Vinamilk Inventory management


Effective inventory management not only brings a smooth manufacturer but also maintains minimal operation costs for businesses. 

1. Introduction

Vinamilk proudly is National Brand in the "Top 10 Most Valuable Dairy Brands in the World" and "Top 36 Largest Dairy Companies in the World by Revenue". Vinamilk spreads its footstep in nearly 60 countries/territories and is the only representative of Southeast Asia in the Top 50 largest dairy companies in the world.

Vinamilk was established by merging three dairy factories (Thong Nhat & Truong Tho & Dielac Dairy Factory) on August 20th, 1976. In 2021, marking 45 years of operations, Vinamilk not only becomes the leading nutrition company in Vietnam but also presents a famous National Brand on the global dairy industry map.

Products for everyone

Vinamilk orients itself as a pioneer in global advanced nutritional trends to contribute to Vietnamese generations' physical and intellectual development. The Group has developed over 250 product types to serve consumers till now. 

Advanced Administration

Vinamilk believes an effective management process is a solid development base, bringing financial stability, investor confidence, and efficiency to business operations.

2. Current advanced management models

Every business should continuously optimize its inventory and maintain a healthy supply chain. There are several inventory management models which are popular because of their easy application and renovation, such as: 

- Economic order quantity (EOQ) model

- Work in progress (WIP) model

- Perpetual inventory model

- Just-in-time (JIT) model

Vinamilk is currently building an EOQ system to manage its inventory effectively. 

3. Vinamilk dairy factories

Vinamilk dairy factories run in automatic, closed-line manufacturers, from input to output. Also, Vinamilk built a leading smart warehouse in Vietnam, with an area of ​​6000 sqm. The warehouse is 105 meters long and 35 meters high, including 17 floors of racks with a capacity of 27168 cargo lots. Merchandises are automatically imported and exported by 15 RGVs (Rail guided vehicles) moving finished product pallets into the warehouse and 08 Robot Cranes (Stacker Crane) arranging pallets into the shelf system.

4. Vinamilk's inventory management

The best eCommerce traders and retail operators are motivated by a prudent reason to avoid out-of-stock. The use of deterministic inventory management models - such as the Economic Order Quantity (EOQ) model - will help you handle the ideal order quantity to minimize inventory costs (and avoid far from the scariest part of eCommerce).

Of course, Vinamilk is no exception when applying the EOQ model to calculate the optimal order quantity.

Raw materials inventory management: Because of the differences in material characteristics, packaging methods, suppliers, order cycles, and waiting time from ordering to delivery, the optimal order quantity cannot be totally matched with the EOQ model. It also depends on staff experience in the production plan department.

How to arrange inventory

* Materials 

Raw fresh milk, imported powdered milk, and spices are the main ingredients used at Vinamilk. The other materials need to be stored in a normal temperature environment with natural cooling. They will be managed by the FIFO method (First In, First Out) to ensure quality.

With almost materials, the materials that are stocked first will be used in the production process first. Materials are stored on giant shelves 4-6 floors high. Heavy items will be placed on the bottom, while materials with lower weight will be placed on top.

All shelves, cells, and boxes will be marked by codes/ barcodes and position-saved in WMS (warehouse management system). Therefore, while searching for materials that are in stock or out of stock, we only need to enter the product name or item code into the system, and the system will display the location, causing saving a lot of time. 

* Finished products

In addition to sorting by rows and shelves as in a material warehouse, the finished product warehouse is divided into four main areas: pasteurized milk, yogurt, etc., depending on regional market demands. If the inventory exceeds its storage capacity, Vinamilk will rent an outsource warehouse, separated for finished goods storage and raw materials storage. 

* Inventory management in the ERP model

The ERP system will have a map that locates every product, box, item, etc., which could show a full inventory report in the warehouse in real-time. Therefore, the production department could actively plan for manufacturing. 

To find more about Vinamil Inventory management, don’t hesitate to connect us at 19003133 or

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