Luận Văn POOR INNOVATION ACTIVITIES AT SMT.doc

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UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Luong Thi My Lan
POOR INNOVATION ACTIVITIES
AT SMT (VN) CO., LTD
MASTER OF BUSINESS ADMINISTRATION
1

UNIVERSITY OF ECONOMICS HO CHI MINH CITY
International School of Business
------------------------------
Lương Thị Mỹ Lan
POOR INNOVATION ACTIVITIES
AT SMT (VN) CO., LTD
MASTER OF BUSINESS ADMINISTRATION
SUPERVISOR: Ph.D. Đoàn Anh Tuấn
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TABLE OF CONTENT
Executive information
Introduction
CHAPTER 1: COMPANY INTRODUCTION 3
1.1. Industry overview 3
1.2. Company overview 3
1.3. Organization chart 4
CHAPTER 2: PROBLEM IDENTIFICATION 5
2.1. Problem context 5
2.2. Company’s symptoms 5
2.3. Problem identification 6
2.3.1. Potential Problem and Validation 6
2.3.2. Central Problem 12
CHAPTER 3: CAUSES AND UPDATED CAUSE-EFFECT MAP 15
3.1. Causes and validation 16
3.2. Central Cause 19
CHAPTER 4: ALTERNATIVE SOLUTIONS 21
4.1. Solution 1: Finance leasing 21
4.2. Solution 2: Built up the training process and policy 24
CHAPTER 5: ACTION PLAN 26
Conclusion
SUPPORTING INFORMATION
REFERENCE
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Executive information
The SMT Company is leading in textile industry about label manufacturing high
quality base on the combination of high technology, customer‘s reliable and satisfaction,
good management and high demand of market. However, nowadays, in the completive
market, SMT seem lost the top position because objective and subjective factors.
Base on the symptoms is profit margin drop down, the main problem of this company
was revealed is the strategy company does not invest machine and technology. The reasons
are point out three majors: the power of financial equity and the well-trained workload, in
this situation, finance and human resources are the challenge for company. Finally, the
conception of director also related to run the business for company’s strategy. These
problems must solve quickly as it is indeed threatening the survival.
Company suggests two positive solutions for cause problem are finance leasing and
built up the training process and policy. These solutions are not only support about capital
resources through choose the bank with interesting attractive, professional process and more
benefits but also give company the plan in human resource training by heightening labor
awareness of training skill and knowledge, making training plan and plus more policy to
encourage the labor with reasonable cost. Based on these solutions, company conduct the
action plan with people in charge such as CEO, CFO, Factory Manager … in time to
improve the situation.
This thesis also collects the data from financial and internal reports, refers the literature
by author and in-depth interview all persons with high position in charged for more details
also interview other related employees to be executed fully understand the problem.
Additions, this thesis used formula is Gross profit margin = (Sale revenue – Cost of Goods
Sold) / Sale revenue to clarify the symptom also used some kind of charts to analysis and
compare the information in detail. Meaning, this thesis presented the important problem and
positive solutions also the action plan for main problem in positive.
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Introduction
Textile industry in general label industry in particular is the most important industry in
Vietnam which not only solve about unemployment but also impulse the development of
industry in Vietnam. This makes textile industry essential for the Vietnamese people.
However, nowadays, when Vietnam joined the WTO, textile industry in Vietnam is facing
more challenges such as the policies, culture and more strong competitors as Chine industry.
SMT Vietnam Company is a Foreign Direct Investment company that specialized in
providing cloth and shoes labels for textile industry. Due to the fashion grow rapidly in
Vietnam; at the begin 2003 SMT Company established which focuses on label producing by
chain complex machinery.
CHAPTER 1: COMPANY INTRODUCTION
1.1. Industry overview
Vietnam plays an increasingly large role in the World’s Textile & Garment Value
Chain - its garment products exported to over 180 countries and territories. The country
poised a bright future ahead of becoming the world’s textile production center, and major
garment makers are continuing to explore expansion and production opportunities in
Vietnam. There are around 6000 textile and garment manufacturing firms operating in
Vietnam, 84% of which privately owned, 15% FDI, and remaining 1% are state-owned. This
industry employs around 2.5 million people in the country on an average wage of $239 per
month. Garment manufacturing accounts for 70% of the total businesses in this sector in
Vietnam with CMT (Cut, Make, Trim) being the main method (85%) of export. The apparel
exports account for 11.5% ($24.61) of the country’s total exports (2016).
1.2. Company overview
SMT (VN) Co., Ltd is the Foreign Directly Investment in manufacture high quality
labels. In 2003, SMT was established by the main director is Thailand woman and have two
working location include one head office in TanBinh district and one factory in Cu Chi
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district. That location is useful for transport and production. The main products are woven
and printing labels to provide for the business of Footwear / Garment / Bags/ Accessories
items, etc., SMT Vietnam has good environment working also well-trained technicians with
much talented and skillful teamwork. We are now major supplying our woven labels to main
customers i.e. Nike/ Reebok/ Timberland/Adidas/ Pierre Cardin/ Puma in Vietnam market
and many brand name customers in Asia countries also enhance our customer’s brand name
in worldwide market. Moreover, over 15 year, SMT already has exported woven labels to
USA, EU, Hong Kong, Singapore, China, and Australia annually.
1.3. Organizational chart
The human resource in 2017: 200 people for office and factory
CEO
SALE DIRECTOR FINANCE
MANAGER
HR MANAGER FACTORY
DIRECTOR
Sale Customer
Service
Accountants Staffs Manager
Depart
Worker
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CHAPTER 2: PROBLEM IDENTIFICATION
2.1. Problem finding process
In order to identify the company’s problems, these following steps executed:
Reference the data of report’s company to understand the symptoms and positive problems.
Review the literature related to the symptoms and accounting data of industry.
Interview all persons who in charged for more detail:
 Mr. Tran Quoc Bao - Director of factory

 Mr. Nguyen Luong Bang – Director of sale and customer service department

 Ms. Ho Loc Ly – Finance manager

 Mr. Ky Ngoc Minh – HR manager

 Ms. Wanpen – CEO.

 And others employee to get the full information for clear understand the problem.
Moreovers, information from customers and competitors also be collected to futher
reference.
2.2. Company’s symptoms
Following the date of financial report from 2016 to 2017, the symptoms of this division had
revealed as following:
The formula of this ratio is Gross = (Sale Revenue – Cost of Goods Sold)
Profit Margin Sale Revenue
The trend’s gross profit margin had fall down 5% from 59% to 56% in 2016-2017.
Specially, the end of 2017, gross profit margin rapidly decreased between 60% and 26%
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from August to December and was high distance with 2016 in same period. More important,
this was in the seasonal textile.
The main reasons of decreasing gross profit margin are the revenue and cost of good sold:
For the operating revenue had reasonable decreased around 21% between 2016 and
2017, specially, the revenue in 2017 had trend rapidly went down from January (8,236
million) to December (6,866 million). Moreover, total SMT revenue 2017 was around 20%
lower than QN Competitor Company; most important, SMT’s revenue had high distance
over 35% with competitor in the fashion season (in supporting information)
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The reasons make revenue decreased by the fluctuated PO (Production Order). The PO
had same trend as revenue (in supporting information). In particular, the negative effecting
to PO and revenue is the loss of customer’s offers includes loyal and potential customers and
in 2017 had lowest customer’s offers. The total customer’s offers around were 2.744 and
2.121 for 2016 and 2017. More detail, in 2016, there were 1.950 PO (Production Order)
from loyal customers, 764 PO from potential customers and 30 PO form others. However, in
2017, there were 1.700 PO from loyal customers (down 13%), 401 PO from potentials
customers (down 48%), and 20 PO from others only. Furthermore, Mr. Bang, Manager of
sale and customer service department, also point that the product’s season and lack of
reputation were a part of reason effect to customers offers decreasing.
On the other hand, the cost goods of sold was calculated by three factors is material
cost, labor cost and manufacturing cost, but the labor cost was stable. The cost of goods sold
went down around 10% between 32.793 million and 29.341 million. This was due to the
raising material cost and manufactory cost. Follow the data accounting there were
dramatically increased in 56% for material cost and 4% for manufactory cost such as repair
and replaced equipment for machine. Moreover, finance manager stated that company could
not reuse waste material woven so policy control cost ineffective for material cost. This lead
to the result of gross profit margin went down in 2 years.
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Material Cost Manufacturing Cost
2016 8,437,533,736 11,680,566,811
2017 13,200,332,658 12,129,623,444
Increase rate 56% 4%
Table: The material and manufacturing cost SMT
Conclusion, the symptoms showed such as decrease gross profit margin, revenue and
the customer’s order. Moreover, we can see the revenue decreased around 20% but COGS
just fall down 10%, lower than revenue, so we can see the factor affect COGS as material
and manufacturing cost was flexible changed. Follow that symptoms above, this was the
serious signal to urge me discover and clarify what was the main problem.
2.3. Problem identification
2.3.1. Potential problem and validation
Although, SMT is one of the strong competitors, follow these company’s symptoms as
gross profit margin also base on the literature and in-depth interview people in charge in
business to claim that company had trend went down. The potential problem clarified by
review the theory and in-depth interview to confirm what is the central problem.
Follow the theory by two studies that claimed the low quality service and product
effect to customer satisfaction such as:
Kandampully (1) stated that quality of service, rather than price, has become the key to
a manufacturing’s ability to differentiate itself from its competitors and to gain customer
loyalty and Nielsen (2) claim that companies increasingly look to quality, satisfaction, and
loyalty as keys to achieving market leadership. Understanding what drives these critical
elements, how they linked and how they contribute to your company’s overall equity is
fundamental to success. By the way, as Customer service and sale admin shared that the
brand value and reputation of company affected by the appreciated customers also Bontis
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(3) found that customer satisfaction enhances reputation in the service environment. The
link between satisfaction and reputation has received minimal attention.
In order to confirm, the Customer service and sale admin agree to in 2017 company get
more complain from customers about not only the standard label lower the sample but also
the way customer service staff solve the situation too late or usually miss the client’s email.
Therefore, the customer’s satisfaction had trend went down and influent the amounts of
loyal and potential customers decreased in 2 years. More detail, in 2016, there were 1.950
PO from loyal customers, 764 PO from potential customers and 30 PO form others.
However, in 2017, there were 1.700 PO from loyal customers (down 13%), 401 PO from
potentials customers (down 48%), and 20 PO from others only.
Conclusion, the result showed that the low quality product and service influence
customers’ satisfy so company lack of reputation and lost loyal and potential customer in
loss that make customer’s offer was decreasing. It is definitely not a good business at all.
The other side, each label must follow standard that were signed by 2 parties base on
the sample about the size, color, and the amount of thread. Follow directory factory shared
the policy of company the percentage of product error make up 10% with the finishing
product, but in 2017, there are 4 wrong label for 10 finish label it mean it over 10%. That
reason make the material cost in 2017 increase nearly double than 2016 from 8.437 to
13.200 million. Clearly explanation the material cost is the expense buy material such as
ink, yarn, satin, woven glue… the main material for make the label. Another reason is the
suppliers increase their cost when they sell for SMT Company.
YARN QUOTATION IN 2016 - 2017 (VNĐ / KG)
Yarn Yarn VN903 Yarn
White yarn Black yarn Silver yarn
Silver yarn Silver yarn
VN903 (75/1) VN002 TX-1 TX-22
VNĐ / Kg
2016 111,150 122,550 110,200 77,900 77,900 393,300 301,500 304,200
2017 117,000 129,000 116,000 82,000 82,000 437,000 335,000 338,000
In addition, he also stated company hadn’t tend to innovate machine so that the
machine too obsolescence so we spent more time in manufactory process and usually break
down in 2017, beside the guarantee machine cost, the manufacture cost such as the repair
and replace tools of machine cost appear and had trend went up 4% between 2016 and 2017.
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In short word, the increasing in material and manufactory cost are the main reason
make cost of goods sold in 2017 total higher than 2016. If this situation continues, the
survival of SMT indeed is threatened.
Lack of training in workplace
In human resource development, induction training is a form of introduction for new
employees in order to enable them to do their work in a new profession or job role within an
organization. Training employees is the first step to help staff familiar with environment
working. All new employees need to train because it is important and affect to production
efficiency.
Follow JD Rogers, KE Clow, TJ Kash (4) stated that such responses on the part of
employees would still tend to increase quality of customer service evaluations and customer
satisfaction. Thus, the problem may be both hiring the wrong individual as a customer
contact person and the lack of training on how to communicate...; and A Payne
(5) showed that satisfaction with customer delight by offering service quality that exceeds
expectations. When a quality breakdown does occur and customers defect, it is important to
establish exactly why. A long wait at the post office may be due to inadequate staffing, lack
of training. Moreover, SE Fawcett, LM Ellram, JA Ogden (6) studied and presented that
sources of dissatisfaction include a lack of managerial commitment, poor training of service
personnel, poor measurement, and inflexible policies. As a manager, some of the strategies
you would consider/study to improve customer satisfaction.
In addition, the director factory shared the few of staff lack of training such as part-
time staff so they had no skill and work ineffective; hence, they make more mistake in
working that make there were more and more product errors. Surprisingly, the director
factory did not impress this situation because this just the small factor affect in manufactory.
In summary, the lack of training in workplace influenced to low label’s quality and
skill of worker in manufacturing process that make number of wrong label increased. That
chain was influence gross profit margin. However, as director factory confirm that was just
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the small problem so lack of training in workplace did not the important problem effect to
Business Company.
Management method ineffective
Management system one of the basic factors contributes to speed up the improvement
quality of products and service. Managers must know how to encourage employees
understand that quality assurance and improvement is not part of any department, that it
must be the overall responsibility of the whole enterprise. The quality of the management
activities is a reflection of the quality of the company's operations. Therefore, the
management system inefficient is lead to low quality service and quality product.
As Hillary (16) point out, numerous organizational improvements and efficiencies
achieve in the environment management system (EMS) from the adoption of an EMS and
are not solely relate to the EMS, i.e. spin-off management benefits arise from the
implementation of an EMS. For example, quality systems improved as product and service.
To confirm the CEO shared that quality service and product is so important and first
factor affect to the business. We should consider about management system, we must
control and encourage staff attitude, the way they working such as follow the PO, replies
customer email and takes care customers the accurate reports. By the way, we must control
the quality outcome such as the synchronization of labels.
However, SMT Company has strong power management system; they creased the
professional environment and human resources had each policy for each department, the
evidence to prove is the turnover rate of human resource as HR manager shared, is the
minority so management method ineffective is not the main problem in SMT Company.
Poor Innovation Activities
Innovate machine and technology is the active action to replace current machine,
technology by modern ones in order to enhance the productive business. Nowadays, the role
of technological innovation is the top strategy to help company reduces expenses, improves
quality product and reputation. If company’s innovation behavior was poor, company will
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get some disadvantage about manufacturing process and expand market, create new
products.
In the study, there were some people pointed the huge affection of strategy lack of
technological innovation about quality product and customer’s satisfaction. For example,
Joseph Schumpeter (7) argued that economic growth requires innovation technology -the
generation of higher quality products at lower unit costs than had previously been
obtainable. Shan-Chun Lee Sunita Barker and Jay Kandampully (8) claim technology is
found to have affected the ability of company to support employees, enhance the quality of
product, improve efficiencies, gain competitive advantage, maintain relationships with
customers, and increase profitability and technology provides an organization with a better
way of doing things - thus benefiting the firm, its employees, and its customers. By the way,
the innovate machine, technology still relate with the cost through G Mert, S Waltemode (9)
declared that process innovate machine and technology can also support low-cost producer
strategies. Companies that eliminate, for example, costly aspects of their product delivery
processes can pass the savings on to custo mers. Moreover, Textile Industry Association
pointed that our country had over 3.700 textile companies but there were 50% company
were using old-date machine, technology over 15-20 years longer than Thailand and China
country. That makes increase waste material and population. In other word, company should
innovate machine instead handicraft in order to enhance correctly product.
On the other hand, Omar Licandro (15) found that side from expansionary behavior,
the innovative behavior of firms is the central issue. Non-innovative firms expected to face a
small trend in productivity, at least compared to those firms declaring to be frequently
engaged in innovative activities and replacement activities in non-innovative firms may
guide mainly by physical depreciation.
In order to confirm, the directory factory claimed that this current main chain machines
were too old, it spent more time to produce label. With high demand orders, we had to make
in hand because current power-loom machine could not make or make wrong label so that
did not meet up the standard labels. By the way, the main chain machines was bought over
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10 years, it was end up depreciation so it usually broke down and company must paid
expense to repair. However, he did not get any decision replace or innovated machine,
technology from board director.
The initial effect map of SMT Company
MANAGEMENT
SYSTEM
INEFFECTIVE
POOR
INNOVATION
ACTIVITIES
LACK OF
TRAINING IN
WORKPLACE
LOW
QUALITATY
OF SERVICE
LOW
QUALITATY
OF PRODUCT
MORE
PRODUCT
ERROR
SKILL OF
WORKERS
LOW
CUSTOMERS ‘S
SATISFACTION
INCREASE
BUY
MATERIAL
INCREASE
SUPPLIERS
COST
INCURRED
REPAIR THE
MACHINE COST
LACK OF
REPUTATION
AND BRAND
VALUE
LOST LOYAL
AND
POTENTIAL
CUSTOMERS
INCREASE THE
MATERIAL COST
INCREASE THE
MANUFACTURY
COST
DECREASE
CUSTOMERS’S
OFFER
INCREASE COST
OF GOOD SOLD
DECREASE
PROFIT
MARGIN
2.3.2. Central Problem
The last section showed that SMT is poor innovation activates in machine and
technology, now the next section will collect more data from the second interview with Ms.
Wanpen, CEO at SMT in order to justify the existence of the central problem.
Ms. Wanpen emphasized that has not really paid much attention to innovate machine and
technology because any reasons. She also claims the status of factory machine:
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“In main chain machine, we have 26 power-loom machine included buy 20 pcs in 2003 with
degraded 75%, productivity only 45% and 6 pcs in 2010 with degraded 15%, productivity
only 85%.
Before, machine was imported from different country such as 45% Thailand, 30% China,
20% other Asia country so the homogeneity is weak. Because less homogeneity and degrade
machine, company face with difficult in buying replace accessories, low productivity, waste
the material, production norm is old and improper but did not change.”
Moreover, Mr. Bao – factory manager stated that:
“Absolutely, there are 70% quality of product depend on machine manufacture. When
company concern innovate machine, the quality of label will be improved also reduce the
product error, spend working time and more productive. Moreover, company can expand
and meet up high standard label. However, the strategy innovate machine still consider and
did not execute, develop.”
Same as conception with Mr. Bao, she also pointed out the negative affection as unsatisfied
customers about qualitied of product and sample and over the control cost in manufacturing:
“Our kind of business is manufacturing industry, so we depend on too much about running
machine and technology. The innovative machine and technology huge effect to our business
such as:
We will increase the productivity include quality and quantity. With the modern main chain
machine and technology, company will save the material cost for each unit product and less
the material wastes. Moreover, the manual workers decrease and impact to expenses about
worker’s salary will decrease. That help company can get the lower cost of goods sold so
company can easy sell with the reasonable price, access the more markets. Therefore,
revenue and profit will increase.
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Beside the saving the cost, the quantity and quality of product will be went up, that can meet
up the hard requirement of market about sample, branch. The status low price but high
quality is so meaningful and strong power in current competition.”
Conclusion, company wants to get the profit target and enhance the reputation,
company have to improve the productivity, quality product and reasonable price. That is
similar with duty; company needs change and innovating the machine and technology.
After the meeting and in-depth interview with the CEO, CFO, Chief Accountant,
Director factory of SMT company and base on theory also data collected, the central
problem is company’s innovation behavior was poor. In the strategy business, they had no
plan to concern and replace or upgrade the machine, technology to meet up demand of
customers.
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CHAPTER 3: CAUSES AND UPDATED CAUSE-EFFECT MAP
From that main problem, there are three cause problems and the concise cause-effect map of
this main problem showed below:
LACK OF
CAPITAL
RESOURCE
LACK OF
SKILLED
WORKERS
THE POWER
OF DIRECTOR
POOR
INNOVATION
BEHAVIOUR
LOW
QUALITATY OF
PRODUCT
MORE
PRODUCT
ERROR
INCURRED
REPAIR THE
MACHINE COST
DECREASE
CUSTOMERS
’S OFFER
INCREASE
COST OF
GOOD SOLD
DECREASE
PROFIT
MARGIN
3.1. Potential causes and validation
Lack of the capital resources
Nowadays, in the competitive industry business, the innovate machinery and
technology was important requirement. That is the one of challenge for not only small
companies but also SMT Company that lacks of the owner’s equity.
Follow Maryann (11) stated that in the modern economy, locational advantage in the
capacity to innovate technology is ever more dependent on the agglomeration of specialized
skills, knowledge, institutions, and finance resources that make up an underlying
technological infrastructure. Aghion (12) claimed that while other sectors typically quote
high innovation costs and access to finance as the main barriers to innovation and another
classical barrier to innovation is access to finance. Financial constraints will be even more
limiting for green innovations, especially the more breakthrough type of green innovation,
16

because such innovations carry a high technical risk/uncertainty but also important for green
innovation is the higher commercial risks arising from uncertain market conditions. The
combination of technological and market uncertainties will be particularly important for
early-stage green technologies. As there are often introduced by small-scale, radical
innovators lacking collateral and reputation, such young, radical green innovators may be
particularly held back by financial constraints. Veugelers (13) also showed that Subsidies
are particularly important in the early phases of development of new technologies, for
addressing the installed-base disadvantage of new technologies and the financing barriers
faced by new innovators.
To clarify, the director factory pointed out there were 20 in 26 power-looms machine is
too old, slow working and usually broken totally, we need to buy the new ones instead of
upgrade or replace the tools. By the way, follow the detail table below from sharing of chief
accountant:
No. Name
Quantity Year start Total cost
Percentage
(Set) using (VNĐ)
1 The power - loom 26 2003 & 2010 33.566.590.385 60%
2 The cutting machine 18 2003 & 2010 7.066.482.476 13%
3 The others 15.322.284.961 27%
Total 55.955.357.828 100%
It is easy to see that the old price of power-loom machine around 1.29 million VNĐ
per set but the price for ones around 70.000 USD/set (over 1.61 million VNĐ) in 2017.
Therefore, with 20 sets was need to replace, company need over 32 billion. However, the
owner’s equity just around 38 billion (include the current fix assets). In this case, as chief
accountant claimed that seriously company lacked of owner’s equity so company should
17

supported by the bank loan. Furthermore, with the small company like SMT, company hard
to access the bank loan because small-scale production also limited mortgages.
In summary, when company wants to execute innovate machine and technology, they
will faced the finance problem. Therefore, lack of the capital resources is one of the cause
problems of SMT Company.
Lack of skilled workers
The effective human resource is huge and no limited like other resources. The human
resource is the main factor for the effective business and its support the develop company
also that is the strong point for company decide on invest new strategy. If company had
well-trained employees resource combine with good effective management, company can
save some expenses such as material cost, management and training cost, enhance labor
productivity.
Follow Erik Brynjolfsson Director (14) claimed that we want to focus on
recommendations in two areas: improving the rate and quality of organizational innovation,
and increasing human capital— ensuring that people have the skills they need to participate
in today’s economy, and tomorrow. Making progress in these two areas will be the best way
to allow human workers and institutions to race with machines, not against them and
Training to sustain ongoing use and stimulate future expansion of technologies, training is
paramount.
Moreover, follow the sharing of human resource manager, in 2017 workload of SMT
Company had near 200 employees include staff in office and factory.
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The pie chart presented the percentage number of employees in office and factory.
We can see there are 12% (25 people) work in office for some department as sales, customer
service and accounting who from 23 – 55 years old and graduated college and university.
With 88% (175 people) in factory had 5 managers and 167 unskilled worker and only 3
well-trained workers who is foreigner and can use the complex set of machine, but they will
retire in 2 years. Therefore, he emphasized that workload in company is lack of the well-
trained employees to operate the chain main machine. Those leads to the problem why
strategy do not focus on invest the machine in 2017.
This is the true problem of company, manager of factory also shared that the salary
policy of company not attractive employees foreigner to work in Vietnam for long time so
company organize some training program but almost current employees was be fail and few
staff pass, they transfer to other company have more attractive environment working.
Moreover, match with sharing of chief accountant that because SMT in crisis period, in 2017
revenue rapidly decreased in 20% than 2016, so company cut-off the workload in order to
reduce the labor cost so with the salary offer from foreigner, company could not approve.
Conclusion, although SMT Company had strong human resource as their employees
had knowledge also experience meet up requirement, they lack of the well-train staffs to
control the main chain machines and technology. In short, the lack of well-trained workforce
is one of the most cause problems in business.
The power of director
The CEO who highest position and has right to decide any strategy in SMT Company
is foreigner comes from Thailand country so the different culture between 2 countries is the
limitation about conception in business. That lead to the problem as sale
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manager stated that all working activity in company depend on CEO too much so we are
impassive to develop innovate technology strategy.
This is one of the most problem importance and affect to the company business
because this problem was depended on personal attitude so I cannot control and over my
role. Therefore, it seem that there no solution for this cause problem.
3.2. Central causes
Based on above discussion and validation, among three factors, it can obviously
recognized that lack of the capital resources and lack of skilled workforce are proved to the
key reason of poor innovation activities because of its impact on decreasing profit margin in
SMT business performance. Through accounting and sale department’s records collected by
confirmation from insiders of factory and office, we can get more deep insights of their view
of points and perspective on those issues together with group discussion and literature
review.
The importance of financial resources and skilled labor in the innovation activities:
- The use of financial capital also seemed as an input in the production function. The capital
resource have important role such as follow Gertler (17) financial resource is the condition
to maintain manufacture, upgraded technology, expand business, improve the quality
product … so first, financial resources is the main tool for company conduct the business
strategy. Second, capital business for the relationship of business support between business
in the problem. Finally, capital business for the selection of the business options in the
parsing like the field market is: determine the output what? for the best performance.
- The workload also the main factor to contribute the company development especial is
skilled- workers. Follow Joe Hannsen (17) skilled worker is any worker who has special
skill, training, knowledge, and (usually acquired) ability in their work. Skilled labor is key
for innovation in firms: skilled labor can contribute to innovation and growth by generating
new knowledge, developing incremental innovations, supporting firms in the identification
of business opportunities, helping companies adapt to changing environments, generating
20

spillovers (transfer of knowledge to co-workers) within the organization and adding to
social capital.
As Ms. Wanpen – CEO SMT admitted and emphasized that
“We lack of some important factors such as finance, workload, the effective project, … to
conduct the innovation plan…” and “we need loan the banks but with the small company
like SMT, we hard to access the good loan bucket because small-scale production and
limited mortgages.
Other hands, company lack of well-trained staff. In participant, the human resource of SMT
near 200 employees includes office and factory. There are 3 well-trained Thailand staffs
only that can use the complex set of machine.”
Summaries, capital resource and skilled- workload is two important factors affect the
business company, company should find the positive potential solution in order to innovate
activates to upgrade machine and technology.
21

CHAPTER 4: ALTERNATIVE SOLUTIONS
Through these cause problems from poor innovation activities at company, SMT
gave some potential direction for all departments to propose the best solution for action
plan.
Base on the theory and interview the top people in charge, there are potential
solutions that SMT Company should refers and conducts the plan to enhance the capital
resource and improve the workload’ skill.
4.1. Solution 1: The Finance Leasing
The financial barrier is always main problem with companies. Normally, in order to
raise capital to upgrade machines and technology, they have trend to mobilize the funds of
the bank or the credit agency. Therefore, toward the small company and hard to access to
finance like SMT company, there are 2 potential solutions:
- The business loan: is the popular solution when company face with the limit
capital resource. Follow Gangopadhyay (18) explained that a business loan is a loan
specifically intended for business purposes. As with all loans, it involves the creation of a
debt, which will repay with added interest. There are different types of business loans,
including bank loans, mezzanine financing, asset-based financing, invoice financing,
microloans, business cash advances and cash flow loans.
- The finance leasing: follow Vancil's groundbreaking article on lease analysis
(18) claimed, “The financial lease is defined as a contract under which the lessee agrees to
make a series of payment to the lessor which in total, exceed the purchase price of the asset
acquired. Typically, payments under a financial lease spread over a period equal to the
major portion of the useful life of the asset acquired. During this initial term of the lease, the
contract is non-cancelable by either party; that is, the lessee is irrevocably committed to
continue leasing the asset”.
22

The table below is list of the basic different between the bank loan and the finance
leasing:
Title The business loan The finance leasing
Duration Short and long term Medium and long term
Lands, machines,
Machine, factory, transport,
Kind of project equipment, transports,
equipment… no land
factory … (for long term)
Description
 The mortgage asset - Need - Do not need
 The appraise time - In 1 month - 5-7 days
Follow the table we can see, two solutions still meet up the requirement to raise the capital
for company but as CEO shared that:
“First, company lacks of owner’s equity to cover. You easy to see total chain
machine cost: 55 billion, the old cost per power-loom machine around 1.29 million
but for the new one over 1.61 million so for 20 sets we need over 32 billion.
However, the owners’ equity is around 38 billion. Therefore, we need loan the banks
but with the small company like SMT, we hard to access the good loan bucket
because small-scale production and limited mortgages…”
In addition, finance leasing bright more advantage than buying like Schallheim,
Johnson, Lease, and McConnell (19) claim that the fact that these firms chose to lease assets
rather than to borrow to buy them indicates that other benefits, such as capital market access
and lower bankruptcy costs, play an important role in the leasing decision. Additional,
Krishnan, V. S., & Moyer, R. C. (20) still said that rapidly growing firms also expected to
make greater use of lease financing, when the choice is between lease financing and debt
financing. Myers (21) present that lease financing may be preferred because of the lower
required down payment (equity commitment), relative to debt financing, at the inception of
23

the transaction. The "down payment" with leasing normally is equal to only one-month lease
payment, an amount that is less than the typical loan down payment. Hence, lease financing
often may be the only financing alternative to equity for rapidly growing firms.
Accordingly, some benefits and costs when conduct the finance leasing process is
described as below:
Benefits:
Follow the Viettinbank supervisor suggest and authors such as Maire Loughran (23), Bhalla
VK (24) and Sherman AJ (25) list out of some finance leasing’ s benefits:

Balanced Cash Outflow: The biggest advantage of leasing is that cash outflow or
payments related to leasing spread out over several years, hence saving the burden
of one-time significant cash payment. This helps a business to maintain a steady
cash-flow profile.



Quality Assets: While leasing an asset, the ownership of the asset still lies with the
lessor whereas the lessee just pays the rental expense. Given this agreement, it
becomes plausible for a business to invest in good quality assets that might look
unaffordable or expensive otherwise.



Better Usage of Capital: Given that a company chooses to lease over investing in
an asset by purchasing, it releases capital for the business to fund its other capital
needs or to save money for a better capital investment decision.



Tax Benefit Leasing: Expense or lease payments are consider as operating expenses,
and hence, of interest, are tax deductible.



Better Planning Lease: Expenses usually remain constant for over the asset’s life or
lease tenor or grow in line with inflation. This helps in planning expense or cash
outflow when undertaking a budgeting exercise.

24


No Risk of Obsolescence: For businesses operating in the sector, where there is a
high risk of technology becoming obsolete, leasing yields great returns and saves the
business from the risk of investing in a technology that might soon become outdated.
For example, it is ideal for the technology business.



Termination Rights: At the end of the leasing period, the lessee holds the right
to buy the property and terminate the leasing contract, thus providing flexibility to
business.

Costs:
Company chooses Viettinbank to conduct the finance leasing because they have reasonable
interest with 4.5% and lease in 20 years so conduct the process conveniently.
Description Calculation Total (USD)
Total amount expense (20 sets
20 x 70.000 1.400.000
machine)
The bank accepts 80% on total expense 80% x 1.400.000 1.120.000
The company deposits 20% for leasing
20% x 1.120.000 224.000
amount
The left expense company have to pay
1.120.000 – 224.000 896.000
bank
The interest fee for each year
Base on the formula in
86.101
appendix
Company pay principal each year 896.000 / 20 44.800
The payment leasing each year for 20
86.101 + 44.800 130.901
year (if interest is constant)
Conclusion, innovating 20 set the power-loom to enhance running business, SMT
should apply the finance leasing because it situation for invest chain machines, technology
which import from foreign country with huge capital. Besides, there are more banks have
finance leasing service with convenience process such as do not mortgage assets, long time
leasing, low interest and sponsor over 80% assets.

25

4.2. Solution 2: Built up the training process and policy
Training the high quality human resources in SMT Company is the main mission to
meet requirement of socio-economic development. Finding solutions to advance the quality
of vocational training is especially important. It’s so help the organizations have foundation
to develop worker training to meet requirement of demanding labor market.
- Applying the attractive foreign policy about salary and allowance: The labor that
has more skill and experience attracted by high company’ policy such as welfare,
environment working and salary is most important. So that, if company want to employ and
keep the skilled workers, they should change and focus on company’ policy proper with
current situation. Nevertheless, the weakness SMT is not enough funds to build up the salary
higher and more attractive foreigner- workers so they only can use current labors in VN
country.
- Built up the training process and policy:

Heighten the awareness about training skills and knowledge. Change the

labor’s conception let them know the skill and knowledge are important. Through company
propaganda or held the meeting, talk show about with the empirical people who has been
working in famous industry and got more information and experience annually, it’s affect
both their interest and the company’s requirement to make sure that the income will increase
and built up the training process and policy for country.

SMT should improve the training process for worker. Specifically, company
built up the training process and policy such as originate courses about guiding the working


- skills for workers, held the competition for employees have chance to learn experience and
evaluate themselves also company can recognize the potential workers, by the way,
company should nominate the talent workers to study aboard to improve their skill and
contribute for company. That helps potential workers have chance familiar with main chain
machine and technology. In the future, they will become the well-trained labor and would be
replaced the current skilled labor also they will become the trainer for the new employees.
26

Some authors pointed out the effective of this solution such as Dolton & O’Neill (22)
claims: “Often job-search training is an adaptation of some program or a compiled mixture
of many programs or has no specific theoretical foundation. In previous studies, job-search
training has generally shown positive effects on reemployment, quality of reemployment,
and mental health.”
Benefits:
Base on Kahn BK, Strong DM, Wang RY (26) and Salanova M, Agut S, Peiró JM (27)
stated about the advantage when conduct the training process and policy:

The motivation and inspiration between employee and supervisor that push the
employee’s responsibility at working decrease the risk and reach high business
preferment.



Encouraging loyal employees effectively work with positive attitude to provide high
quality of services.


Keeping the workload in constant and reinforce the loyal skilled employees.



Improving the quality of product also services.



Creating the positive working environment with effective training and management

Costs: The overall cost of them including:

The cost of setting up group meeting monthly: 5.000.000 VND



The cost of establishing the skill- working competition: 50.000.000 VND



The cost of organizing the training courses: 50.000.000 VND

Conclusion, the solution focus on enhance labor’s conception and improve training
process is the advantage step from the beginning about machine and technology innovation
27

CHAPTER 5: ACTION PLAN
Base on the interview and theory informs, although the time and cost is limited, SMT still
suggest two solutions to consider long term benefit carefully. SMT take some purpose
actions:
- Conducting the finance leasing to rise up the capital resource in order to invest and
innovates technology and machine in process conveniently.
- Completing the training process to enhance the skill of worker and awareness of
training skill and knowledge throng step by step activities of cooperate between each
department.
The actions planning for 2 solutions could be scheduled in beginning 2019 as following:
CEO: Chief executive operate
CFO: Chief finance operate
FM: Factory manager
28

5.1. The action plan for finance leasing
Title Objective Description People in charge
Prepare document to apply the finance leasing process CEO, CFO
The banks estimate and make the decision The bank
Company conduct the finance
The bank make the process and buy the machine follow company requirement The bank
leasing process with Vietinbank in
Finance
order to raise the capital resource Company and the bank and supplier sign the contract together CEO , CFO, FM
leasing
for technology and machine
Company deposit the finance leasing CEO , CFO
innovation
Company import and check machine and operate CEO , CFO, FM
Company conduct operate machine and pay interest fee for each years CEO , CFO, FM

5.2. The action plan for built up the training process and policy
Objective Description
People in
Title charge

Company propaganda or held the
meeting, talk show about with the
Heightening labor awareness of
empirical people who has been
working in famous industry.
training skill and knowledge 
Measuring the efficiency of this
program
HR, CEO
 Propose adjustment if necessary.

Originate courses about guiding the
working - skills for workers.
Built up  Gathering and analyzing the result
the about the effective working of
training employees.
process

Appraising and evaluating operation
and
performance from the result.
policy

Giving reward and punishing for
each case.
Improving the training process and
HR, CEO,
 Establish the skill- working FM
policy
competition to look for the potential
worker.

Nominating the talent workers to
study aboard to improve their skill
and contribute for company.

End of each year, reviewing the
current training plan and policy to
check the working efficiency.
1

Improving
the training
process
and policy
1

The measurement through talking action
With the current main problem and base on the experience, Board of the management
include CEO, human resource manager, factory manager, sale director and chief accountant
discuss about the positive effects of implementing action plan of two solutions to improve
the current situation.
- Company applies the innovation plan with finance leasing mordent machine under cost
controlling. Strongly, chief accountant stated that we calculate if the sale volume increase
10% for each year, the gross profit can be positive when we are paying the leasing interest
each year. By the way, in his predict, with the new technology and machine, some expense
will be decrease such as material and repair cost.
- Company will have the skilled-workload through the built up training plan. HR manager
claim that the turnover rate and the requirement cost will be went down. Moreover,
company gets higher customers satisfaction feedback.
Summaries, from the insights of manufacturing industry and related theory, it is present
clearly that the proposes action are effective and get positive results also change the current
situation better and company should be implement step by step now as soon as
2

CONCLUSION
In the manufacturing industry, the innovation activities is playing a vital role for label
industry to achieve high quality of product as well as lower cost of production and further
getting more profits. This thesis attempts to identify and validate the potential causes of
decrease the gross profit margin result through some analysis of the main problem at SMT
Company and suggest potential solutions effectively solve it for better improvement. In
general, the most important contribution of this study is that some potential solutions for
each cause of poor innovation activities in machine, technology and related academic
sources are proposed and discussed to choose the best one promptly take actions.
In this thesis, the action plan for finance leasing to raise the capital and built up the training
process and policy in order to retain the skilled workload. After examining the effectiveness
of these solutions and implementing appropriate improvements of this action plan in
company, this current issue can be solved and long-term profitability. According to the plan,
company should consider the consistence and continuous implement, evaluate and enhance
quality product and satisfaction customer and remarkable profitability.
1

SUPPORTING INFORMATION
This thesis used two methodologies including Quantitative and Qualitative for research.
Quantitative research mentions about the numeric data, amounts, and statistical information
by various questionnaires or survey. Qualitative research concentrates about expert’s
conception and in-depth interview. It trend used qualitative than quantitative although there
are some statistical proof were analyzed.
In order to collect the relevant data, there is a need to use an appropriate method in
collecting the data. It takes more times, efforts and resources to collect the primary data
comparing to the secondary one. The advantage of two methods is possibility to use the
strengths of each method, to obtain different kinds of information and to achieve a higher
degree pf validity and reliability.
In this thesis, dates collected by literature studies and interview. The main method used for
collecting qualitative data is in-depth interviews. The research conducts two times of in-
depth interview for relate respondents of internal company.
INTERVIEW GUIDE
INTRODUCTION
My name is Lan
I want to thank you for spending time in my interviewing today.
Firstly, I would like to talk about present situation of our company. Follow the financial data
of accounting department send, you may know that the profit margin also the revenue and
customer’s offer had negative trend, it was opposite with the target for 2017 was set up by
sale department. Moreover, there was some problem affect with cost of goods sold.
Therefore, I would like to discuss some question with you about this situation.
The interview should take about 10-15 minutes. I will record the conversation because I do
not want to miss any your information. By the way, I will take some note during the session
because I cannot possibly write fast enough to get it all. Thanks for your supporting.
General question
2

1. Personal information. Your job/responsibility/position within the company?
2. How long have you been working in our company?
Sale Department
1. In your opinion, which reason leads to customer’s offer decrease? And what is the main
reason and why?
2. How often do customers complain? Why do they unsatisfy and what most reason
customers usually complain?
3. Why the customer service staffs work ineffective? Do they have any difficulty when
doing work?
Accounting Department
1. In 2017, why the cost of goods sold has trend go up and over 10% higher than 2016? In
your options, which factors most important?
2. What do you think about the material and manufactory cost? Do you want any
improvement to under control these cost?
Factory
1. Recently, factory use more material also require to repair and replace tools machine when
producing, what is the reason for this problem?
2. Do you think that lack of training and motivation or not?
3. Do you think that if company replaces the modern machine, the production efficiency will
be positive?
4. Tell me the reason why do the quality of label do not smooth and uniforms?
For CEO
3

1. Why companies still have strategy use current machine and technology? Why company
don not innovation?
2. Follow the report of sale depart, we negative customer’s satisfaction because quality
service and product. What do you think about this?
THE ANSWER LIST
Personal Question and Answer
Please tell me your name and your position?
Ms. Anh - Trần Ngọc Anh
- Customer service and sale admin
Mr. Bang - Nguyen Luong Bang
- Director of sale and customer service department
Mr. Bao - Tran Quoc Bao
- Director of factory
Ms. Ly - Hồ Lộc Ly
- Finance manager
Mr. Minh - Kỳ Ngọc Minh
- HR manager
Ms. Wapen - Wanpen Thusi
- Chief Execitive Operation
How long have you been working in our company?
Ms. Anh - 2 years
Mr. Bang - 9 years
Mr. Bao - 15 years
Ms. Ly - 4 years
Ms. Wapen -15 years
4

Mr. Minh - 6 years
In your opinion, which reason leads to customer’s offer decrease? In
addition, what is the main reason and why?
Ms. Anh In competitive market, there are many reason effect PO decrease but the
main reason in company are 2 factors:
- Company lack of the reputation also brand value so salesperson hard to
get PO from new customers.
- Company lost PO from loyal and potential customers cannot develop.
Eventually, the season is little effect to PO trend
How often do customers complain? Why do they unsatisfy and what
most reason customers usually complain?
Ms. Anh Company usually receives the negative feedback about quality service
and quality product:
- About service: they complain customer service staff always sent
wrong quotation, delivery date late, reply late customer’s email
and in urgent situation the attitude of staff is passive.
- About product: the quality of product is uniform, first package is
good but the after ones are not good, labels have wrong mistake
about the yarn…. Moreover, the product labels are lower standard
than sample label.
That effect to appreciate of customer to company, so far, it affect to the
company reputation.
Why the customer service staffs work ineffective? Do they have any
difficulty when doing work?
Mr. Bang In 2017, there are only 2 customers service staff and they is new
employees so they have no experience and the old staff retire immediately
so lack of training about skill in solve the problem for each situation.
Nevertheless, the problem about lack of training is just the small factor
effect with manufacturing.
In 2017, why the cost of goods sold has trend go up and over 10%
higher than 2016? In your options, which factors most important?
Ms. Ly SMT always under the control cost to remand the profit also business, but
in 2017, SMT faces with 2 factors make COGS relatively raise are
5

material cost and general manufacture cost. These is 2 trouble company is
analyzing and controlling.
What do you think about the material and manufactory cost? Do you
want any improvement to under control these cost?
Ms. Ly The material cost is the expense buy material such as ink, yarn, satin,
wovedan1glue… the main material for make the label.
The manufacturing cost is the expense for factory such as repair machine,
tools, other…
In 2017, factory requires more material to produce that make material
cost increase 56% and 4% for manufacture expense for repair machine.
By the way, material cost rise by the supplier increase cost follow the
contract annually.
Tell me the reason why do the quality of label do not smooth and
uniform?
Mr. Bao We get the information of sale depart that customers complain about
quality of product. I know that problem but recently our current machine
is too old, we bought over 10 years but company has no plan to innovate.
The total chain of machine include 26 power-looms and 18 cutting
machine but there are 20 chain power-looms are too old it work slowly
and unwell. Therefore, that is the main problem effect to the quality of
product.
Recently, factory use more material also require to repair and
replace tools machine when producing, what is the reason for this
problem?
Mr. Bao Like I mention before, almost the main chain machine of company is old-
fashion, can meet up the high demand. For example: follow the policy,
there is 10% error in total, but 2017, if we make 10 labels, have 4 labels
wrong so we must require more material.
The reason is company don’t have any strategy innovate machine and
technology, the current machine work slowly and unwell so spent more
time and easy error such as wrong word, the yarn and woven unsmooth,
cut wrong size…), by the way, the skill of worker when they choose color
to make label incorrect so these labels un similar with sample.
Moreover, we have to repair and always buy tools to replace for machine.
6

Do you think that employee lack of training and motivation or not
Mr. Bao The environment in factory still good, the turnover rate so low, the
workload is ok, almost worker here work over 2 years so the unsatisfied
of worker is minority.
However, almost mistake team is the new staffs; they did not trained and
do not familiar with new policy of new label.
Do you think that if company innovate the modern machine, the
production efficiency will be positive?
Mr. Bao Absolutely, there are 70% quality of product depend on machine
Mr. Bang
manufacture. When company concern innovate machine, the quality of
label will improved also reduce the product error, spend working time and
more productive. Moreover, company can expand and meet up high
standard label. However, the strategy innovate machine still consider and
did not execute, develop.
Why companies still have strategy use current machine and
technology? Why company don not innovation?
Ms. Wapen First, company lacks of owner’s equity to cover. You easy to see total
Ms. Ly
chain machine cost: 55 billion, the old cost per power-loom machine
around 1.29 million but for the new one over 1.61 million so for 20 sets
we need over 32 billion. However, owner’s equity is around 38 billion.
Therefore, we need loan the banks but with the small company like SMT,
we hard to access the good loan bucket because small-scale production
and limited mortgages.
Another hand, company lacks of well-trained staff. In participant, the
human resource of SMT near 200 employees includes office and factory.
3 well-trained Thailand staffs only can use the complex set of machine.
In short word, strategy company is un innovate machine because we lack
of finance and well-trained resource.
Can you share the human resource situation of company in 2017?
Mr. Minh There are 200 staff include 25 people in office and 175 people in factory
with 5 managers and 167 unskilled worker and 3 well-train Thailand staff
but they are from 47-58 years old.
Company often organize training program used complex set chain
machine for top hard unskilled worker but almost they fail or few staff
pass but they look for new job after.
7

About foreign staff, they do not attractive with salary policy in working
for long time.
In 2017, business company go down, company cut off the workload in
order to reduce labor cost so with the salary offer from foreigner company
is too high demand with company. This is the hard trouble of SMT
company and we is looking for the solution.
Follow the report of sale depart, we negative customer’s satisfaction
because quality service and product. What do you think about this?
Ms. Wapen Quality service and product is so important and first factor affect to the
business. We should consider about management system, we must control
and encourage staff attitude, the way they working such as follow the PO,
reply customer email and takes care customers the accurate reports. By
the way, we must control the quality outcome such as the synchronization
of labels. However, SMT company has strong power management
system; we creased the professional environment and human resources.
Interview transcript 2nd
– Ms. Wanpen (Chief executive operator at SMT label)
Good afternoon Ms. Wanpen,
Many thanks for taking your time to attend the interview one more time. Your
previous sharing is very useful for my research. Last time we have mentioned point that
SMT label is poor innovation activities, now I want to focus on this issue. Hope that you
can share more about this in order to help me find out the problem.
The interview can take from 10-15 minutes. I will take note during the interview to
avoid missing information. Are you ready?
Ms. Wanpen : of course, I’m ready
How often do you inspect the machine in factory?
Ms. Wanpen: Uhm, now I am so busy arranges with customers to discuss about price, new
sample and support sale team to look for new customers. Therefore, I rarely go to factory
in Cu Chi district, it may be around 1-2 times a month
How can you know any information or problem in factory?
8

Ms. Wanpen: We have administrative meeting with key staffs such as chief accountant,
sale manager and factory manager weekly. In that meeting, we present the current or period
problem to control and find out the solution to prevent it.
Did you hear any problem about product qualification?
Ms. Wanpen: Uhm, yes I received more feedback complain about product qualification, our
product did not meet up their requirement and similar with the sample we make before. In
addition, I heard from chief accountant announced that the manufacturing expenses is
increasing in material and repair machine cost.
What do you think what is the reason to affect that problem and do you have any
solution?
Ms. Wanpen: Overview, I know almost it came from our machine. You can see, our machine
old fashion, its take long time in manufacturing and usually put the wrong yarn in label or
weave the label unsmooth. We are finding the solution to upgrade and innovated machine and
technology but now we still have some limitation to conduct that plan.
Can you tell more about the status of our main chain machine in factory at the present?
Ms. Wanpen: In main chain machine, we have 26 power-loom machine included buy 20 pcs
in 2003 with degraded 75%, productivity only 45% and 6 pcs in 2010 with degraded 15%,
productivity only 85%.
Before, machine was imported from different country such as 45% Thailand, 30% China,
20% other Asia country so the homogeneity is weak. Because less homogeneity and degrade
machine, company face with difficult in buying replace accessories, low productivity, waste
the material, production norm is old and improper but did not change.
Do you think the limited innovation machines and technologies is the most important
affection to Business Company?
9

Ms. Wanpen: yes, our kind of business is manufacturing industry, so we depend on too
much about running machine and technology. The innovation machine and technology huge
effect to our business such as:
We will increase the productivity include quality and quantity. With the modern main
chain machine and technology, company will saved the material cost for each unit product
and less the material wastes. Moreover, the manual workers decrease and impact to
expenses about worker’s salary will decreased. That help company can get the lower cost of
goods sold so company can easy sell with the reasonable price, access the more markets.
Therefore, revenue and profit will increase.
Beside the saving the cost, the quantity and quality of product will be went up, that
can meet up the hard requirement of market about sample, branch. The status low price
but high quality is so meaningful and strong power in current competition.
Do you have any innovation machine plans currently and when we will start the process?
Ms. Wanpen: we lack of some important factors such as finance, workload, to conduct the
innovation plan. However, we will finger out and start the innovation plan as soon as
possible.
Thanks for your sharing and I wish you have nice day!

Luận Văn POOR INNOVATION ACTIVITIES AT SMT.doc

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