Digital transformation, application of data management systemEnhancing the global competitiveness of domestic supporting industry enterprises

Vietnam is facing a rare opportunity as the global supply chain shifts dramatically. This is a golden time for domestic supporting industry enterprises to transform and participate more deeply in the production of components and raw materials, instead of just stopping at the assembly stage.

However, to take advantage of this opportunity, Vietnam's supporting industry still faces many systemic barriers, requiring continuous improvement from policies to the internal capacity of enterprises because after nearly 20 years of development, the policy system on supporting industry has been relatively complete, but the connection between FDI enterprises and domestic enterprises is still loose, not forming a stable supply chain.

According to a survey conducted by the Vietnam Industry Support Alliance (VISA) with 300 domestic enterprises and 40 international buyers, the biggest barriers for Vietnamese enterprises are uncompetitive prices and differences in quality standards. In fact, 88% of supporting industry enterprises in Vietnam are micro, small and medium-sized. Only about 10% have achieved the level of automation, and only 20% have ISO certification or equivalent certifications.

The connection between FDI enterprises and domestic enterprises is still loose, and a stable supply chain has not yet been formed. Photo: PV

This is a worrying situation, especially when compared to the huge demand of the market. Currently, the domestic demand for components and spare parts is only met by about 10%, causing the overall localization rate to only reach 15-20%. In some key industries such as automobiles, this figure only stops at 5-20%. Even at the macro level, the country's localization rate is only about 36.6%, and in fields such as electronics and components, it is still below 30%.

Experts say that the barrier lies not only in production capacity but also in the lack of transparent data and cooperation trust. A representative of Digiwin Vietnam Software Joint Stock Company said that international buyers increasingly require transparency in the entire supply chain, from raw materials, inventory, quality to transaction records. Manual management using Excel or documents is no longer convincing enough and has many potential risks of errors. To build trust, Vietnamese businesses need to digitally transform, apply data management systems and smart factory models.

Despite many challenges, experts say opportunities are still wide open for Vietnamese businesses. The Covid-19 pandemic has disrupted many global supply chains, making multinational corporations realize the urgency of finding local sources of supply. This is a strong motivation for FDI buyers to seek reliable partners in Vietnam. With the support of the State and organizations, businesses are being supported to improve their capacity.

Currently, the country has about 2,000 supporting industry enterprises, of which Hanoi alone has more than 900 enterprises. Notably, there are more than 320 enterprises in Hanoi that have met international standards and are capable of participating in the production network of multinational corporations. The group of components and spare parts production is playing a key role, providing products for most major manufacturing industries such as automobiles, motorbikes, mechanics, and electronics.

Hanoi has been promoting the development of supporting industries, an important factor in improving the competitiveness of the economy . The city government has implemented Resolution No. 115/NQ-CP dated August 6, 2020 of the Government on solutions to promote the development of supporting industries, and at the same time implemented the Hanoi Supporting Industry Development Program for the period 2020-2025. According to the development orientation to 2030, Hanoi strives to become a city with modern, high-tech and green industry. To achieve this goal, the city continues to direct competent agencies to deploy solutions to support businesses to improve their competitiveness, promote investment and trade, and develop industrial parks and industrial clusters. Domestic enterprises are encouraged to participate in international supply chains through connection programs and investment cooperation with foreign partners.

According to the development orientation until 2030, Hanoi strives to become a city with modern, high-tech and green industry. To achieve this goal, the City continues to direct competent agencies to deploy solutions to support businesses to improve their competitiveness, promote investment and trade, and develop industrial parks and industrial clusters.

Domestic enterprises are encouraged to participate in international supply chains through connection programs and investment cooperation with foreign partners.

However, to fully exploit the opportunity, Ms. Tran Thanh Hoa, Head of Trade Connection, VISA, emphasized that Vietnamese enterprises need comprehensive support in operations management, marketing, sales and quality management. These are key factors to meet the strict standards of FDI corporations. VISA, together with associations and management agencies, is committed to working together to increase the localization rate and global competitiveness of enterprises.

A representative of Digiwin Vietnam Software Joint Stock Company believes that in order for the supporting industry to truly become the foundation for the industrialization and modernization process, the State needs to continue to improve its support policies. When barriers to price, quality and trust are removed, Vietnamese enterprises can participate deeply and sustainably in the global supply chain, affirming their position in the world economy.

Source: https://daibieunhandan.vn/chuyen-doi-so-ung-dung-he-thong-quan-tri-du-lieu-nang-cao-suc-canh-tranh-toan-cau-cua-cac-doanh-nghiep-cong-nghiep-ho-tro-trong-nuoc-10387681.html