Unveiling Vietnam’s Potential: A Vibrant Hub for Contract Manufacturing and Global Supply Chains

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Vietnam’s Contract Manufacturing: The Perks!

Have you ever considered Vietnam as the next go-to destination for contract manufacturing (CM)? Well, it’s time to give this hidden gem a second look! Vietnam is making waves alongside other Southeast Asian countries and Mexico, as a dynamic and competitive alternative for outsourcing manufacturing needs. European and American companies are catching on, recognizing Vietnam as a fantastic location to expand and diversify their offshore supply chains. As our global demand for manufacturing grows, let’s dive into the exciting benefits of Vietnam’s blossoming CM landscape and explore strategies to overcome potential challenges to make the most out of this opportunity.

The Potential Challenges of Contract Manufacturing in Vietnam

While Vietnam’s manufacturing and supply chain management options continue to develop, it’s essential to be aware of potential challenges when considering a move or diversification into the region:    

 These challenges can be managed and mitigated with some strategic thinking:

Training and management systems: Companies new to Vietnam should develop targeted training plans for junior staff and implement robust processes and management systems to ensure they meet their production goals.
Cooperation with local suppliers: Foreign entities that collaborate with and support local suppliers in improving their technology can create mutually beneficial relationships, fostering growth and better service for both parties.
Thinking outside the box: Engaging smaller manufacturers and bringing in the right expertise for optimization can be a winning formula for those willing to explore unconventional solutions.

Success Stories and Expert Support

Over the past several years, SCRG Vietnam has been supporting US and EU customers by helping them navigate these challenges and optimize their production and supply chains within Vietnam. Through our expertise in Project Management, NPI, Quality Control, DFM, MPM, TE, STM & Supplier Optimization, and we’ve seen incredible success stories unfold that focus on creating wins for our customers.

For example, SCRG assisted an EU customer seeking a new supplier in Vietnam to complement their existing suppliers in China. They faced a significant challenge with their low target price for a complex product that many large local suppliers were unwilling to take on. However, SCRG recommending they consider smaller suppliers with a proven track record in handling similar products, coupled with top-notch technical talent and robust engineering teams. The result? Not only did the customer successfully find a supplier, but they also outperformed their existing one by producing a product with over double the expected life cycle! Our dedicated SCRG team stepped in to address the smaller manufacturer’s gaps, such as refining their management system. We also shared our expertise in optimizing the use of older equipment, implementing process improvements, and ensuring top-quality control. That’s what we call a win-win situation!

Vietnam presents a world of opportunities for investors and local suppliers to collaborate and succeed. By keeping an open mind, embracing unconventional solutions, and leveraging experienced support, the sky’s the limit for the future of the global supply chain in Vietnam.

Have you or your company thought about expanding or relocating your production and supply chain? What role should the Vietnamese government play in fostering a supportive environment for investors and suppliers? Share your thoughts in the comments below!

Duy Trung Tran

Duy Trung Tran

Managing Director, Vietnam at SCRG

Author: Tran, Duy Trung (Mr.), Managing Director, Vietnam at SCRG with extensive experience in helping customers navigate the complexities of offshore CM/vendor management. Tran is passionate about finding innovative solutions to supply chain challenges and delivering value to customers.

Connect with Trung on LinkedIn.

Supply Chain Resource Group (SCRG) is a global market leader offering Strategic Workforce Solutions to some of the world’s most exciting brands.  SCRG’s sweet spot is bringing highly skilled engineering talent to solve complex offshore manufacturing challenges. Our clients are OEM’s producing intricate technology-led products that use our vendor managed solutions to increase speed to market and manage costs. Whether you need to audit your existing suppliers, find new ones, manage logistics, understand Cost Downs, DfX or FMEA, we can help.  Connect with the company that has been reinventing supply chains for household name brands since 2008.  

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