5S – Method for improving productivity and organizational culture effectiveness

In an increasingly competitive context, enterprises seeking sustainable development require not only effective business strategies, but also the establishment of a scientific, safe, and high-productivity working environment. One of the foundational tools that supports the realization of this objective is the 5S method – a well-known Japanese improvement approach that has been successfully applied in millions of enterprises worldwide.

5S is not merely an activity of “workplace cleaning”, but a comprehensive management philosophy that helps enterprises change mindsets, enhance employee discipline awareness, and optimize all available resources. What is 5S, why is it important, and how can it be effectively implemented in Vietnamese enterprises?

What is 5S? – A scientific management method originating from Japan

In virtually any factory in Japan, large boards displaying the slogan “Implement 5S effectively” can often be seen. This is not merely a slogan, but a core management foundation that enables Japanese enterprises to achieve high levels of productivity and quality.

5S is a workplace management and improvement method developed in Japan, aiming to organize, arrange, clean, standardize, and sustain the workplace in a scientific and effective manner.

The meaning of the five “S” represents five Japanese principles:

• Seiri (Sort) – Eliminate unnecessary items.
• Seiton (Set in order) – Arrange items neatly, making them easy to find and easy to retrieve.
• Seiso (Shine) – Maintain a clean and safe workplace.
• Seiketsu (Standardize) – Establish standards to maintain the first three S.
• Shitsuke (Sustain) – Build habits and discipline so that 5S becomes part of the organizational culture.

In Viet Nam, many large enterprises such as Vinamilk, THACO, Samsung Viet Nam, and Toyota have applied 5S to optimize processes, reduce waste, and enhance work morale.

Importance of 5S for modern enterprises

According to statistics from the Asian Productivity Organization (APO), enterprises that implement 5S in a systematic manner can achieve:

• An average increase in labor productivity of 15–30%
• A reduction of 40% in workplace accidents, incidents, and risks
• A reduction of 20% in product defect rates after only six months of application

These figures not only demonstrate direct effectiveness but also reflect changes in mindset and working culture within the organization.

When 5S is implemented correctly, all employees – from management to workers – clearly understand their positions, roles, and responsibilities. Small actions, such as returning tools to their designated locations or cleaning up at the end of a shift, contribute to building a professional and sustainable operating system.

Which enterprises should apply the 5S method?

5S is not limited to manufacturing industries and can be applied to all types of organizations.

• Manufacturing and production enterprises: Help reduce waste in time, space, and operating costs.
• Logistics and warehousing enterprises: Help control materials and goods, reduce errors, and increase order processing speed.
• Service enterprises and offices: Provide a tidy working space, facilitate document management, and enhance concentration and work efficiency.
• Administrative bodies and educational institutions: Create a scientific working environment, enhance responsibility awareness, and promote a professional image.

With its high level of flexibility, 5S is an appropriate starting tool for organizations beginning their improvement and sustainable development journey.

Benefits of applying 5S in management and production activities

Create a professional and safe working environment

Reasonable arrangement and regular cleaning help reduce the risk of accidents, fires, or equipment damage. A tidy workspace not only delivers physical efficiency but also creates positive psychological effects – employees feel comfortable, motivated, and proud of their workplace.

Increase productivity – reduce waste

With the principle “Everything in the right place, at the right time”, 5S eliminates unnecessary searching and movement time. According to a survey at a Japanese mechanical factory, proper implementation of Seiton and Seiso alone reduced tool searching time by 60%, resulting in a significant productivity increase without additional investment costs.

Improve product and service quality

When work areas are clean and standardized, error rates are significantly reduced and processes are better controlled. This leads to more consistent product quality, higher customer satisfaction, and strengthened brand image.

Enhance work morale and organizational culture

5S encourages proactiveness, discipline, and collaboration. Through the implementation process, employees develop the habit of “identifying issues and addressing them immediately” rather than waiting for instructions from supervisors. This represents an important transition toward building a culture of continuous improvement and self-discipline from within the organization.

Serve as a foundation for other improvement tools

Models such as TPM (Total Productive Maintenance), Lean Manufacturing, and Six Sigma all begin with 5S. Without 5S, subsequent improvement tools face difficulties due to a disorganized working environment and non-standardized data. Therefore, 5S is the “first step” in an enterprise’s comprehensive performance transformation journey.

Conclusion

In an era where efficiency and innovation are essential, 5S is not only a shop-floor management tool, but also a management philosophy that supports enterprises in enhancing competitive capability. Implementing 5S does not require significant costs, yet it delivers long-term value beyond expectations: higher productivity, safer environments, more positive employee attitudes, and, most importantly, a stronger organizational culture.

What is Kaizen? Strategic importance of the continuous improvement philosophy in enterprises

In the context of global competition, Kaizen is not only a management tool but has become a core business philosophy that has enabled enterprises, notably Toyota, to achieve leading positions. This strategy focuses on “continuous improvement”—not through disruptive or costly changes, but through thousands of small, incremental improvements implemented consistently on a daily basis. Kaizen is a key means to optimize processes, improve quality, and build a flexible organizational culture oriented toward continuous progress.

Concept of Kaizen

In 1950, when the Japanese economy faced significant difficulties after the Second World War, a new management approach emerged that contributed to Japan’s development as an industrial power. This approach was Kaizen—the mindset of continuous improvement, which brought substantial changes to production and management practices.

Kaizen (改善) is a Japanese term formed from two words:
“Kai” (改): meaning “change”.
“Zen” (善): meaning “better”.

When combined, Kaizen means “change for the better” or “continuous improvement”.

This is not a short-term project, but a management philosophy and an organizational culture. The focus of Kaizen is to encourage everyone—from the chief executive officer to frontline operational employees—to participate in identifying and implementing small, incremental improvements in their daily work.

Importance of Kaizen: the driver of sustainable competitive advantage

The importance of Kaizen lies not only in small improvements, but in the fact that it is a method proven by empirical data to create core competitive advantages. Kaizen is the operational driver of Lean Manufacturing—a system that has transformed industries worldwide. When implemented comprehensively, Kaizen not only improves processes but also shapes organizational culture, turning every individual within the organization into a contributor to continuous development.

The most evident demonstration of the effectiveness of Kaizen comes from Toyota, which is regarded as the origin of this philosophy. Kaizen forms the foundation of the Toyota Production System, where every employee has both the right and the responsibility to propose improvement ideas. During peak years, Toyota received more than one million Kaizen proposals annually from its workforce, with over 90% of these proposals implemented in practice. This shows that Kaizen is not merely a slogan, but an effective operational system in which individuals proactively seek to eliminate waste and enhance productivity. This culture of continuous improvement enabled Toyota to surpass major competitors in the United States during the twentieth century, leading globally in both quality and cost efficiency.

In Viet Nam, Kaizen has also demonstrated clear effectiveness. A study at Yamaha Moto Electronics Vietnam indicated that after applying Kaizen in combination with the 5S model, production line output increased from 800 to 1,250 units per shift—an increase of more than 50%—while the number of workers remained unchanged. This provides evidence that Kaizen can be successfully applied in Vietnamese enterprises, supporting resource optimization, productivity improvement, and the development of a culture of continuous improvement.

From these examples, it can be observed that Kaizen is not only a management philosophy but also a strategy for sustainable development. It has been demonstrated as an effective approach to cost reduction, speed improvement, and quality enhancement—three essential factors for any enterprise. For this reason, Kaizen serves as a foundation enabling enterprises to maintain competitive advantage in an environment of ongoing global market change.

Which enterprises is Kaizen suitable for?

A common misconception is that Kaizen is applicable only to large Japanese manufacturing companies (such as Toyota).

In practice, the Kaizen philosophy is suitable for all types and sizes of organizations:

• Manufacturing enterprises: Kaizen is applied extensively to improve production lines, reduce product defects, optimize inventory, and enhance occupational safety.
• Service enterprises: Banks, hospitals, restaurants, and software companies can apply Kaizen to reduce customer waiting times, optimize administrative processing workflows, and improve customer service procedures.
• Small and medium-sized enterprises (SMEs) and start-ups: Kaizen is particularly effective as it does not require significant capital investment. These organizations can rapidly implement small changes to improve cash flow and enhance competitiveness.
• Non-profit organizations and public-sector bodies: Kaizen can be applied to improve administrative processes, reduce paper-based waste, and enhance the effectiveness of public service delivery.

Any organization that seeks to make “today better than yesterday” can apply Kaizen.

Benefits of Kaizen for enterprises

Consistent and appropriate application of Kaizen delivers specific and measurable benefits:

• Waste reduction (Muda): This is the core benefit. Kaizen helps identify and eliminate the eight primary forms of waste in processes (overproduction, waiting, unnecessary transportation, overprocessing, inventory, unnecessary motion, defects, and underutilization of employee talent).
• Quality improvement: By continuously identifying root causes of errors and addressing them, the quality of products and services is improved in a stable manner, increasing customer satisfaction.
• Productivity improvement: When unnecessary actions and waiting times are eliminated, processes become more streamlined, enabling employees to complete work more efficiently in less time.
• Improved employee morale and engagement: When employees are heard and their ideas are respected and implemented, they perceive themselves as an integral part of the organization. This increases motivation and reduces employee turnover.
• Cost savings: All of the above benefits (waste reduction, defect reduction, productivity improvement) directly contribute to reduced operating costs and increased profitability.
• Improved occupational safety: Employees are encouraged to identify and eliminate potential workplace risks, contributing to a safer working environment.

Conclusion

By focusing on small, continuous improvements, Kaizen enables enterprises to establish a strong cultural foundation in which all individuals strive to improve themselves and their work processes. This constitutes a key factor in achieving sustainable long-term competitive advantage, enabling enterprises not only to survive but also to develop in a stable and sustained manner.

KPI – Performance measurement indicators supporting sustainable business development

In a dynamic business environment, every organization requires a tool to measure work effectiveness and optimize development strategies. KPI – performance measurement indicators – serve as a reference framework enabling managers to monitor progress, assess capability, and determine the level of objective achievement. When properly designed and applied, KPIs are not merely figures in reports, but constitute a foundation supporting effective operations and sustainable growth.

What is a KPI?

A KPI (Key Performance Indicator) is a performance evaluation indicator used to measure the level of objective achievement of an individual, a department, or the entire organization within a defined period of time.

Unlike general metrics, KPIs are strategic in nature and closely linked to the overall objectives of the organization. For example, if an organization aims to increase revenue by 30% within a year, corresponding KPIs may include average quarterly revenue of 7.5 billion VND or a 25% increase in new customers.

KPIs may be expressed through quantitative values (revenue, profit, conversion rate, labor productivity, etc.) or through qualitative indicators such as customer satisfaction or internal communication effectiveness.

An effective KPI shall comply with the SMART principle – Specific, Measurable, Achievable, Relevant, and Time-bound – meaning that it is specific, measurable, feasible, relevant, and has a clearly defined time frame.

Importance of KPIs for organizations

When properly applied, KPIs provide clear direction for overall organizational activities, ensuring that all resources are focused on key objectives. With a system of specific indicators, managers can monitor strategic implementation progress, identify emerging issues early, and make timely adjustments. KPIs also contribute to a transparent and accountable working culture, in which each individual clearly understands their contribution to collective success.

The importance of KPIs is not only theoretical but has been demonstrated through numerous international studies. According to Harvard Business Review, companies that use KPIs effectively are 28% more likely to achieve their objectives than those that do not apply them. A report by McKinsey & Company indicates that data-driven organizations – with KPIs playing a central role – are 23 times more likely to acquire customers, 6 times more likely to retain customers, and 19 times more likely to achieve higher profitability. Similarly, a Gartner survey shows that organizations tracking KPIs using advanced analytics have improved operational performance by up to 60%.

These figures not only provide evidence of KPI effectiveness but also confirm that organizations capable of measurement are organizations capable of development. Only with clear data can organizations control progress, optimize resources, and make strategic decisions. KPIs therefore constitute one of the core tools enabling organizations to enhance competitiveness, adapt flexibly, and achieve long-term sustainable growth.

The most critical issue is how to establish a set of indicators appropriate for each position, ensuring both accurate measurement and employee development motivation. Below are five steps to support organizations in implementing a KPI system in an effective and practical manner.

• Step 1: Identify the department/person responsible for KPI development
• Step 2: Define specific KPI indicators
• Step 3: Assess KPI achievement levels
• Step 4: Link KPIs to compensation and rewards mechanisms
• Step 5: Periodically review and optimize KPIs

Which organizations should use KPIs

Any organization with defined objectives and a need to measure progress.

Previously, KPIs were often perceived as applicable only to large corporations. However, today this tool is applied regardless of size or type:

• Large corporations: Use KPIs to align objectives from top management down to subsidiaries, departments, and individuals, ensuring consistent direction throughout the organization.
• Small and medium-sized enterprises (SMEs): Use KPIs to optimize limited resources. Instead of addressing all aspects simultaneously, KPIs help focus on two or three “critical” indicators (e.g. cash flow, customer acquisition cost, customer retention rate).
• Start-ups: Use KPIs to monitor core growth indicators (e.g. weekly user growth rate, churn rate) to support rapid decision-making and capital raising.
• Non-profit organizations / public sector bodies: Use KPIs to measure social impact effectiveness (e.g. number of beneficiaries, cost per intervention) or public service performance, rather than focusing solely on profit.

Benefits of applying KPIs within organizations

When properly designed and implemented, KPIs provide value far beyond performance measurement. First, KPIs offer clear orientation for the entire organization. Through a defined indicator system, each individual understands their role in achieving shared objectives. Employees know what is expected of them, while managers have a basis for monitoring, evaluating, and adjusting plans in a timely manner.

KPIs also create a more transparent and equitable working environment. When results are measured using data rather than subjective judgment, evaluations become more objective. Employees can see recognition for their efforts, while managers can more easily identify and support individuals facing difficulties. This enhances accountability and improves overall workforce productivity.

Another important benefit is the ability to optimize resources and make accurate strategic decisions. KPIs reflect the actual effectiveness of each department, enabling organizations to identify strengths and weaknesses early in operational processes. Based on this, leadership can adjust human resources, budgets, or business strategies using data rather than assumptions.

In addition, KPIs play a role in stimulating individual development motivation. When objectives are closely linked to transparent reward and penalty mechanisms, employees are more motivated to make efforts and improve themselves. Over the long term, this contributes to the formation of a performance-oriented working culture, in which individuals are proactive, accountable, and committed to collective outcomes.

Conclusion

KPIs are not only performance measurement tools but also strategic management instruments that help organizations maintain direction, enhance competitiveness, and achieve sustainable development. In the data-driven era, organizations that are able to measure accurately and act based on reliable data will be those that take the lead.

What is LEAN ? Five principles, eight wastes, and effective application

In an increasingly competitive environment, lean management has become an approach that enables organizations to eliminate waste, optimize processes, and enhance value for customers. Originating from the Toyota Production System, lean is now widely applied across sectors—from manufacturing to services—as an operational philosophy oriented toward efficiency and sustainability.

What is lean? Origin and background of lean

Concept of lean

Lean is a management and work organization method aimed at optimizing effectiveness and minimizing waste. Lean originated from the Toyota Production System in Japan during the 1950s and 1960s, developed by Taiichi Ohno and Eiji Toyoda, with a focus on increasing customer value through the elimination of non-value-adding activities in production processes.

Lean is a systematic methodological framework intended to improve processes by identifying and eliminating elements that do not create value—not only in manufacturing but across all organizational activities. The core of lean lies in focusing on value as perceived by the customer, with objectives including quality improvement, cycle time reduction, cost reduction, and continuous improvement.

Lean is not merely a method but a comprehensive management philosophy that encourages the participation of all employees—from leadership to operators—in the pursuit of continuous improvement.

Origin of lean: From Toyota to global application

The lean philosophy originates from the Toyota Production System (TPS), developed after World War II by Taiichi Ohno and Eiji Toyoda. TPS was created with the objective of eliminating waste and optimizing performance in automobile manufacturing, based on key principles such as Just-In-Time production and Jidoka (automation with a human focus). Through the application of TPS, Toyota rapidly became a global reference for operational efficiency and quality.

Over several decades, lean has extended beyond manufacturing and has been applied in services, healthcare, technology, education, and public administration, becoming a widely adopted management philosophy for comprehensive organizational performance improvement.

Importance of lean in modern organizations

According to surveys by the Lean Enterprise Institute, organizations applying lean can reduce operating costs by up to 25–40%, shorten production cycle times by 30–50%, and increase average labor productivity by 20–30% within 1–2 years of implementation. In Viet Nam, organizations such as Vinamilk, THACO, Samsung, and FPT Software have recorded clear improvements after applying lean, including reductions in product defects, optimization of production lines, and improvements in customer satisfaction.

These data indicate that lean is not merely a management trend but a foundational approach that supports organizations in maintaining competitive advantage in the digital era. Lean contributes to waste reduction, performance improvement, quality enhancement, and the promotion of a culture of continuous improvement—key determinants of sustainable organizational development.

Five core lean principles supporting streamlined operations

The lean philosophy is based on five fundamental principles that guide improvement activities and efficient operations:

• Define value: Organizations must clearly understand what constitutes real value for customers—what customers are willing to pay for.
• Map the value stream: Analyze the entire process to identify and eliminate steps that do not create value.
• Create continuous flow: Optimize workflows to eliminate bottlenecks, reduce waiting time, and improve productivity.
• Establish a pull system: Produce only in response to actual customer demand, avoiding excess inventory and resource waste.
• Pursue perfection: Continuous improvement, where every individual is responsible for identifying better ways of working each day.

Identification and elimination of eight fundamental wastes in lean

The focus of lean is the identification and elimination of all forms of waste in processes to deliver real value to customers. There are eight common types of waste that organizations should address:

• Defects: Products or services with errors that require rework or correction.
• Overproduction: Producing more than required, resulting in excess inventory and additional cost.
• Waiting: Idle time due to lack of materials, information, or equipment.
• Underutilization of talent: Failure to fully use employees’ capabilities and ideas.
• Transportation: Unnecessary movement of materials or information.
• Inventory: Excess raw materials or finished goods, tying up capital and increasing storage costs.
• Motion: Unnecessary movements of people or equipment.
• Overprocessing: Performing more work than required by the customer, resulting in resource waste.

Understanding and eliminating these eight wastes forms the basis for streamlined, effective, and flexible operations.

Common lean tools

Lean is not only a philosophy but is also operationalized through a system of practical tools that support effective implementation:

• 5S: Organizing and maintaining a structured, clean, and effective workplace.
• Kaizen: A culture of continuous incremental improvement involving all employees.
• Kanban: A visual management system for controlling workflow and limiting inventory.
• SMED: Reducing changeover time between production processes.
• Poka-yoke: Error-prevention design to avoid defects at the source.
• Just-In-Time (JIT): Producing at the right time and in the right quantity to minimize inventory.
• Lean six sigma: Integration of lean and six sigma to optimize processes through both data analysis and continuous improvement thinking.

Which organizations should apply lean?

Lean is applicable to most types of organizations seeking to optimize processes and improve operational performance. In manufacturing sectors such as automotive, textiles, and food processing, lean helps reduce defects, inventory, and costs. Service organizations such as banks, logistics providers, and retailers can apply lean to shorten processing times and enhance customer experience. Technology companies and start-ups use lean to enable rapid experimentation and continuous product improvement. Healthcare, education, and public administration organizations can also apply lean to reduce administrative complexity and improve service efficiency. In general, lean is an effective approach for any organization aiming to operate in a streamlined and sustainable manner.

Benefits of lean when applied in organizations

Lean not only supports cost reduction but also changes organizational thinking and operational practices. Key benefits include:

• Improved performance: Streamlined processes reduce waiting time, increase productivity, and enable faster response to market demand.
• Cost reduction: Eliminating waste in production, transportation, inventory, and human resources results in significant savings.
• Shortened production or service delivery time: Removing unnecessary steps and optimizing processes reduces production or service lead time, enabling timely response to customer demand. For example, an automobile manufacturer may reduce vehicle assembly time by reorganizing production lines.
• Enhanced market competitiveness: Lean enables organizations to deliver higher-quality products or services at more competitive costs, thereby improving market position.
• Increased customer satisfaction: Higher quality, faster delivery, and lower cost.
• Improved quality: Continuous improvement efforts reduce errors and raise product and service standards.
• Development of a positive culture: Lean encourages employee participation, collaboration, and initiative, forming a foundation for sustainable development.

Conclusion

Lean is not only a management method but a streamlined operational mindset in which all individuals work toward creating real value and eliminating waste. In the context of digital transformation, lean serves as a key approach for Vietnamese organizations—across manufacturing and services—to optimize resources, improve productivity, and achieve sustainable development. Regardless of organizational size, any organization with a commitment to improvement and process streamlining can begin its lean journey.

What is OKR? A method to improve organizational performance

In the current context of intense competition, many organizations are seeking an effective objective management model—OKR is considered a factor that can create differentiation. OKR supports organizations in clearly defining strategic objectives, measuring progress through specific indicators, and aligning teams toward a common direction. Not only Google, Intel, or LinkedIn, but also thousands of organizations worldwide have demonstrated that OKR can support improved performance when applied appropriately.

Concept of OKR

“OKR” is an abbreviation of Objectives and Key Results. OKR is an objective-setting and leadership tool that supports the communication of what is intended to be achieved and the milestones required to achieve those objectives. This is a goal management method that enables organizations, teams, and individuals to establish and monitor measurable objectives. The OKR structure is composed of two elements:

• Objective: The objective represents the intended outcome that an organization, team, or individual aims to achieve. Objectives should be clear, specific, measurable, achievable, and appropriately challenging.
• Key result: Key results are indicators used to measure the progress of an organization, team, or individual toward achieving an objective. Key results should be specific, measurable, achievable, and time-bound.

OKR has a long history originating in 1954, when Peter Drucker introduced Management by Objectives (MBO). In 1968, Andrew Grove joined Intel and further developed MBO into the OKR framework as it is known today. John Doerr joined Intel in 1974 and learned OKR during his tenure there.
Doerr later joined Kleiner Perkins Caufield & Byers, a well-known venture capital firm, and became one of the early investors in Google. He introduced OKR to Google’s founders, Larry Page and Sergey Brin, who subsequently implemented the OKR framework at Google, where it continues to be used. Since then, OKR has gradually become more widely adopted and is currently used by organizations worldwide.

Five core OKR principles: from focus to stretching

To implement OKR effectively, organizations are expected to follow core principles, commonly referred to as the “FACTS” principles of OKR:

1. Focus:
   OKR requires organizations to prioritize and concentrate on the most important objectives.
   The number of objectives should be limited (typically no more than three to five), with each objective having three to five key results.
2. Alignment:
   OKR links individual and departmental objectives with the organization’s overall strategic objectives.
   Top-down alignment supports employees’ understanding of their roles in advancing organizational strategy, thereby strengthening engagement.
3. Stretching:
   Objectives are set above the current level of capability (often referred to as stretch goals or aspirational OKRs).
   Google considers an average achievement level of 60–70% across all OKRs as successful. Setting higher objectives is intended to support significant long-term outcomes.
4. Transparency:
   OKRs across the organization, from the chief executive officer to employees, are made publicly available and transparent.
   This supports the development of a culture of trust and ensures that all individuals have visibility of work and plans.
5. Tracking:
   OKR progress should be monitored and reviewed on a regular basis, typically on a quarterly cycle.
   Continuous monitoring supports risk limitation and ensures progress toward objectives.

Additional principle: separation of OKRs from performance evaluation and compensation
OKRs should not be used to evaluate employee performance or be directly linked to salary or bonuses.
The purpose of OKRs is to encourage and challenge employees to pursue ambitious objectives, whereas traditional performance management systems focus on accountability. Separating these elements supports innovation and risk acceptance.

Organizations suitable for OKR adoption

The OKR model is designed to be flexible and applicable to organizations of all sizes and across all sectors.

• Large and multinational organizations: Many technology companies and global corporations have adopted OKR, including Google, Intel, Adobe, Netflix, LinkedIn, Cisco, Deloitte, Microsoft, and Spotify.
• Startups and small organizations: Despite the misconception that OKR is too complex for small teams, OKR is considered an effective tool for startups to support rapid growth and maintain focus on strategic direction.

What benefits does OKR provide? Key considerations

The implementation of OKR provides several strategic and cultural benefits to organizations:

• Increased focus: OKR limits the number of objectives, requiring organizations and employees to concentrate on the most significant issues.
• Improved internal alignment: Individual and departmental work is clearly connected to organization-wide strategic objectives, ensuring that resources are directed toward shared outcomes.
• Enhanced transparency: OKR supports an open culture in which members can understand plans and progress, thereby supporting informed decision-making.
• Progress measurement: With measurable key results, OKR provides an accurate representation of objective attainment, supporting timely review and adjustment.
• Improved outcomes: Setting ambitious objectives is intended to stimulate potential and support higher levels of achievement.
• Stronger engagement: When employees understand the connection between their roles and organizational objectives, they experience increased purpose and meaning in their work, supporting engagement and productivity.

Conclusion

OKR is not only an objective-setting tool but also a reference framework that supports organizational focus, team alignment, and performance improvement. When applied appropriately, OKR supports visibility of progress, learning, and timely adjustment, enabling the translation of strategic objectives into operational outcomes. This provides organizations with an opportunity to establish an effective objective management approach and achieve improved results.

QC tools – Key instruments for organizations to achieve international conformity and sustainable development

In the period of global integration, many Vietnamese organizations are facing increasing pressure related to productivity, quality, and compliance with international standards. Quality control is no longer an optional activity but has become a mandatory factor for competitiveness and organizational continuity. QC tools – a set of instruments for quality management and improvement – serve as effective means to support organizations in achieving international conformity, improving performance, and establishing a foundation for sustainable development.

What are QC tools?

QC tools (quality control tools) are a set of seven basic graphical and statistical instruments established to collect, organize, and analyze quality-related data and to address issues associated with production or service provision processes. Originating from enterprise training programs in Japan, these tools were developed with the purpose of deploying user-friendly statistical methods that can be applied by personnel with different skill backgrounds without requiring advanced training. The absence of requirements for complex analytical capability enables frontline employees in processes (production, services, administration) to proactively collect and analyze data and to participate in problem-solving activities. This facilitates the transformation of organizational culture from a centralized quality control model to a total quality management (TQM) or Kaizen-oriented model, thereby forming a culture of continuous improvement.

Although there are minor variations in identifying the seventh tool, the first six tools in the set of seven QC tools are consistently agreed upon by experts and international quality management systems.

The list of seven basic tools includes:

• Check sheet
• Pareto chart
• Cause and effect diagram / Ishikawa diagram / fishbone diagram
• Histogram
• Control chart / Shewhart chart
• Scatter diagram
• Charts/graphs

The importance of QC tools for organizations

Within the global supply chain, the seven QC tools are not merely independent statistical instruments but constitute an essential foundation within quality management systems (QMS). These tools provide a structured approach to collecting and analyzing objective evidence, in accordance with requirements for evidence-based decision-making. At the same time, their implementation supports organizations in meeting international standards such as ISO 9001, ISO 14001, and ISO 45001, thereby establishing a solid basis for sustainable development. In addition, all countries have legal regulations requiring products and services to ensure safety and to cause no harm to consumers and the environment. Therefore, QC tools represent an effective means for organizations to generate records demonstrating conformity with legal requirements and technical standards related to quality and product safety.

Which organizations should implement QC tools?

The set of seven QC tools is recognized for its universality, allowing wide application across various types of organizations, scales, and sectors, including:

• Industrial manufacturing organizations: sectors such as automotive, electronics, mechanical engineering, food, and pharmaceuticals are pioneering users, as QC tools help reduce production defects, optimize production lines, and ensure products meet international standards.
• Service organizations: organizations in logistics, hospitality, healthcare, education, and banking can also apply QC tools to improve service quality and customer experience.
• Organizations that are implementing or planning to implement ISO standards: QC tools are fundamental instruments within ISO 9001 systems, supporting internal audits, process improvement, and compliance with international certification requirements.
• Medium-sized and large organizations: organizations with complex processes, multiple departments, and large workforces require QC tools to harmonize operations and control performance across units.
• Organizations oriented toward sustainable development and digital transformation: QC tools integrate quality data with digital technologies, forming a foundation for smart management and supporting green and sustainable development.

Benefits for organizations when implementing QC tools

The implementation of the seven QC tools provides multidimensional benefits, ranging from improvements in organizational culture to measurable financial outcomes, including:

• Improvement of product and service quality: supporting conformity with standards and customer requirements, thereby enhancing organizational credibility.
• Increased productivity: by identifying and eliminating inefficiencies in processes, QC tools support process optimization.
• Cost reduction: early identification of issues and defects helps minimize costs associated with nonconforming products, rework, and equipment failure.
• Data-based decision-making: rather than relying on assumptions, these tools provide objective data to support more accurate and effective management decisions.
• Effective problem-solving: providing a structured framework to identify root causes and address issues comprehensively.
• Enhancement of employee skills and morale: employees become more confident and proactive in controlling the quality of their own work, while teamwork is strengthened.
• Improved customer experience: higher product quality and more efficient processes lead to increased customer satisfaction.

Conclusion

The QC tools set constitutes a core foundation enabling organizations to achieve international conformity, improve performance, and pursue sustainable development, while promoting a culture of continuous improvement throughout the organization. This represents a key means for Vietnamese organizations to engage with global markets and pursue further development outcomes.

SEO description: QC tools – a set of instruments for quality management and improvement – support organizations in achieving international conformity, optimizing processes, and establishing a foundation for sustainable development.

TQM – Comprehensive quality management solution for enhancing organizational capability

In the context of intense market competition and increasingly stringent quality requirements, organizations require effective quality management tools to improve productivity, optimize costs, and ensure customer satisfaction. TQM (Total Quality Management) is a comprehensive solution that not only focuses on products but also extends across the entire organization, including human resource management, process operations, and a culture of improvement. Proper implementation of TQM helps organizations reduce errors, increase operational efficiency, enhance brand image, and strengthen competitive capability.

What is TQM?

TQM (Total Quality Management) is a comprehensive quality management approach developed in response to the need to improve the quality of products and services in manufacturing and service organizations. This approach is developed based on the principles of continual improvement, quality control, operational efficiency, and standardized processes. TQM focuses on the organization as a whole, integrating people, processes, and technology to achieve optimal quality. International bodies such as ISO and leading quality management organizations have issued related standards to support organizations in implementing TQM in a transparent, effective, and sustainable manner.

The concept of “total” in TQM is the most important distinguishing factor, emphasizing that quality is not solely the responsibility of a final inspection department but a shared responsibility across the organization. This holistic approach applies to:

• The entire organization: All employees are required to participate in TQM. This participation extends beyond actions and is embedded in organizational culture, from recruitment processes to internal procedures and product development.
• All processes: TQM covers the entire value chain, from design, planning, and production to service delivery and after-sales activities.
• All objectives: TQM integrates quality into organizational culture and long-term development strategy in order to achieve a shared vision and mission.

Accordingly, the primary objectives of TQM are to reduce errors, improve productivity, optimize costs, create added value for customers, and enhance organizational competitiveness in the global market.

Why is TQM important for organizations?

TQM is not only a management tool but also an essential strategy for enhancing organizational competitiveness in the context of globalization and increasing quality requirements. Globalization and international competition have made quality a prerequisite for maintaining competitiveness and participating in global supply chains. Customers worldwide now have higher expectations and greater influence, requiring organizations to place customer satisfaction at the center while maintaining consistent quality to protect reputation in an era of information transparency.

In addition, increasingly stringent legal requirements, technical regulations, and industry standards require organizations to establish a robust quality management framework such as TQM. By implementing TQM, organizations standardize production and operational processes, ensuring that all activities—from human resource management and quality inspection to continual improvement—meet international standards such as ISO 9001, ISO 14001, and ISO 45001. At the same time, this approach supports compliance with legal and partner requirements and enhances the organization’s ability to adapt to market changes. The implementation of TQM also contributes to improving brand image and building sustainable competitive advantage, thereby forming a foundation for long-term development.

Which organizations should apply TQM?

TQM is suitable for all types of organizations, from multinational corporations to small and medium-sized enterprises (SMEs), as its core principles—continual improvement, customer focus, and full employee participation—are necessary for all organizations. However, TQM requires significant cultural change; therefore, it provides particularly clear benefits for organizations operating in the following sectors:

• Manufacturing and production: Such as automotive, electronics, food, and construction materials. These sectors require strict control of processes and quality standards to minimize defects and optimize costs.
• Services: Finance, banking, healthcare, education, and other service industries. TQM helps service organizations enhance customer experience, optimize service processes, and maintain brand credibility.

Benefits for organizations when implementing TQM

The implementation of TQM provides multiple benefits for organizations, including:

• Improvement of product and service quality
  TQM enables organizations to control quality from early stages, reduce errors and complaints, and ensure that products consistently meet standards and customer requirements.
• Optimization of processes and operational efficiency
  Standardization of processes, elimination of waste, and continual improvement enable smoother operations, cost reduction, and increased productivity.
• Development of a quality culture throughout the organization
  TQM is not only a technical tool but also an organizational culture that encourages employee initiative, creativity, and accountability for work quality.
• Compliance with legal requirements and international standards
  Standards such as ISO, GMP, HACCP, and ESG emphasize comprehensive quality management. TQM supports organizations in meeting these requirements, enhancing credibility, and expanding opportunities for international cooperation.
• Support for sustainable development and innovation
  TQM provides a foundation for continual improvement, smart manufacturing, and digital transformation, enabling organizations to develop sustainably and proactively adapt to market changes.

Conclusion

TQM – a comprehensive quality management solution not only supports organizations in controlling and improving product quality but also in optimizing processes, enhancing competitive capability, and building a high-quality organizational culture. In the modern business environment, the implementation of TQM is a strategic step to strengthen organizational capability and move toward sustainable development and long-term success.

TPM – Establishing a total productive maintenance system for enterprises

In the context of globalization and increasingly intense competition, investing in and maintaining high-quality machinery systems is a key factor enabling enterprises to overcome challenges and achieve sustainable development. TPM – total productive maintenance is a comprehensive management solution that provides an integrated system combining people and processes to improve productivity and effectively reduce operating costs.

What is TPM?

TPM (Total Productive Maintenance) is a management approach aimed at optimizing the performance of equipment, people, and processes throughout the entire asset life cycle. Originating in Japan and developed from management principles of Toyota, TPM enables the alignment of all stakeholders within the organization, particularly between operations and maintenance functions, to achieve maximum production efficiency, uninterrupted operations, and proactive, timely maintenance to prevent equipment failures.

The primary objective of TPM is to establish a production environment by improving effectiveness in both equipment and human resources. TPM aims to completely eliminate production losses, expressed through four “Zero” objectives (the four zeros):

• Zero breakdowns
• Zero defects
• Zero waste/losses
• Zero accidents

With the intention of creating a production environment without mechanical failures and technical disruptions by involving all personnel in maintenance tasks, without heavy dependence on mechanics or engineers, TPM is a program that operates with a long-term, continuous strategic vision. It requires sustained effort over several years by the enterprise to be successfully implemented and maintained.

Why is TPM important for enterprises?

The development of the Fourth Industrial Revolution has made the global market more competitive than ever. Enterprises face requirements to increase productivity, reduce waste, and ensure continuity in production. In an environment where equipment performance and smooth operation determine competitiveness, TPM becomes an important tool enabling enterprises to meet the standards of modern manufacturing, where people, machinery, and processes must operate as an integrated system. International organizations and export markets increasingly require enterprises to demonstrate capability in safe, efficient, and environmentally responsible operational management. By implementing TPM, enterprises establish a stable, transparent, and responsible operational foundation, meeting requirements for sustainable development goals (SDGs) and international standards such as ISO 14001 and ISO 45001. This is a vital factor for enterprises seeking to maintain their position in the global supply chain.

In addition, regulatory authorities in Viet Nam and many other countries are tightening requirements related to equipment safety, environmental protection, and production risk management. Non-compliance or the occurrence of incidents may result in legal consequences, loss of certification, or exclusion from supply chains. Therefore, TPM becomes a compliance-oriented requirement that enables enterprises to demonstrate equipment control capability, maintain safety, and prevent incidents, in line with international risk management trends.

Which enterprises need to implement TPM?

TPM is necessary for most organizations of all sizes, but it is particularly effective and essential for medium-sized and large enterprises with substantial equipment assets and a need to stabilize production processes, specifically:

• Heavy industrial manufacturing: steel, cement, chemicals, etc., due to high downtime and repair costs
• High-speed production lines: food, beverages, packaging, etc., requiring continuous operation time and consistent product quality
• Enterprises using highly automated machinery: due to the complexity of equipment, requiring continuous and close coordination between operations and maintenance
• Enterprises with high defect or waste rates: requiring quality control starting from equipment performance

Benefits for enterprises when implementing TPM

The implementation of TPM provides comprehensive benefits for enterprises, directly affecting profitability and sustainable development:

• Increased productivity and operational efficiency
  TPM helps reduce downtime, optimize overall equipment effectiveness (OEE), and ensure continuous and stable operation of production lines, thereby enhancing market competitiveness.
• Reduced maintenance and repair costs
  Through preventive and proactive maintenance, enterprises limit unexpected failures, reduce major repair costs, and extend equipment life.
• Improved product quality
  Stable equipment operation reduces product defects and process errors, supporting the objective of zero defects production.
• Enhanced employee proactiveness and responsibility
  TPM encourages all employees, from operators to managers, to participate in maintenance activities, increasing ownership, responsibility, and problem-solving capability.
• Support for digital transformation and smart manufacturing
  TPM standardizes maintenance processes and generates standardized operational data, enabling easier integration of IoT, AI, and big data technologies toward smart factory implementation.
• Compliance with legal requirements and international standards
  Enterprises implementing TPM can more readily comply with ISO, HACCP, GMP, and ESG requirements, reduce legal risks, and strengthen credibility with international partners.

Conclusion

In the context of globalization and increasingly stringent legal requirements, TPM is a key approach enabling enterprises to maintain effective operations and achieve sustainable development. Focusing on maintenance, equipment, people, and operations enhances overall organizational value. Investment in a TPM system delivers long-term benefits, enabling enterprises to better adapt to market challenges, maintain competitiveness, and expand business scale.

MFCA – A method for effective management of material flow

Environmental protection and sustainable development are current trends in the global economy. In particular, optimizing business efficiency and production costs is an important factor for enterprises to maintain competitiveness. The MFCA improvement tool is a solution that focuses attention on material and energy flows, providing detailed and quantitative insight into losses, thereby establishing a basis for improving production processes and enhancing business efficiency.

What is MFCA?

MFCA (material flow cost accounting) is a method that supports the management and optimization of material flow efficiency in production processes. Initially developed in Germany, this tool was subsequently adapted and enhanced in Japan to improve ease of application, by separating materials into material inputs and energy sources, and by measuring them throughout the process in order to develop improvement plans more effectively. In essence, MFCA is an environmental management accounting (EMA) method that tracks and quantifies material flows and inventories within an organization in both physical units and monetary units, with the objective of identifying the exact costs of waste and losses. The strategic role of MFCA is to promote the concept of green productivity by reducing negative environmental impacts while improving business efficiency.

MFCA: An important improvement tool for modern enterprises

As a tool with a high level of legal relevance and international recognition, MFCA supports enterprises in complying with and meeting environmental management frameworks in accordance with international standards of the International Organization for Standardization (ISO). MFCA is not limited to cost reduction but also serves as a lever to improve resource productivity. Case studies in Viet Nam have shown that the application of MFCA can result in significant financial outcomes, ranging from savings of hundreds of millions to billions of Vietnamese dong per year, while also doubling labor productivity in key process stages. Introduced in various international environmental research documents, such as the Environmental Management Accounting Book of the United Nations Division for Sustainable Development (UNDSD), MFCA meets the environmental protection requirements of regulatory authorities. MFCA has changed approaches to cost management by requiring enterprises to fully account for material losses that are often hidden within overhead costs. Dual measurement in both physical and monetary units removes barriers between technical management and financial management, enabling managers to recognize the actual scale of waste and to identify priority areas for investment.

Which enterprises should apply MFCA?

MFCA can be applied across all sectors that use materials and energy, regardless of organizational type or size, specifically including:

• Material- and energy-intensive enterprises: Companies with complex production processes involving substantial material transformation, where material losses represent significant potential costs. Typical examples include the food processing industry (such as sushi shrimp processing), the rubber manufacturing industry, the steel mechanical manufacturing industry, and chemical industries.
• Enterprises with high losses or defect rates: Organizations that face difficulties in accurately calculating actual material losses and related costs using traditional accounting systems should prioritize MFCA to identify material use and associated costs throughout the production process.
• Enterprises within supply chains: MFCA can be extended across supply chain enterprises, enabling them to identify efficient fuel and material use, thereby improving their position within the value chain and meeting increasingly stringent sustainability requirements from customers or major partners.
• Enterprises under environmental pressure: MFCA is considered an effective solution for organizations facing macro-environmental challenges such as resource scarcity, climate change, or increasingly stringent environmental regulations.

Benefits for enterprises when applying the MFCA tool

MFCA is not merely an accounting method but a strategic improvement and management tool, delivering several essential benefits for executive management:

• Process improvement and optimization: MFCA addresses communication barriers between technical departments (focused on physical quantities) and financial departments (focused on monetary values) by quantifying flows in both physical units (supporting engineers in identifying technical issues) and monetary units (enabling financial managers to assess economic significance).
• Measurement of absolute waste: MFCA is a system for measuring material flows and inventories to accurately identify waste from an absolute perspective. The tool provides clarification on waste by enabling management to gain a clearer and more detailed understanding of production and business processes, supporting appropriate decisions to improve the efficiency of material, energy, and equipment utilization.
• Leverage for productivity and competitiveness improvement: Through MFCA application, enterprises can enhance competitiveness by using resources such as materials, energy, and labor more efficiently. Optimization of production processes has been demonstrated to directly increase profitability and reduce product costs.

Conclusion

With the ongoing transition toward a green economy, MFCA is increasingly assuming an important role in Viet Nam. MFCA represents a standard for Vietnamese enterprises to integrate into global supply chains, where transparency and optimization of material flows are regarded as mandatory factors for maintaining competitive position.

SEO description: MFCA (material flow cost accounting) is a method that supports the management and optimization of material flow efficiency in production processes.