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Only 21% of local SMEs involved in global supply chains

Released at: 15:58, 22/08/2018

Only 21% of local SMEs involved in global supply chains

Photo: BCSI

Forum hears of low participation by small and medium-sized enterprises in Vietnam in global supply chains.

by My Van

Only 21 per cent of small and medium-sized enterprises (SMEs) in Vietnam are part of global supply chains, the “Supply Chain Optimization & Competitive Strategy for Enterprises” forum, held by the Institute for Brand & Competitiveness Strategy (BCSI) on August 21 in Hanoi, heard.

The figure is over 30 per cent in Thailand and 46 per cent in Malaysia, so Vietnamese enterprises appear to be gaining little benefit from the spillover effects of FDI in technology transfer, knowledge, and management skills.

Economic experts at the forum spoke of approaches to customers and markets, inventory management and operational capital, and identifying and reducing the risks in supply chains.

Globalization, the flow of commerce, and the increasingly favorable investment associated with competitive advantage and connectivity have created global manufacturing and supply chains. The journey of a product is a combination of many stages, from suppliers of raw materials to processing plants around the world and transportation units to distribution centers, wholesalers, and retailers.

Global supply chains have become familiar to Vietnamese exporters since the country moved towards a market economy and international integration 30 years ago. Most Vietnamese enterprises, however, only participate in secondary supply chains with low value added.

According to Dr. Nguyen Van Nam, Chairman of BSCI, one of the main weaknesses is that supply chains have not developed completely or synchronously and do not meet global demand.

Analysis submitted to the forum showed that logistics costs in Vietnam are double or triple those of countries with similar circumstances. At two sessions - “Supply Chain Management in the New Paradigm and Industrial Revolution 4.0” and “Supply Chain Optimization and Competitive Strategy for Enterprises” - speakers, delegates, and businesses addressed the difficulties and bottlenecks in the implementation of supply chains in Vietnam.

Experts also answered questions from businesses on customer and market management and minimizing risks in supply chains, among other matters.

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