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Broken supply chain: How to be ready to catch the wave?

27/10/2021 10:54 AM
The Covid-19 pandemic lasting for more than 20 months, has severely affected supply chains, disrupting trade circuits and large-scale production and business activities. The reshaping of the supply chain poses challenges for many Vietnamese enterprises

Covid-19 pandemic causes many fractures

At the online event themed "Supply Chain Innovation" organized by Forbes Vietnam Live with the participation of Mr. Vu Duc Giang - Chairman of the Vietnam Textile and Apparel Association (VITAS), Mr. Nguyen Hai Minh - Vice Chairman of the Association of European enterprises in Vietnam, Ms. Dang Minh Phuong - President of the Ho Chi Minh City Logistic Association, the speakers pointed out the real  difficulties that Vietnamese enterprises face before the disruption of the supply chain.

Mr. Vu Duc Giang - Chairman of VITAS said that although in the first 9 months of the year, the export of the textile and garment industry still increased by 13% over the same period, but the industry was still affected by Covid-19, typically with 5 major faults.

Those faults including input materials made many production factories closed, leading to a break in the production line, along with obstacles in customs procedures, difficult goods circulation and disruption in transportation.

These faults cause enterprises to face difficulties in production and business, leading to cash flow disruptions, no cash flow to reinvest in production.

"If the Government does not have appropriate policies and measures to promptly adapt, not only the supply chain but also the economy will continue to be broken," Mr. Giang forecasts.

Agreeing with Mr. Giang's point of view, Mr. Nguyen Hai Minh - Vice President of the European Business Association in Vietnam also said that the disruption of the supply chain leads to 18% of foreign FDI enterprises in Vietnam to move to other countries. Although the capital withdrawal has not happened yet, this also contributes to the impact on the trade & export activitities.

The reason for these faults is that Vietnamese enterprises are still used to the old management style, so when something unexpected happens, they are still confused and have not taken the initiative to prepare for the risks. .

In addition, although there are currently a number of domestic and foreign logistics units in Vietnam, there is no close connection between enterprises, factories have demand but do not know. Where to go to find a shipping company...

How to change position?

According to the speakers, the reality shows that the Government is trying to find solutions to gradually restore economic growth in parallel with controlling the pandemic.

Enterprises are also gradually improving the immediate situation to maintain production, ensure jobs for employees and seek solutions to restructure production for longer-term goals.

Besides, the scale of Vietnam's international trade has increased rapidly, leading to new needs and new logistics trends.

To increase the ability to cope with continuous fluctuations, businesses need to apply logistics software in supply chain management. In particular, it will be practical if enterprises can create a digital management system that can connect industries together.

At the same time, the speakers said that enterprises also need to actively adapt, innovate thinking, apply new technologies to digital transformation in operational processes, upgrade business models in parallel with improving the quality of human resources and expanding the network of partners, diversify the supply.

In addition, state management agencies should overcome "fear", have a smooth coordination with policies to facilitate businesses, avoid creating "bottlenecks".

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