Optimising your supply chain in Vietnam: a strategic guide for French companies
Vietnam is a strategic choice for French companies looking to diversify their supply chain. With competitive advantages such as low labour costs, high production quality and a stable political environment, Vietnam offers a unique opportunity to optimise your foreign sourcing strategy. Nhi Nguyen Dinh Hoai, Sourcing Key Account Manager at Source of Asia SOA, provides practical advice on how to develop a sourcing strategy in Vietnam that is tailored to the specific needs of French companies.
Setting up a sourcing chain in Vietnam
Identification and selection of suppliers
The first step in establishing an effective supply chain in Vietnam is to identify reliable suppliers who can meet the required quality and production standards. Potential suppliers’ production capacity and processes, financial stability and compliance with international standards need to be assessed. This includes checking or adjusting the production process in collaboration with the selected supplier. The next step is to validate that the quality of the products meets the requirements.
Rigorous quality control
Once potential suppliers have been identified, the implementation of a rigorous quality control system is essential. Supply chain control is carried out in three main phases: development, order management and logistics. It includes regular visits to factories for in-process inspections, with samples being analysed at every stage. Full audits are carried out to check that every aspect of production and logistics complies with defined specifications. These inspections help to prevent quality problems before finished products leave the factory, reducing the risk of additional costs associated with returns or non-conformance.
Building a lasting relationship
Building a lasting relationship with your supplier is critical to ensuring the sustainability of your supply chain in Vietnam and therefore the effectiveness of your international development strategy.
The key to a successful partnership with Vietnamese suppliers is mutual trust and respect. To ensure a successful partnership, relying on a local expert such as Source of Asia (SOA) can be invaluable, from contract negotiation to product management and quality control. By using a local intermediary such as Source of Asia SOA, companies can facilitate management and communication and build a relationship of trust with their suppliers by overcoming cultural and language differences. This local support ensures a smooth, ongoing relationship.
The advantages of sourcing in Vietnam
Developed infrastructure and trade agreements to facilitate trade
Vietnam benefits from free trade agreements with many countries and regions around the world, including the European Union. This reduces customs barriers and facilitates access to key Asian markets. These agreements, such as the EVFTA (EU-Vietnam Free Trade Agreement), also offer tariff advantages that improve the competitiveness of Vietnamese products on the European market. In 2023, Vietnam’s furniture exports alone were valued at around $5 billion to the EU and $7 billion to the US, demonstrating its capacity as a major player in international markets.
In addition, the country has a strategic geographical position in Asia and a government policy favourable to foreign investment, which encourages the establishment of new sourcing strategies for European companies.
Case study: factory audit for a French industrial company in Vietnam
With the support of an expert like Source of Asia SOA, you can take full advantage of the opportunities Vietnam offers to optimise your sourcing strategy while minimising the challenges associated with entering a new market. Source of Asia recently carried out a production line audit for a French industrial equipment company that was experiencing delivery delays and quality issues. We have been working with the company for the past 3 years and have increased the number of suppliers from 1 to 3. We have also enabled the company to develop a robust supply chain, ensuring that the products it manufactures meet strict quality and performance standards. This success in Vietnam has encouraged the company to expand into other ASEAN markets, China and India.
Conclusion
Vietnam is a strategic country for optimising the sourcing strategy of French and European companies looking to expand internationally. Source of Asia, as a reliable partner for the development of supply chains in Vietnam, provides comprehensive support to customers, from supplier selection to quality control and supplier relationship management. This support at every stage ensures that French companies have a secure base and a lasting presence to develop a successful sourcing strategy in Vietnam.
You can also watch the interview with Nhi Nguyen Dinh Hoai on our Youtube channel:
