Samsung continues to support Vietnamese firms to join global supply chain

Shim Won Hwan, general director of Samsung Vietnam, visited M1 Communication One Member Limited Liability Company under Viettel Group in Hanoi. - VNS Photo Vu Hoa

Speaking during a visit to evaluate consulting results for 3 enterprises operating in the field of supporting industries in the north on Thursday, Hwan said Samsung’s investment into Việt Nam is not just a short-term vision or for immediate benefit, but with long-term goals.

These companies are M1 Communication One Member Limited Liability Company under Viettel Group in Hanoi, Viet Applied Investment For Packing Production Company Limited (VIPACO) in Hung Yen Province, and DM Vina Company Limited in Vinh Phuc Province.

“Samsung Vietnam is part of the Vietnamese economy and we want to contribute to the long-term development of Vietnam,” he added.

This vendor visit was part of a 12-week Samsung Advisory Programme, aiming to strengthen Vietnamese enterprises’ capacity to participate in Samsung’s supply chain.

Accordingly, South Korean experts surveyed and evaluated Vietnamese enterprises for 2 weeks, then will directly consult and work with the businesses for 10 weeks. After 3 months, the enterprises have recorded positive results in improving production processes and completing standards in supplying products and components for Samsung factories in Vietnam.

He pointed out that improvements take small steps to deliver big benefits.

“The innovative approach and process must be completed to get the perfect product for the partner,” he said.

The small improvements have brought remarkable results to the companies in question.

For example, during the implementation of the assembly of electronic components on circuit boards, after three months of consultation, the productivity of M1 increased by 32 per cent and the defect rate decreased by 56 per cent. This achievement was reached thanks to a reduction of up to 80 per cent in travel distance in the manufacturing chain (from 250m to 50m), thereby optimising manpower, eliminating backward movement and solving congestion points, helping to stabilise product quality.

Luu Quang Truong, M1’s director said Samsung’s consultancy changed their staff members’ mindsets.

“We determined to change and regularly improve our production toward Samsung’s consultancy to be eligible to join Samsung’s supply chain,” Truong added.

Nguyen Xuan Thanh, director of VIPACO said the consultancy has helped them increase productivity by 58 per cent and reduce the defect rate by 57 per cent. These achievements have come thanks to the support of South Korean experts as well as VIPACO’s efforts to improve performance loss and operating time of the machinery.

DM Vina Company Limited is a newly established firm operating in the field of repairing telephone screens. The Samsung Innovation Consultancy Programme has helped the company stabilise its production and quality system by applying an optimised production line layout; operating indicators to improve productivity; analysing problems and building a response plan for every single part; and conducting activities to improve the production environment.

Prior to implementing these consultancy programmes, Samsung had worked closely with the Ministry of Industry and Trade, Governmental agencies and related associations in searching, evaluating and selecting potential Vietnamese enterprises to take part in this programme.

This process has been conducted strictly, from receiving and studying profiles of Vietnamese enterprises to organising field trips to evaluate their activities in order to select potential and appropriate enterprises.

“We are constantly looking for potential Vietnamese enterprises to participate in our business consulting programmes with South Korean experts. This programme is considered to be a crucial step for Vietnamese enterprises to strengthen their capacity to compete and join in the global supply chain of Samsung. The programme was launched in 2015, and after each session, there is significant increase recorded in the productivity of the enterprises taking part. Productivity has increased by over 30 per cent on average. We will continue to promote this programme on a larger scale in Vietnam.”

From April 2018, Samsung launched a programme to train 200 Vietnamese consultants in cooperation with the Ministry of Industry and Trade. This will be conducted for 2 years in both northern and southern regions.

After finishing the training course, in parallel with participating in consultancy with South Korean experts, 200 Vietnamese consultants will directly implement various programmes of improving production activities for Vietnamese enterprises, which helps the project multiply and works towards the common development of the supporting industry in Vietnam.

Compared to 35 per cent in 2014, Samsung’s current localisation rate is 58 per cent. Correspondingly, the number of Vietnamese enterprises which are Samsung’s Tier 1 suppliers has increased greatly. From four enterprises in 2014, the number has increased to 35 enterprises at present, with the expectation of 50 enterprises by 2020. This target is gradually being realised via Samsung’s continuous efforts to comply with the Government of Vietnam in the development of the supporting industry.

On November 15, Samsung also conducted an assessment of three enterprises in the South participating in the programme, including Minh Nguyen Industry Support Joint Stock Company, Hai Hà Machinery and Trading Company Limited and Sacom Wires and Cables Joint Stock Company. These are 6 enterprises among 38 Vietnamese enterprises that have received support and consultancy from South Korean experts from Samsung since 2015.