place specialized machinery, resulting in improved efficiency and defining sop for each
phase. The volume reduces the need for multi-skilled people (lower labor costs) because one
person/machine/resource can be assigned to one specific job without worrying about resource utilization.
All of these characteristics, when combined, drastically reduce the product's cost due to economics of
scale. Second, Variety is the processing of raw materials (goods/services) that requires a number of
operations before the final output is achieved/delivered. The resources used determine the capability of

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any task to be conducted. Third, Variation is the third of the four Vs - the third "dimension" of
operations. It relates to the degree of change and predictability of demand that a company's operating
faces. Finally, Visibility is the value that the resources add to the process, which is ultimately achieved
directly by the customer. We are able to gauge the extent to which customers engage with the
product/information and its level of efficacy (Chiarini, 2015).

In terms of volume, Hoa Phat's presence in the global steel market is highly conspicuous. In 2020, Hoa
Phat produced 5.8 million tons of steel, ranking 51st in the World Steel Association's (WSA) list.
Compared to its Vietnamese counterpart, Formosa, a steel conglomerate situated in the Vung Ang
Economic Zone, Ha Tinh, Hoa Phat leads by 8 positions, securing the 59th position among 80 members in
the WSA list. This suggests that HPG plays a pivotal role in high steel output and holds significant
potential for further development, contributing significantly to Vietnam's steel economy
(Vietnambiz, 2021).

In terms of variety, Hoa Phat has employed a diverse range of technologies, enabling the company to
diversify its product line. Specifically, HPG has made significant technological advancements in non-
refining processes, employing technologies such as the converter-to-continuous casting process. With this
technological process, molten steel post-conversion requires refining before entering the continuous
casting phase - akin to producing steel from scrap metal using electric furnaces. Additionally,
innovations such as coke oven gas, and oxygen blast furnaces as substitutes for coke blast furnaces
are also new technologies enhancing the quality of HPG's products. Continuously developing new
products, HPG aims to serve high-rise construction projects, introducing a wide array of diverse products
including wire rod steel and welding rod steel, among others. These technological advancements and the
array of supporting products significantly contribute to the company's production processes, leading to a
high variety of evaluations when analyzing Hoa Phat Corporation (Hoaphat, 2019).

In terms of variation, there has been a significant upsurge in the fluctuation of steel production demand
from customers in recent years. The growth rate of Vietnam's steel industry has consistently been in the
double digits. Domestic enterprise crude steel production in 2021 reached 23 million tons, marking a
4.6-fold increase from 2011 and over 70 times higher than in 2001. Hòa Phát Group's market share in
construction steel has notably risen from 1% in 2002 to over 35% presently, leading the Vietnamese
market. It can be observed that the analysis of variation within the steel industry, both broadly and

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specifically within HPG, depicts persistent high levels of variability and growth. This demonstrates the
substantial potential of the steel industry domestically and internationally, contributing significantly to the
nation's financial resources (Trituemoi, 2022).

Regarding visibility, HPG has affirmed that the steel production process within the corporation is an
enclosed, environmentally friendly process. Hence, customer intervention in the production or service
supply process of the conglomerate is strictly prohibited. HPG's customers will only provide input
through product requests, specifying steel quality based on customer-specific size requirements. As a
result, HPG's visibility will be evaluated at a low level. Through 4Vs, it can be determined that HPG's
operational management has the operating characteristics of the mass production-mass process. Because
the steel market in HPG is one of the largest markets and needs quality steel in large quantities to meet
domestic and foreign needs (Hoaphat, 2023).

1.4. Relationship between operations function with others

1.4.1. Definition of the relationship between operations function with others

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Figure 4: The relationship between the operations function and other core and support functions of the
organization (SANTRA, 2018).

To begin with, any organization's operations are its beating heart, and they are interdependent with
all other organizational functions. An organization's departments work together to accomplish shared
goals both personally and collectively. They are only relevant as a component of an intricate web of
organizational functions and cannot exist or prosper in isolation. First, there's a common collaboration
between marketing and operations management. Marketing determines what the consumer needs and
wants, and operations management makes sure that the production of goods or services satisfies those

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needs. Second, operations provide information about the usefulness of a new product to product
development, or the R&D department as it is commonly known. The operations also assess whether the
product can be produced commercially. To stay ahead of the competition in the business, operations
depend on the R&D department for assistance with new product ideas and technological updates. Third,
operations and human resources collaborate on tasks pertaining to manpower. Operations and HR work
together to ensure that operations have the talent they need, both quantitatively and qualitatively. HR then
makes sure that operations have access to these resources (Piercy, 2007).

1.4.2. The relationship between operations functions with others

The correlation between the operations function and marketing function is applied within the HPG
steel conglomerate. HPG's marketing department extensively acquires information by directly engaging
in the sales promotion of the company's steel products. Regular sales engagement with various prominent
partners both domestically and internationally enables this department to refine the sales schedule,
organize, and streamline the inventory pertaining to steel products. Furthermore, consistent market visits
by this department facilitate a substantial learning process, thereby providing valuable insights to the
operations department. These insights aid in adjusting operational information, refining production
processes, optimizing product parameters to reduce costs, and enhancing export volumes vis-a-vis
competitive counterparts. Specifically, the Marketing department evaluates the consumption trends
of hot-rolled coil (HRC) steel products, estimating an annual demand of approximately 12 million
tons. Importantly, Vietnam still heavily relies on importing 60% of this type of steel, particularly for
HRC in the domestic market (Hoatphatdungquat, 2023).

The relationship between the product/service development function and the operations function is
applied within the HPG steel corporation. Through the Marketing department, the anticipation of the
steel market demand in Vietnam for hot-rolled coil (HRC) was foreseen, and confirmed by the Operations
department. This collaboration with the product development functions led to the creation and delivery of
a unique HRC steel product to the market, developed by the HPG conglomerate. Specifically, hot-rolled
coil steel finds extensive use across various industrial sectors. This new material facilitates easy
application for construction and product development in companies. In the automotive and engine
manufacturing sector, for instance, hot-rolled coil steel is employed in producing engine components
like gears, shafts, and various other parts (Hoatphatdungquat, 2023)

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1.5. Analysis of Role Effectiveness of OM

The analysis of the operations' role indicated that the HPG steel conglomerate has been able to
compete with its large-scale industry rival, Formosa Group. This competitiveness has been achieved
through an appropriately structured production model and collaboration between departments such as
marketing and product divisions, which have boosted Hoà Phát's confidence in competing against the
major player, Formosa. According to Hoa Phat's Chairman, Tran Dinh Long, after a four-year span, the
entire project was completed and became fully operational by January 2021. Since then, the production
capacity of raw steel and the introduction of various new products into the market, such as hot-rolled coil
steel, have enabled Hoa Phat to surpass Formosa Ha Tinh, becoming the largest steel producer in Vietnam
and the Southeast Asia region. The suitable production model has significantly contributed to the
increasing and stable production output at the Dung Quat Complex, leading to a substantial surge
in Hoa Phat's market share in the construction steel segment from 1% in 2002 to over 35% by 2023,
positioning it as the leader in the Vietnamese market. For the objectives of Hoa Phat Steel
"Becoming an industrial production group with leading quality, in which Steel is the core field". HPG's
goal will be quality because Hoa Phat products are always of high quality, clean and environmentally
friendly, even in the group's closed production process. Meets a large amount of steel demand globally. In
addition, the flexibility factor is also one of the secondary factors of HPG Group, as HPG's products and
services are also diverse such as rolled steel, hot rolled steel, etc. That helps the group meet market and
customer needs. The relationship between operations management and organizational objectives helps
HPG to link the steel production process, from the objective towards HPG's main goal of quality, which
will make the company's operations management more organized and production. better quality for the
company's steel products. (Trituemoi, 2022).

Figure 5: Operations management uses resources to appropriately create outputs that fulfill defined
market requirements

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In line with Hoa Phat's organizational goals, the company follows its mission, vision, and core
principles in managing operations. The mission statement prioritizes the delivery of top-notch
products, contributing to an improved quality of life, and earning customer trust. This strategy supports
Hoa Phat in meeting its objectives, focusing on specific markets, and fulfilling its needs by dedicating
efforts to satisfying its customer base. As a result, it leads to meeting the demands of their clientele.
Additionally, the company's vision is centered on becoming a leading manufacturing conglomerate, with a
primary focus on the steel industry. Consequently, Hoa Phat's product outputs are related to steel, which
aligns with their overarching goal of being an emerging leader, establishing the company as a standout
player in the steel industry and making significant contributions to its growth. Through the
implementation of Hoa Phat's transformative model, the company efficiently utilizes resources, starting
from iron ore, to create and manufacture steel products effectively. This streamlined process supports
the manufacturing and global distribution of steel for large-scale projects across the world (Hoaphat,
2023).

Figure 6: Operations management uses resources to appropriately create outputs that fulfill defined market
requirements

The comparison among three prominent companies in the Vietnamese market, namely Hoa Phat
Corporation, Vinamilk, and VinFast, listed on the stock exchange, reflects their diverse production
processes and objectives. These differences stem from their distinct industries: Hoa Phat specializes in
steel, Vinamilk in dairy products, and VinFast in automobiles. On the one hand, Vinamilk's

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distinguishing factor lies in its resources, primarily milk, which directs its production processes geared
towards cost optimization and efficiency, aimed at processing milk to create a variety of dairy products.
Contrary to the other two corporations, Vinamilk's organizational objectives focus on "delight," driven by
their business philosophy emphasizing customer satisfaction and happiness (Vinamilk, 2023). On the
other hand, VinFast, an automotive company, heavily relies on imported resources despite its sector.
Their products prioritize durability and superior quality for customers. VinFast's approach to resource
appropriation centers on precision, differing in their assembly processes due to the nature of car
manufacturing. Consequently, VinFast's organizational objectives are under refinement, prioritizing
customer satisfaction and current market demand fulfillment (Vinfast, 2023).

In summary, the comparison between two distinct industries—automotive (VinFast) and dairy
(Vinamilk)—in contrast to the steel industry (Hoa Phat Corporation), shows differences in input resources,
production processes, outputs, and business objectives. Nevertheless, all companies aim to deliver high-
quality products that meet market demands and customer needs.

2. Contribution of effective supply chains to the organization

2.1. Supply network

Figure 7: Supply network of Hoa Phat Steel Group

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A supply network can expand to encompass a company's clientele. The primary customers directly
purchasing from the company are referred to as the first-tier customers. If these customers further sell the
products to other entities, these subsequent buyers are categorized as second-tier customers. For instance,
a watch manufacturer might distribute their products to a watch distributor (considered the first-tier
customer), who in turn supplies retail stores (identified as second-tier customers) (Levalle, 2017).
Interacting with its clientele, Hoa Phat Corporation primarily serves prominent distribution entities, such
as extensive construction conglomerates and specialized steel manufacturers that provide construction
materials, machinery-related resources, and specific automobile components. These foremost clients,
major distributors, mirror the service procedures for subsequent retailers downstream, including projects
seeking materials and repair centers needing spare parts for their construction projects or final products.
Additionally, at times, these retailers may directly access manufacturing facilities to acquire raw materials,
bypassing intermediaries and streamlining the process. While this direct approach necessitates retailers to
allocate time for visiting these manufacturing sites, it aids in reducing a portion of the customary expenses
typically associated with intermediary wholesalers (HoaPhat, 2023). Regarding suppliers, Hoa Phat is
among the primary steel suppliers for major distributors both domestically and internationally.
Consequently, the importation of resources or machinery to serve customers must ensure both quality and
an adequate quantity. For the conglomerate's first-tier suppliers, there are two principal sources that the
corporation requires in large quantities: iron ore and coal bricks. According to Hoa Phat Corporation's
Chairman, Tran Dinh Long, in 2020, the company imported 13 million tons of ore and 7 million tons of
coal from suppliers in Australia. Moreover, to exploit such significant resources, the Australian plants also
need to purchase machinery and engage with second-tier suppliers—corporations providing machinery,
equipment, and raw materials like oil—to ensure the proper extraction and timely supply to the HPG steel
conglomerate. Through the supply network, one can gain an overview of the supply and demand
landscape operating within the production process of HPG (Vietnambiz, 2021).

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Figure 8: Operations structure and scope (Chapman, 2020)

The structural aspects and extent of operations, when applied to HPG, encompass three key factors that
influence the organization: configuring the supply network, the capacity of supply network operations, and
the location of supply network operations. In terms of configuring the supply network, when analyzed
within HPG, the seamless organization of elements in the supply process aids HPG in potentially
smoother production and export processes. The company has identified credible sources by selecting
appropriate suppliers such as construction contractors, automobile manufacturers, and reliable raw
material suppliers, establishing optimized production procedures that focus on delivering high-quality
products and services to customers. Moreover, concerning the location of the supply network, it stands as
a structural strength benefiting HPG in its supply processes. HPG strategically places its supply chain
across various locations nationwide, encompassing raw material distribution points and factories, with
plans for international expansion. This strategic positioning simplifies the distribution process to first-tier
customers, ensuring timely deliveries and bolstering credibility, thereby enhancing HPG's production
capacity for its clientele (Hoaphat, 2023). Regarding the scope of HPG, the company's scope is vertical
integration. Hoa Phat Group has applied its market expansion strategy effectively in building large
factories to produce steel in many locations such as Dung Quat, Hung Yen, Hai Duong steel factories, etc.
Applying the scope of the operations' supply network, specifically vertical integration or structures
such as location supply network, and configuring helps HPG save operating costs and control the

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quality of the group's steel products to manage risks and optimize costs for the strategy "Becoming
a leading industrial manufacturing corporation in which steel is the core product" (Hoaphat, 2015).

2.2. Capacity management

2.2.1. Definition of capacity management

Fig
ure 9: Capacity management of Hoa Phat Group

Capacity management involves ensuring that a company optimizes its potential activities and production
output consistently, regardless of circumstances. It quantifies a company's capability to accomplish,
manufacture, or market goods within a specific timeframe (Andrew, 2020). Hoa Phat Steel Group
employed three methodologies to gauge its production capacity: design capacity, and actual output. In
terms of the company's design capacity, it foresaw reaching a maximum production potential of 8
million tons of steel in 2021 under standard operating conditions (Dautuvakinhdoanh, 2020). However,
Hoa Phat's actual steel output in 2021 soared to 8.8 million tons for construction, surpassing the design
capacity by an impressive 800,000 tons. This outstanding accomplishment represents a considerable surge
in market demand by 35% compared to the corresponding period, underscoring Hoa Phat Steel Group's
substantial growth in meeting market demands (HoaPhat, 2023).

2.2.2. Demand forecasting

In Hoa Phat Steel Group's (HPG) demand forecasting analysis, two methods are utilized: qualitative
and quantitative approaches. For the qualitative method, HPG opted for the Panel approach.
Specifically, following the CEO's guidance, the company organized an in-house training session on
Climate Change Response conducted by the Group's Policy Committee, which was then shared within the
steel market at Hoa Phat. According to Mr. Nguyen Viet Thang, CEO of GreenCIC Company Limited:
"Hoa Phat has integrated an ERP system at the Hoa Phat Dung Quat steel complex to oversee raw
materials from inception to completion using precise measurable metrics, allowing real-time data
extraction whenever necessary." Moreover, Hoa Phat intends to implement various production
enhancements, such as substituting coal with hydrogen to decrease greenhouse gas emissions and adhere

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to national and international environmental regulations. This initiative holds significant importance for
HPG to fulfill environmental standards in the steel market, streamlining the company's import and export
operations. Decreasing greenhouse gas emissions aids in curbing global warming. Being a substantial
industrial manufacturing entity, Hoa Phat consistently updates itself with new information to proactively
adapt to evolving policy changes (Ongthephoatphat, 2023). When it comes to quantifying demand
forecasts, two main methodologies are employed: time series analysis and casual modeling. Particularly
within the context of Hoa Phat Steel Group (HPG), the emphasis is placed on employing the time series
analysis method. This particular approach leverages data derived from Hoa Phat's prior projects to
facilitate an in-depth examination of customer demand and the steel-related requisites for the company's
partners. A notable example is the Dung Quat project, considered one of HPG's most triumphant ventures,
which positioned the company as the foremost steel production facility in both Vietnam and Southeast
Asia. The successful evaluation of the inaugural phase of HPG's steel production endeavor over a
four-year period provided precise data beneficial for financial preparation, cost reduction
strategies, and further enhancements in production methods for the second phase of the Dung Quat
project. Furthermore, the utilization of data gathered from the initial phase of the Dung Quat
project allowed Hoa Phat to make considerable progress within the steel industry by accurately
anticipating market demands. As a result, HPG's Dung Quat phase 2 initiative is anticipated to
yield an additional production of 5 million tons of steel upon its conclusion (HoaPhat, 2021).

2.2.3. Capacity variation

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Figure 9: Structure of Hoa Phat steel sales volume 2021 (HoaPhat, 2021)

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Figure 10: Structure of Hoa Phat steel sales volume 2022 (HoaPhat, 2022)

When assessing capacity variation within Hoa Phat Steel Group (HPG), the model of capacity
variation encompasses the ability to forecast volatility in demand concerning the company's capacity.
Specifically, 2021 marked an impressive year for HPG, achieving record-breaking steel sales of 8.8
million tons, significantly surpassing the estimated output of 8 million tons aligned with customer
demand (exceeding by 800,000 tons) and exceeding the group's expectations. Examining the structure of
steel sales volume for HPG in 2021, it reveals consistent monthly steel consumption averaging above
600,000 tons throughout the year (HoaPhat, 2021) . Conversely, the analysis of HPG's steel sales volume
structure in 2022 indicates that while the production remained between 8 million to 8.8 million tons
annually, global steel demand decreased due to the armed conflict between Russia and Ukraine
coupled with the lingering effects of the Covid pandemic, impacting steel consumption worldwide
and augmenting domestic supply. Moreover, fluctuations in oil prices increased the cost of production
and machinery materials for HPG, leading to a decreased steel consumption of 7.2 million tons (a 7%
decrease compared to 2021). Thus, it is evident that demand and capacity remain critical factors for
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HPG to monitor closely to enhance production levels and meet customer demands both domestically
and internationally (HoaPhat, 2022).

To address the decline in productivity coupled with increased material costs such as coal and rising
oil, impacting Hoa Phat Group's steel production process, the company should focus on reducing
unnecessary expenses, such as excessive staffing at the factories, which adversely affect costs.
Moreover, adopting advanced modern machinery technologies to replace manual labor can help the
company curtail labor costs. Additionally, Hoa Phat Group should establish fixed pricing for corporations
requiring large quantities of goods, fostering long-term relationships with the company's primary
customers. In summary, capacity management significantly influences organizational effectiveness by
enabling HPG to achieve steel production levels consistent with its annual capacity, while also assessing
market demand to mitigate external factors, ensuring the company delivers more accurate and specific
production outputs (Diginet, 2022).

2.3. Supply chain management

2.3.1. Definition of supply chain management

Supply chain management (SCM) involves overseeing the movement of commodities and services to
and from a company, encompassing all stages in converting raw materials and parts into end products and
delivering them to the end consumer. Efficient SCM plays a pivotal role in optimizing a company's
operations by reducing inefficiencies, enhancing customer satisfaction, and securing a competitive edge in
the market (Jason, 2023).

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Types of supply chain relationships (Bradley, 2001)

In the case of the aforementioned supply network applied to the steel manufacturing process at Hoa
Phat, the company has implemented vertical integration strategies within its steel production
operations. This involves sourcing raw materials internationally and establishing numerous domestic
factories to produce high-quality steel. Nevertheless, when it comes to the transportation of large
quantities of steel, HPG engages with a third-party entity, the major shipping company Oldendorff.
Consequently, HPG still relies on several suppliers to aid in the transportation of its products to customers.
Thus, referring to the typology of supply chain relationships, HPG can assess its activities at a level that is
not insignificant, indicating that the company maintains a certain level of relationship with its partners.
Through the example of HPG, it underscores the significance of relationships in alignment with the
company's philosophy of "Harmony for Development," fostering operations and organizational objectives

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that align with HPG's ultimate goal of delivering high-quality steel products that cater to customer
requirements (HoaPhat, 2022).

2.3.2. Sourcing strategy and supply selection

2.3.3. Supply chain dynamics

2.4. Inventory management

2.4.1. Definition of inventory management

Inventory management pertains to overseeing the acquisition, storage, utilization, and commercialization
of a firm's inventory. It encompasses the supervision of raw materials, parts, completed goods, and the

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handling and storage of these items. Various inventory management approaches exist, each carrying its
own advantages and disadvantages, tailored to suit the specific requirements of a company (Adam, 2023)

2.4.2. The contribution of supply chain management

3. Impacts of technology on operations management

4. Recommendations

III. Conclusion

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