VEAM: Confidently participate in the global supply chain

As one of the first supporting industry (DN) enterprises in Vietnam to step by step participate in the global supply chain, the experience that Mr. Ngo Van Tuyen – Acting General Director of Machinery Corporation Motivation and Agricultural Machinery Vietnam-CTCP (VEAM) – sharing that is to apply comprehensive solutions to ensure QCD requirements (quality, price, delivery).

To become a link in the global supply chain, in your opinion, what are the necessary and sufficient factors of Vietnamese enterprises?

Vietnamese products that want to compete must meet QCD requirements. To ensure quality, technical factors, technology and management systems must meet supplier requirements. Good management and application of diverse tools ensure optimal factors of the production system such as human resources, machinery, materials, technology, and management; Continuous improvement will have competitive costs and satisfying delivery.

20 years ago, many Vietnamese enterprises were still unfamiliar with the quality management system like ISO9000. Currently, the system standards such as IS14000, IS50000, IATF16949; TQM, TPM, Monotsukuri, Kaizen, 5S, Six-sigma tools are no stranger. The problem now requires well-trained and truly capable enterprise administrators to operate businesses with modern management elements. Enterprises with state capital are really weak in this regard, many managers choose emotional, subjective discretion of the decision maker without paying attention to the actual capacity.

So, where is the “bottleneck” of Vietnamese enterprises today, sir? What should businesses do to overcome these “bottlenecks”?

To be able to join the supply chain, you must meet competitive QCD standards. However, for domestic products, whether Vietnamese enterprises are given the opportunity or not depends on the end product manufacturer. Previous supply relationships easily entailed foreign suppliers to invest in Vietnam to manufacture components. These investments have many incentives compared to domestic manufacturers, so competition always has an advantage.

Another problem for domestic enterprises, many products have technical and manufacturing technology that cannot be developed domestically, cannot buy technology, so they lose their supply opportunities. In this case, businesses need to find partners and have a form of cooperation to produce.

Can you share some of VEAM’s experiences in becoming a supplier to multinational companies?

Currently, many companies with VEAM capital have participated in the supply chain supply domestic market as well as export. To achieve this result, the company has had a process of changing management, human resource development, technical investment, meeting the standards for suppliers of each specific product in the past 20 years. VEAM has promptly grasped the opportunity to develop products in the domestic market as well as the ordering trend of global suppliers. VEAM is successful both in the field of embryo production as well as in the machining of precision products. Setting goals and continually improving is a necessary condition to be able to meet the competitive requirements that customers always set.

Currently, the state has many policies to support industrial support enterprises. In your opinion, how have these policies affected businesses? What factors do businesses need to improve their competitiveness?

The term SI is coined to illustrate the need to build a supply chain for each type of product. Enterprises participating in the supply chain have domestic and foreign enterprises, the support must create an equal environment. Foreign enterprises are supported to encourage investment, if they give priority to foreign suppliers and these enterprises also enjoy preferential policies, Vietnamese enterprises have no chance.

Relevant policies on access to capital or preferential land lease, if any, also partly support businesses, but the reality is not the deciding factor. The State should focus on improving the general business environment so that businesses can operate smoothly and reduce costs rather than separate policies. For products such as the automobile industry, if localization is encouraged, there should be a special consumption tax policy so that the manufacture of components becomes more competitive when the market is too small.

In a competitive environment, Vietnamese enterprises want to participate in the supply chain of supporting industries or can survive even when they have entered the market, their competitiveness must mainly come from internal resources. Policy support is only a catalyst or is needed in the difficult times of the macroeconomic situation. Governance and people are fundamental factors. Engineering and technology are of decisive significance only when chosen correctly. Competition is a continuous process and there is no concept of satisfaction.

Thank you Sir!

Productivity and Quality Office