The application of modern digital technologies would help local firms increase productivity, reduce costs and risks, especially in the Fourth Industrial Revolution.

And this would also help improve their competitiveness and position in the global supply chains.

That was the message delivered at a forum in Ha Noi on Tuesday to help businesses optimise supply chains and improve competitiveness.

The event was held by the Institute for Brand and Competitiveness Strategy (BCSI) in partnership with Portland State University in the US.

Speaking at the forum, president of the BCSI Council Nguyen Van Nam said the concept of global supply chains is not new to Vietnamese companies.

Since Viet Nam’s shift from a centrally planned to market economy three decades ago, the country has set up trade relations with more than 180 countries and territories and drawn investment from more than 100 economies.

“However, most firms only participate in the secondary supply chain, so the products they make don’t have high added value,” he said.

About 21 per cent of small- and medium-sized enterprises in Viet Nam joined the global supply chain while the percentages in Thailand and Malaysia are 30 per cent and 46 per cent, respectively.

This means Vietnamese enterprises are less likely to benefit from the spill-over effects of FDI firms through the technology transfer, know-how and management skills, he added.

Sharing the ideas, Le Ngoc Quang, director of BDO Viet Nam Auditing Company Limited, said each product needed a “thorny journey” to the end-customers.

The journey is a collaboration of different segments from material suppliers to factories, transport units, wharfs to distribution centres, wholesale and retail shops.

This is a close process or so-called supply chain. The chain is linked to all businesses’ activities.

Currently, Vietnamese companies are facing with difficulties of co-operation among departments and weak administrative network. The weaknesses have been reasons for low productivity, high fee of inventory, delayed delivery and high inventory, he said.

“Better supply chain management would help businesses maximise effectiveness, thus increasing profit and competitiveness,” he added.

Jay Fortenberry, lecturer at Portland State University and chairman of the Fortenberry Group agreed, saying that to optimise supply chains and improve competitiveness, Vietnamese businesses must better manage supply chain costs and customer demand.

It’s crucial that enterprises are in control of their customer services, the internationally-recognised leader in supply chain management noted.

Daniel Wong, a lecturer at Portland State University, said Vietnamese firms are pioneers in leveraging the Fourth Industrial Revolution.

They have been applying advanced technology and IT solutions, and that means they are on the right track, he noted. Besides these strengths, Vietnamese entrepreneurs still have many “gaps”, especially in terms of knowledge, as they lack specialists in their businesses.

They should enhance management skills to better manage their companies, Wong added. Wong used to serve as Vice President of Logistics and Supply Chain Management at North Pacific and Director of Supply Chain process improvement at Longview Fibre Company in Longview, Washington, the US. — VNS