Close cooperation in providing necessities is essential for the sustainable development of both production and distribution, besides avoiding instability in supply and demand, prices, and quality of goods.Weak links mean higher prices Lately, there has been much fluctuation in the consumer goods market, particularly in food items and agricultural materials, affecting the national consumer price index, noted Tran Nguyen Nam, Deputy Director of the Domestic Market Department. This in turn directly influences standard of living. Objective factors aside, there exists a very loose connection in the essential goods supply chain, making prices unstable and goods with low quality. For instance, in the past few years, the fertilizer market is almost always unsteady during the winter-spring rice season even though it is a fact well-known that demand for this product is usually very high at this time of the year. Despite the announcement of a ceiling price for urea fertilizer by the … [Read more...]

VietNamNet Bridge - DHL Supply Chain (DSC) has announced its plan to invest $13 million in Vietnam to expand its business scale here in anticipation of the Vietnam's logistics market opening next year. The sum of money would be used to train the labor force, which would increase the number of workers to 2,200 by 2015, and to increase the storehouse area from 91,000 square meters now to 141,000 square meters by 2015. DSC also plans to develop its truck fleet to 100 units by that time. A distribution center is being built in Bac Ninh province which covers an area of 10,000 square meters. The company's office in Hanoi would be set up in the near future. Explaining the decision to make heavy investment in the context of the gloomy economy, Jan Willem Winkerlhuizen, the group's CEO said Vietnam is really an attractive market with the logistics growth rate of 25 percent per annum. As Vietnam is a newly emerging market, the demand for outsourcing logistics services would also be … [Read more...]

Thailand's worst floods in decades may gradually be subsiding but ripples will be felt by companies and consumers for months to come, analysts say, underlining the fragility of the global supply chain. Thailand is a production hub for many firms, and severe flooding since October has left hundreds dead while hurting a wide range of industries, particularly the automotive and computer hard-disk drive (HDD) sectors. The consequences have been global, hitting companies such as personal computer maker Dell, HDD makers Toshiba and Western Digital, and auto giants Toyota and Ford. As with supply chain woes after Japan's March earthquake, analysts say the Thai disaster raises questions as to how well companies understand their supply networks for essential parts, and whether risks could be better managed. However, "companies are limited in what they can do because possessing extra inventory pressures corporate earnings and can heighten risk," said Masaki Nakamura, analyst at MM … [Read more...]

Vietnam’s main export markets like the United States, Europe, Japan and South Korea shrank significantly on reduced consumer demand, but garment, textile and fibre exports still reached US$17.2 billion in 2012. This was the fourth year in a row the garment and textile industry took the lead among the country’s exports, by revenue. The Vietnam Business Forum interviews Mr Le Tien Truong, Vice Chairman of the Vietnam Textile and Apparel Association and Deputy General Director of the Vietnam National Textile and Garment Group (Vinatex). Huong Ly reports. In 2012, Vietnam’s garment and textile was placed at higher priority by suppliers in the global garment - textile supply chain. So, while the market tended to narrow, weaker countries or bottom-listed countries were cut first by importers. As Vietnam’s garment and textile rose to the priority group, it still kept growth momentum in spite of the downward tendency, he said. What did the apparel and textile … [Read more...]

Local firms urged to improve supply chain management By Binh Nguyen - The Saigon Times Daily HCMC - Foreign experts have called for Vietnamese businesses to enhance their supply chain management (SCM) by applying new technology and solutions to improve their productivity and support their business expansion. William Leo, SCM director for Asia of Infor Co., said better supply chain management would help companies maximize the use of their resources including finance and human capital. As for the warehouse, better management means better control of labor and operating costs, space and inventory in the warehouse, Leo told the seminar organized by Vietnam Supply Chain Insight magazine and Infor in collaboration with IBM Vietnam and Intermec. He said an advanced warehouse management system resulted in a labor productivity increase of 15-40%, reduction of overtime hours, shipping accuracy improvement of 2-5% and inventory reduction of 5-20%. Oh Kheng Huat, general manager of Indo-Trans … [Read more...]

Supply chain crucial to hi-tech development: experts By Mong Binh - The Saigon Times Daily HCMC - Participants at a seminar in HCMC on Wednesday underscored the urgent need to develop strong supporting industries and local chain suppliers to provide strong backing for sustainable growth in the hi-tech sector in Vietnam. Nguyen Dinh Mai, head of the Saigon Hi-Tech Park (SHTP) Management Board, stressed strong supporting industries played an important role in the development of a hi-tech sector in Vietnam. Simon Leong, director of materials at Intel Products Vietnam in the SHTP in HCMC's District 9, pointed out the lack of local companies able to assemble and supply components and related services as among the major challenges for the hi-tech industry in Vietnam. Leong raised a concern that technology companies would pay higher costs if they have to import items and hire overseas firms to assemble technology products in Vietnam. Leong said Intel Products Vietnam would prefer to have as … [Read more...]

Increasing Export Value From Global Supply Chains By Son Nghia Vietnam’s export industry for many years has mainly focused on outsourcing products for foreign enterprises, and thus the economic efficiency is not high. To solve this year’s export growth problems, experts said exporting firms should be more involved in global supply chains. A director of an apparel firm in HCMC said his firm’s orders dropped by over 30% last year against the year before. However, the drop did not result from a shortage of customers but from a shortage of capital to buy materials and maintain its operations. “We had to suffer interest rates of 20-22% over last year, and thus we were forced to cancel many orders due to being unable to tolerate such high rates,” he said. Fortunately, in the second half of last year, the firm received an order to outsource one million jackets for a supermarket system of Wal-Mart, the world’s leading retailer, in North America. With this … [Read more...]

The Supply Chain Approach Should Be In Use By Dinh The Phong (*) So far in Vietnam, a vision in line with the supply chain has yet to find its deserving position in both State economic management and private business strategies Previously, Vietnam’s manufacturing and processing industries suffered from a blockage in their output, mainly because their cost prices are higher than those of rivals. Products in the automobile and electronic industries were examples. Recently, another blockage has emerged when input materials—for instance, fisheries and farm produce—become inaccessible to a certain extent to local manufacturers. With production materials inaccessible, the local supply chain is broken. The following cases exemplify the situation. In the supply chain of a healthy market, one or several conglomerates prevail. They are either manufacturing or trading firms, and are those who set the rules for the game in the entire chain. The uniform mechanism helps the whole … [Read more...]

by Quynh Hoa HCM CITY — Officials at a seminar yesterday in HCM City underscored the urgent need for supply chain development in several sectors, including electronics, textiles and garments, electronics, leather shoes, and automobile and motorbike manufacturing. At the seminar organised by the Ministry of Industry and Trade (MoIT) and the Multilateral Trade Assistance Project III (EU-Viet Nam MUTRAP III), Le Trieu Dung, deputy director general of the MoIT's Multilateral Trade Policy Department, said there was a need to improve the supply chain to increase added value for major export industries. … [Read more...]

Vietnamese firms are facing difficulties joining the global supply chain. Many multi-national corporations have come to Vietnam to set up global production supply chains in diverse industries like retail, logistic and electronics. However, few local businesses in Vietnam possess the ability to participate in these supply chains. For example, with the supporting industry a Japan External Trade Organization (JETRO) report shows that the localisation rate of Japanese companies in Vietnam was only 28.7 per cent, while the figures are 59.7 per cent for China, 53 per cent for Thailand and 39.3 per cent for Malaysia, respectively. Among the suppliers of spare parts and components for Honda Vietnam, there are 19 local Vietnamese suppliers and 59 foreign-invested companies. “That is why production costs in Vietnam are higher than those in countries with higher localisation rate and products made in Vietnam then became less competitive,” said JETRO director Yoshida … [Read more...]