A Breakthrough Opportunity for Vietnam's Supporting Industry | Supply Source

Vietnam's supporting industry is facing a major paradox: despite having over 6,000 active enterprises, it meets only about 10% of the domestic demand for components and spare parts. This reality poses a significant barrier to the economy's self-reliance.

The majority of Vietnamese supporting industry enterprises remain in a "modest zone," grappling with inherent challenges:

• Small Scale: Nearly 88% are small and medium-sized enterprises (SMEs).

• Outdated Technology: Many still use old equipment and lack automation.

• Weak Management Capacity: A lack of international standards like ISO and modern management models (Lean, 5S, TQM).

• Alarming Localization Rates: Textile-garment and footwear (45-50%), mechanical engineering (15-20%), and especially automobile assembly at a mere 5-20%.

To break through, the supporting industry requires a comprehensive transformation in technology, management, and deep integration into the global supply chain.

Key Solutions to Propel Vietnam's Supporting Industry Forward

To resolve these bottlenecks, a synchronized effort is needed, from macroeconomic policies to the self-improvement efforts of each enterprise.

1. Attract Selective FDI and Enhance Connectivity Instead of widespread FDI attraction, Vietnam needs to focus on high-tech projects willing to cooperate and transfer technology to domestic enterprises. Creating an "ecosystem" connecting FDI enterprises with local suppliers is key to:

• Transferring technology, production processes, and quality standards.

• Opening opportunities for Vietnamese businesses to participate more deeply in the global supply chain.

2. Leverage Strong Government Support Policies Support policies must be practical and accessible. For instance, Decree 205/2025/ND-CP (hypothetical) has significantly expanded the support framework for the supporting industry, focusing on practical activities:

• Up to 70% cost support for market promotion and technology transfer.

• Up to 50% cost support for product testing and the adoption of international quality standards.

3. Enhance Internal Capabilities – The Key to Corporate Self-Reliance This is the most critical factor determining the survival and growth of businesses. Top priorities include:

• Invest in Technological Innovation: Proactively apply automation, robotics, and modern production lines.

• Adopt Advanced Management Models: Implement Lean Manufacturing, 5S, and TQM to optimize operations and reduce waste.

• Develop a High-Quality Workforce: Focus on training skilled engineers and technical workers.

• Standardize Products: Achieve international certifications to meet the stringent requirements of multinational corporations.

4. Build a Collaborative Ecosystem and Public-Private Partnerships A single enterprise can hardly create significant change. Stronger collaboration is needed through:

• Public-Private Partnership (PPP) Models: The state and businesses jointly develop industry programs, with guidance from lead-chain enterprises.

• Develop Specialized Supporting Industry Clusters: Create an environment for businesses to grow together, share resources, and optimize logistics costs.

Supply Source Industrial Consulting Vietnam: Bridging Local Enterprises and the Global Supply Chain

In this context, the role of professional consulting firms becomes crucial. With experience as a supply chain intermediary, Supply Source Industrial Consulting Vietnam can act as an effective bridge to:

• Assess the actual capabilities of small and medium-sized manufacturers in Vietnam.

• Provide consulting and technical support to help businesses improve processes and meet necessary standards.

• Directly connect qualified Vietnamese enterprises with large FDI corporations seeking suppliers.

Our goal is to accompany Vietnamese businesses on their journey to enhance their capabilities, conquer international standards, and confidently enter the global arena.

Conclusion: The Future Lies in the Hands of Vietnamese Enterprises

The opportunity for Vietnam's supporting industry to grow and break out of its "modest zone" is immense. However, success will only come when businesses proactively innovate, strengthen partnerships, and effectively leverage government support policies. The road ahead is challenging but wide open for those ready to transform.

Source: VnEconomy – Cooperation and connection to bring Vietnam's supporting industry out of the "modest zone" https://vneconomy.vn/hop-tac-ket-noi-dua-cong-nghiep-ho-tro-viet-nam-ra-khoi-vung-khiem-ton.htm

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