THE LOGISTICOM 2018

TECHNOLOGY ENABLEMENT
COLD CHAIN MANAGEMENT FOR RAW CHICKEN
Team: Evil Geniuses
1. Problem
In recent years, it has been witnessed a substandard food hygiene in the raw
chicken market. This can be explained mostly by the poor preservation condition of
the product in its supply chain from the abattoir to the end-consumer.
It is claimed that raw chicken must be continuously preserved in a temperature
range from 0 to 4 degrees Celsius to maintain its quality otherwise the product will
perish and cause severe impacts on the consumers.
There is a factory in Binh Duong City where processed raw chicken will be
weighed by a digital scale and packed in a plastic tray or bag by a vacuum packing
machine with information of the net weight and a QR code to help buyer trace the
products’ origin.
ABA Cooltrans are recruited to distribute raw chicken to several retail stores in
Ho Chi Minh City and collect cash on delivery (COD). During the collecting process,
these following situations often happen:
• Overlapping debt;
• Customers only pay for half of the order;
• Difference between the actual revenue and the revenue recorded in the system.
(Which could be resulted from the following reasons: outdated selling price recorded
on software, customers re-weigh the package and pay accordingly, etc.)
ABA Cooltrans’s task is to:
• Develop a cool transportation and distribution process for raw chicken satisfying all
requirements mentioned above while complying with relative Vietnamese laws.
• Develop a control process for the cash flow of this project to avoid revenue losses.

2. Summary
After researching the case and relating information, our team offers the
following solutions which meet all requirements mentioned:
• For cool transportation process:
➣ Using weights to check the accuracy of scales of both factory and retailer
stores by drivers.
➣ Maintaining temperature of raw chicken (0 – 4 degrees Celsius) by Gel ice
and Styrofoam boxes.
 ➣ Implementing a software to updating and checking price, quantity, drivers,...
to avoid discrepancies.
• For cash flow control process:
➣ Reducing shipping fee and chicken’s price (dealing with factory) to improve
ABA’s bargaining position.
➣ Providing flexible payment method: Each period will have a correspondent
penalty.

3. Market and company

3.1. Market
Growth in Vietnam’s cold chain industry has substantial potential according to
the Vietnam Cold Chain Market - Outlook to 2021 study, released by the Indian-based
Ken Research on October 24​th​ 2018.
The industry is estimated to register a CAGR (Compound Annual Rate Growth)
of 10.4 per cent during 2016-2021. The growing number of supermarkets, the launch
of new cold chain projects, the surge in manufacturing, and the demand for meat and
seafood will propel demand for cold storage in the years to come.
There are about 20 professionally-managed cold storage providers and many
other small independent cold storages in the country, but the latter are generally not
trusted by end-users. As leasing costs among cold storage providers don’t differ to any
great degree, the quality of storage facilities is key for customers. The number of cold
storage providers is anticipated to increase in the years to come, backed by a surge in
demand for better quality services among local and international establishments.
Vietnam’s domestic agriculture production is lagging behind Laos and
Cambodia in terms of supply chain development, with regular damage of 25-30 per
cent to fruit and vegetable yields due to a lack of refrigerated transport and storage.
Vietnam is expected to have about 1,200-1,300 supermarkets, 180 shopping centers,
and 157 department stores by 2020. Distribution centers, including cold storage, will
also increase in number and capacity to fulfill demand.
In reality, Vietnamese government implements TCVN 7047:2009 standards in
term of storage technology of cold meat whose temperature cannot exceed -120
degrees Celsius. Besides, The National Agro-Forestry-Fisheries Quality Assurance
Department (hereinafter referred to as NAFIQAD) is finishing the draft of National
Standards of cool meat which requires that meat is preserved from 0-4 degrees Celsius
right after slaughter and this temperature is maintained in whole transportation and
distribution process.
 Over the next few years, Vietnam’s logistics market will improve as companies
and investors eye the cold chain, with their concern will no longer being on immediate
cost but on improving quality in storage and transport.
3.2. Company
Founded in 2008, ABA Cooltrans has 10-year experience in operating cold
chain in Vietnam. Beginning as a cold transportation service provider, ABA Cooltrans
has gained so much experience in this area which is considered the most important
and complicated part of cold chain.
In 2016, ABA Cooltrans started launching cold storage service through
merging with a biggest cold storage provider in Hanoi (15,000 pallet positions). Now,
the company is trying to develop integrated logistics services.
Transportation service of ABA Cooltrans includes 3 main parts:
temperature-controlled transportation, delivery service, distribution service. Cold
storage service includes these main parts: cold storage service, distribution warehouse
service and other value-added services.
Competitive advantages of ABA Cooltrans are professional administrative staff
who be willing to keep promises about integrity - “A be A” in business through
transport and storage: right products and right temperature. ABA Cooltrans is
providing services for leading companies in retail and consumer goods sector such as:
Big C, Vinmart, METRO, Unilever, Vinamilk, Kinh Đô và BEL.

4. Full plan
4.1. Distribution process solution
Because the quantity ABA needs to deliver per day is 20 tons, we suggest that
ABA use 20-feet reefer container to ship 20 tons of raw chicken from the factory in
Binh Duong to the ABA’s cold storage to save the cost. After that, break-sorting
process will be conducted at the storage and temperature-controlled trucks will deliver
20 tons of raw chicken to the retail stores in HCM by milk-run method. Each of trucks
takes over one area, for example, one district
Control over weight of goods during transportation:
Nowadays there are many cheats and fraud in quantity checking. And to ensure
the accuracy of digital scales economically, we offer that ABA should use several
kinds of weight such as: 5, 20 and 50 kgs to check at both factories and retail stores.
And for saving cost, ABA’s drivers also play the role of supervisors. Furthermore, we
recommend hiring reliable drivers for inspecting loading and unloading goods
process.
Another common problem in refrigerated transportation is to maintain
temperature of the goods. So we want to use temperature – controlled trucks and Gel
ice to guarantee that the temperature is always between 0 and 4 celsius degrees,
especially upon unloading goods at retail stores.
Our solution not only uses physical methods but also includes the online part.
We did develop an magnificent website’s feature for making sure that the process is
perfect. This is outstanding innovation for checking and distribution management.
Login interface

Factory: Adjust commodity unit price (if necessary)

 Retailer: Confirm information

The latest time we set for retailer and factory to change the price of the order is
3 hours before actual delivery of driver for retailer. After negotiating the price unit,
the factory has to modify it on the website and then the retailer must confirm the
update, so the change is valid.
Driver: Input real loading data
 Factory: Confirm information

After loading the goods on container at factory, the driver will update
information like commodity, quantity, unit, total amount on the website. There will be
a notification to the factory account and it needs to confirm information submitted by
the driver to finish the delivery.

Driver: Input real unloading data

 Retailer: Confirm information

This is interface of retail stores. After submitting form of truck driver, store
staff needs to sign in our website and confirm information. And then the data of
quantity, price and time will be automatically updated on our system. The most
important in this interface is option for payment method. We offer prompt payment or
50% deferred payment.
4.2. Cash flow solutions
• Analyzing causes of late payment of retail stores
➣ Profit from selling raw chicken is not high.
➣ Large inventory.
➣ Spending money on investing other high-profit products or covering other
financial liabilities (pay bank interest).
• Solution
ABA Cooltrans, the factory and its retail stores should clarify term of payment
(whether COD allows deferred payment or not?)
➣ In short term (3 months)
Firstly, ABA Cooltrans, the factory and its retail stores should clarify term of payment
(allow deferred payment or not?)
In the first month, we will apply discount policy for prompt payment, which can
improve retailers’ profit ratio and boost their sales (if paying 50% on time is often).
The second and third month will be period of time for retailers to recognize their
changes of profit and consider paying more than 50%.
In the fourth month, retailer will have to make full payment or part of the payment
which meets requirements of ABA Cooltrans.
➣ In long term
 After third month, ABA Cooltrans needs to introduce shipping fee for prompt
payment and late payment. In term of delaying payment, ABA Cooltrans should apply
increasingly different shipping costs relatively to period of time to cover bank interest
and this have to be mentioned in the contract.
Furthermore, defining “short time” is subject to business strategy and financial
potential of ABA or whether that customer is worth creating long business
relationship or not.
Losing customer may be possible but it is the last choice of ABA Cooltrans
after the company uses all methods mentioned above and it depends on its plan.

5. Estimated Expenditure
Categories Estimated Value Estimated Rate
(VND) (%)

Weight 1M / truck -

Set up info system 10-15M -

Discount - 5% Revenue

Gel ice 1.8 M/ 9 tons gel ice / 20 tons raw -

chicken

6. KPIs and evaluation plan

After implementation, payment rate of retail stores should be increasing by
10% per month

Payment rate (%)

 Revenue loss resulted from weight loss after re-weighing should be 0%

7. Project feasibility
• Technical feasibility
First, ABA Cooltrans already has its own website which is operating very well.
What our team offer is creating a new built-in feature which controls the quantity of
goods delivered. The resource for this feature is available and it will save cost for
ABA instead of launching a whole new applications or websites.
Secondly, as you see, our interfaces for logging in, ABA, factories or retail
stores are good- looking and simple to use. The staff of all parties will know how to
use quickly and be fluent in a short time so that the good results come sooner.
Thirdly, our feature is practical or can be converted into working systems.
• Legal feasibility
At the beginning of 2019, the Vietnamese government introduced the Cyber
Security Law to avoid crimes on the internet. And all websites need to comply with it
and so does ABA’s one. After a long consideration, we are confident to believe that
the content of our feature is legal according to this law.
Besides, when one party submits or updates information, another party must
confirm and then the new data is saved in the system. It is a solid evidence to use in
the court if parties have dispute and can’t settle by conciliation.
• Operational feasibility
With our improvements in cool transportation process, we believe that if ABA
applies our plan, the rate of missing or damaged raw chicken will be decreased. If
some mistakes happen, ABA Cooltrans’’s liabilities will be minimized.
In regard to cash flow, our control process can avoid losing revenues through
credit financing for other parties (reducing price) and mutually beneficial discount
policy and the overlapping debt will mostly be decreased.
Our feature will allow the data of price, quantity,... will be updated in real time
so that ABA can handle the difference between actual revenue and revenue recorded
in the system.
• Economical feasibility
As far as we know, the feature our team offers will cost from 10 - 15 million
VND to create (the price is provided by Appota). This is not a big amount of money
compared to benefits of feature in the long run so we think that it is good value for
money and worth giving a try.
• Scheduling feasibility
Because the feature is easy to make so that the gap time from decision to
implement to applying officially in reality is short. Also, the advantages that our
feature bring for partners of ABA is big enough for them to agree to use it quickly.
They can easily to check the process and determine when the fault happens and who is
responsible for. If the liabilities is divided clearly, all parties can save time, cost and
the relationship among them can be maintained well in the long run.

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