Poor fixed asset management at Taicera enterprise company

Abstract

Taicera Enterprise Company is the leading company in Vietnam in the ceramic tile industry. Like any for-profit organization, Taicera would like to make a profit to grow the company. However, in 2021, one sales unit of the company, the Taiwan export team, suffered a loss. This affected the performance of the whole company. Through the company’s sales data, target, and the benchmark of the tile industry, selling to Taiwan at a loss is determined to be the symptom that this thesis wants to focus on. This symptom exposes the company to risks because it affects the company’s financial status, demotivates staff’s working morale, and defaces potential business opportunities. This PSO project used three types of research methods: primary sources of information, particularly interviewing and observation; secondary data, like all types of the company’s reports and documents, as well as the company’s official website; and literature research, such as textbooks, scholar Google, and the Google search engine. With the PSO-based technique, methods, and process, four possible problems were identified, which were: inappropriate labor cost management; frequent breakdowns on machines; an inappropriate allocation for depreciation costs; and no adjustments on improper machines. Based on the literature, three possible problems of frequent breakdowns on machines, an inappropriate allocation for depreciation costs, and no adjustments on improper machines could be grouped as one problem of poor fixed asset management. Therefore, the initial four potential problems were reduced to two possible problems: inappropriate labor cost management and poor fixed asset management. After validation of two problems, inappropriate labor cost management was eliminated because it accounted for a smaller percentage of the cost of goods sold, and thus poor fixed asset management was pointed out to be the central problem of selling to Taiwan at a loss. Such poor management has tremendous consequences, including reducing the company’s profit, impacting the company’s competitiveness and sustainability, and creating an unsafe working environment for workers. This problem has to be addressed as soon as possible, and it is the main topic of this PSO project: "poor fixed asset management at Taicera Enterprise Company." To solve the problem, it is essential to find out the root causes. Based on literature and validating with the company situation, three potential causes were found, which are a lack of professional fixed asset management personnel, no sound IT support, and a lack of fixed asset management process. Then, these three causes were integrated with the diagnostic story and main cause validation. As a result, the lack of a fixed asset management process was identified as the main cause. To tackle the cause of a lack of a fixed asset management process, two solutions were suggested, which were: applying fixed asset management by using ISO 55000 and investing in developing fixed asset management software. Both solutions are estimated to cost the same amount and to provide the same qualitative benefits, but when they were subjected to four criteria: functional requirements, user requirements, boundary conditions, and design restrictions, an ISO 55000 application proved to be more suitable and adaptable in the company's current situation. This leads to the final part-action plan for the solution, which is some six months for the ISO certificate application and another six months for internal observation. With this thoroughly PSO-based project, the problem of poor fixed asset management can be addressed, and this will improve the company's bottom line and sustainable development.