The manufacturing industry has been the driving force for Vietnam’s overall economic growth. According to the Ministry of Industry and Trade, the manufacturing sector accounted for 16.5% GDP in 2019. In terms of GDP contribution, statistics from 2010 up to now show that the structure of the Vietnamese economy is undergoing a positive transition towards industrialization with a gradually declining growth rate in agriculture and increasing growth in manufacturing and services.
The Vietnamese government also envisions the country to transition to a more digitalized economy and escape the middle-income trap. They are implementing wide-reaching Industry 4.0 policies to jump start the modernisation of Vietnam’s major industries and develop new ones. With the vision and support from the government, enterprises in the manufacturing industry need to grasp the opportunities to surge forward with the new digital tools available. However, this transformation will definitely not come without any challenges.
The second session of Asia IoT Business Platform Insights (AIBP) Vietnam series on 3 November brings together perspectives from local industry leaders to discuss collaboration opportunities and challenges to overcome in the context of the Fourth Industrial Revolution to achieve the goal of building Vietnam’s digital economy.
Part I: Enterprise Innovation Award Finalist Presentations
The session started off with three presentations from Vietnam Enterprise Innovation Award Finalists 2020 including PetroVietnam Camau Fertilizer Company (PVCFC), Phu My 3 BOT Power (PM3), and Song Ba Joint Stock Company (SBA).
Mr. Vo Chanh Ngu, IT Director of PVCFC which is a fertilizer manufacturer shared a presentation on how PVCFC has incorporate digital solutions in their business processes and operations. Having a Distribution Management System, a CRM Cloud Omni-Channel and a Mobile Application has allowed PVCFC to increase business efficiency and engage their customers better through various platforms.
From 2016 to 2019, the company has also upgraded technology implementation into more areas of the business, which includes the use of data analytics and business intelligence that allows higher management to easily gain insights into the operation of the business.
PM3 also presented a good case study on digital transformation in the utilities sector. PM3 is the first foreign-invested BOT (Built-Operate-Transfer) Power Project in Vietnam with Sembcorp Utilities Corp. (Singapore) as one of the investors. Facing challenges with the traditional ways of management and operations at the corporate level due to obsolete management systems, PM3’s management team took the initiatives for digital transformation with the support from Sembcorp’s management.
The session continued with an interesting case study from another power company – SBA which is a Vietnam-based company hydropower production company. SBA presented on the application of digital solutions in regulating flood discharge from irrigation and hydropower reservoirs in Vietnam. The company manufactures their own automated water level measurement equipment and applies software and technology solutions to collect and analyse data that helps with flood discharge management.
Part II: Industrial IoT – Strategy & Roadmap
After the three presentations, part II of the session focused more on digital transformation strategy and roadmap to drive the Fourth Industrial Revolution. Ms. Do Thi Thuy Huong, Executive Board Member of the Vietnam Electronics Industries Association (VEIA) shared how digital transformation is especially important for the Electronics Industry which is one of the major export industries of Vietnam. Digitalisation in supply chain for this industry is essential to ensure business continuity and minimise supply chain disruption, especially during this unprecedented time.
According to Raul Samaniego, SEA Supply Chain and Manufacturing Director, AJE Group, enterprises should adopt hybrid models for digital transformation. He further explained that this type of model should not only look at technology adoption but also focus on skill upgrade for employees so that they are able to operate the digital tools efficiently. Besides reviewing internal processes, enterprises also need to consider customers’ feedback to work on enhancing their experience. High customer satisfaction can be a great competitive advantage for the firm. Companies’ leaders also need to play an active role in advocating for digital transformation. He also emphasized on the importance of considering ROI when coming up with a strategic digital transformation roadmap.
Raul’s viewpoint was also echoed by Dr. Pham Tuan Anh, CIO of Becamex IDC – a leading developer of industrial, urban and transportation infrastructure in Vietnam. Dr. Tuan Anh further emphasized the commitment from the management that is key in pushing transformation forward. Learning from experiences, he realises the important role of transformation in adding values and creating new business models for the firm. He is also very thrilled about the newly launched Smart Manufacturing Innovation Center of Becamex – which facilitates partnerships with different solution providers in bringing smart factory solutions for companies in the territory of their industrial parks.
In addition, Mr. Yoon Cho Yong, Regional Site Director of Sembcorp brought up the significance of IT & OT integration to drive transformation and intelligence insights across units. The issue of building a centralized system to manage operational information across different units shared by him was also agreed upon by most panelists.
Despite certain challenges faced, EVNCPC has revised their strategy to accelerate digitalisation and complete the roadmap by 2022, instead of 2025 as the original target. Ms. Le Thi Phuong Cam, Head of Planning Department of EVNCPC shared that the firm is currently applying state-of-the-art technologies such as AI and big data in their business operations. AI will be used to verify and track information provided by customers, which allows EVNCPC to serve their customers better. In the near future, the company is also planning to use blockchain in electricity trading activities and in household energy management to help their customers manage household electricity usage more efficiently.
Definitely, we have seen certain progresses among the local enterprises in catching up with the Fourth Industrial Revolution. Nonetheless, more work needs to be done from both the management and employees to ensure that local enterprises are able to overcome challenges faced and reap the full benefits of digital transformation.
We will continue the conversations with industry leaders in ASEAN to understand the pain points and challenges that they face in technology adoption. Together, we can explore how to create value for their organisations, and reimagine new businesses.
Drop us a note at firstname.lastname@example.org if you are interested to discuss the development of enterprise digitalisation in Vietnam and ASEAN.
5 November 2020