Strategies for Manufacturing Success in Vietnam amidst Pandemic Challenges

Kenneth Patrick Fabella is a seasoned Engineering Manager with a proven track record in the consumer goods industry, showcasing ex- pertise in engineering and production management, HACCP, manu- facturing, and product development. Possessing a strong educational background, he holds a Bachelor of Science in Electronic and Communi- cation Engineering from the Technological Institute of the Philippines and a Bachelor of Science in Education with a focus on Sciences, Mathematics, and Human Behavior from the National Teachers College in Manila, Philippines.

In conversation with Prisila, Correspondent, Asia Business Outlook Magazine Kenneth shares his insights on the main hurdles and prospects faced by manufacturing enterprises in Vietnam amidst the pandemic, the intricacies of tax and customs regulations, the condition of infrastructure and logistics in the country, ensuring the safety and well-being of employees, and the existence of supportive services or incentives for foreign manufacturing firms during the on-going pandemic.

Business Injection Process and Regulatory Landscape

Vietnam has solidified its significant presence in the global manufacturing sector, serving as a vital component in international supply chains and experiencing notable industrial growth. Aligning with global standards, Vietnam adheres to regular export-import regulations, utilizing Harmonized System (HS) codes for the organized categorization of products. A notable distinction emerges in Vietnam's business landscape through age-based restrictions on machinery imports, allowing acceptance solely for machines under 10 years old. This feature underscores the nation's emphasis on technological vitality and modernization. This specificity emphasizes Vietnam's commitment to technological advancement while prioritizing environmental sustainability, showcasing a harmonious approach to industrial development.

The local logistics sector in Vietnam faced a tumultuous period during the pandemic, experiencing disruptions that reverberated through 2020 and 2021, challenging the industry's normal operations and efficiency. Extended lead times became the new norm, causing a significant impact on transportation costs within the local logistics sector in Vietnam. The international shipping industry witnessed a remarkable fluctuation in container prices, surging to $10,000 per container during the peak of the pandemic and eventually stabilizing at $1,700. This transformative journey underscores the industry's resilience and adaptability, exemplifying its capacity to navigate challenges and readjust in the post-crisis landscape. It illuminates the sector's dynamic response to adversity, showcasing its enduring strength and ability to thrive amidst change.

Pandemic-Driven Business Realities

The global health crisis inflicted widespread damage on businesses across various sectors in Vietnam, leading to a substantial 50 percent downturn in numerous industries.

Companies were confronted with an imminent threat, highlighting the imperative for strategic resource management and adaptive workforce strategies. The ability to sustain a robust financial cash flow became pivotal for business survival, prompting a significant emphasis on diversification. Companies found themselves compelled to reassess and broaden their operations to mitigate the impact of unforeseen market disruptions. Quality assurance assumed a central role during the pandemic, demanding a nuanced balance between adherence to government regulations and internal company policies. Particularly in the realm of food safety, stringent measures were implemented to fortify supply chains. The challenges inherent in ensuring the quality of goods were underscored, particularly in the face of market closures and permit requirements impeding the seamless flow of goods. The increased cost of goods during the pandemic, surging to 15 percent of regular purchases, emphasized the strain on resources.

The pandemic has functioned as a stern instructor, offering crucial lessons for businesses both in Vietnam and on a broader scale. The concept of resource readiness took center stage, highlighting the significance of maintaining a strategic inventory and establishing resilient supply chains. Financial adaptability became paramount, with companies boasting robust cash flows demonstrating a more effective ability to weather the storm. The call for diversification echoed consistently, encouraging businesses to explore various avenues for sustained growth. Employee welfare emerged as a pivotal factor in ensuring business continuity. With the pandemic prompting significant migrations and disruptions, securing a skilled workforce became essential for operational resilience. Companies that proactively invested in employee benefits and adjusted to the evolving needs of their workforce were more successful in maintaining operational continuity.

"The pandemic has underscored the imperative for businesses to strategically manage resources, diversify operations, and prioritize employee welfare, offering valuable lessons applicable globally"

Vietnam's Global Business Resilience

Amid the uncertainties on a global scale, Vietnam's industrial resilience emerges as a powerful testament to its strength. The complexities inherent in the country's business injection process reflect a nuanced harmony between regulatory frameworks and the ever-changing dynamics of the global economy. Businesses grapple with multifaceted challenges, navigating intricate logistics, ensuring post-pandemic survival, and upholding unwavering product quality. Despite these hurdles, the insights garnered—from adept resource management to prioritizing employee well-being—serve as a valuable guide. These lessons extend beyond Vietnam, providing businesses worldwide with a navigational tool as they traverse the continually evolving international business landscape.

Vietnam stands as a global inspiration, skilfully balancing economic dynamics amidst uncertainty. Its ability to navigate complexity serves as a guide for enterprises worldwide, offering a blueprint for enduring success in the unpredictable business landscape. Vietnam's industrial resilience symbolizes strength and functions as a beacon, directing businesses toward sustained prosperity in the face of uncertainties. This delicate equilibrium positions Vietnam as a model for global resilience, showcasing adaptability and fortitude essential for enterprises aiming for lasting success amid the challenges of the ever-evolving global business environment.