45 Vietnamese companies join the Vietnam Supplier Pilot Program for multinational companies

On May 24th, 2018, in Hanoi, the Vietnam Industry Department – Ministry of Industry and Trade in collaboration with the International Financial Organization (IFC), a member of the World Bank Group launched the “Vietnam Supplier Development Program” to help Vietnamese businesses become suppliers for multinational companies, while allowing existing suppliers to expand their business and enhance added value.

Background of the birth of Vietnam Supplier Pilot Program

In fact, the multinational companies have been implementing many large investment projects in Vietnam, that has provided opportunities to expand the supply of domestic businesses. However, one of the obstacles for multinational companies is the lack of supporting industrial product suppliers, meeting the necessary global standards. For example, Honda Company accounts for about 60% of motorcycle production in Vietnam’s market, with 100 industrial enterprises in the auxiliary supply chain but only 23 are Vietnamese enterprises. Another example is in Samsung’s supply chain, the proportion of Vietnamese enterprises that are Samsung’s Tier I suppliers is 29, the level 2.3 supplier is about 200.

Pilot Program for Vietnamese Suppliers was started by IFC, a member of the World Bank Group, in collaboration with the Vietnam Industry Department – Ministry of Industry and Trade. The program was built from the report of the World Bank – Vietnam: strengthening the competitiveness and linkage of small and medium enterprises – Lessons learned in the country and internationally “

Objectives of the Program “Vietnam supplier development program will help domestic enterprises move up stages to create higher value added in the value chain, to be able to produce more complex products and edges. Better picture in the global supply chain, “said Deputy Minister of Industry and Trade – Do Thang Hai.

The expected results of the Pilot Program

In the next two years, the program will coordinate with 8 multinational companies (MNE) in the automotive, electronics, energy and household goods sectors, including Bosch, Canon, Datalogic, Denso, Ford, General Electric, Panasonic and Toyota. Invited MNEs expressed their interest in domestic supply development and the ability to support local businesses seeking business opportunities. 45 domestic enterprises have been selected to participate in the program according to the recommendations of MNE and professional organizations and associations.

“We are delighted to partner with local suppliers that are able to compete with suppliers from other countries. We hope this program will help us develop long-term business partnerships with potential partners and improve domestic supplies, “said Yamamoto Masahiro, Director of Strategic Planning, Panasonic Vietnam. Male share.

Implementation steps of the program

Step 1: Select 50 Vietnamese companies to join the Program. The program will conduct an assessment of the business performance and competitiveness of the participating providers. This review will review the overall business performance of the business to identify areas of improvement and specific actions to be taken to build supply capacity and improve competitiveness. Subsequently, 5 enterprises were excluded, while 45 domestic enterprises were selected to participate in the program at the recommendation of multinational companies and professional associations. At the end of May 2018, these enterprises will be evaluated for their business performance and competitiveness for the first time.

Step 2: The next six months will be considered a stage of gaining momentum for businesses to organize training courses, train, meet buyers as well as business connections. In order to be competitive and receive support, businesses must have a competitive strategy and clear management system; have product introduction and management process; Supply chain management based on technical factors.

Step 3: At the beginning of 2019, these businesses will undergo a second business review process; This is the basis to select 25 businesses that receive more long-term support with their own advisers depending on the particular business. Advisory groups also play an important role in connecting domestic suppliers with demanded FDI enterprises.

Productivity and Quality Office