Seminar discusses centralised distribution supply chain model for Việt Nam

Seminar discusses centralised distribution supply chain model for Việt Nam

Supply chains are the silent enabler of business strategies, sereving as the backbone of a nation's prosperity, while a constrained supply chain acts as an emergency brake on economic growth, said Mike Reid, chief supply chain and logistics officer of Central Retail Vietnam at a seminar in HCM City.

A seminar in HCM City on Tuesday discussed how modern supply chains contribute to Việt Nam's long-term and sustainable development. — VNS Photo Hồng Linh

The seminar, themed "Partnership for a Better Supply Chain in Việt Nam", was co-organised by Central Retail Vietnam and French logistics and transport company FM Logistic on Tuesday.

With the participation of over 100 businesses, the seminar discussed direction for building a modern, centralised and sustainable supply chain for Việt Nam amid the formation of new urban areas following the merger of administrative units.

Oliver Langlet, Group Chief Executive Officer, Central Retail Vietnam, said that Việt Nam's supply chain remains fragmented and lacks solid foundations. 

Meanwhile, following the merger of administrative units in Việt Nam, HCM City has established itself as a regional logistics hub, with extended ring roads, upgraded seaports, and new logistics centres. 

The government's goal is to develop the logistics sector towards modernisation, digitalisation, and green growth. 

The company, in partnership with FM Logistic, is committed to the government's direction by centralising production, digitising processes, and investing in safer, greener logistics. 

Reid said that in Việt Nam, with modern trade in the food sector accounting for less than 15 per cent, the potential for transformative growth is huge. 

A 2023 study showed that the country has 1.5 million trucks, double Thailand's, but transports only half the volume of goods. 

This may be because businesses make supply chain decisions with a narrow focus on cost, resulting in short-term contracts and a lack of long-term investment. 

One key solution is centralised distribution, which helps reduce delivery costs by using a full truckload to a single point instead of making dozens of smaller, inefficient direct deliveries. 

For example, using larger trucks for combined deliveries reduces the number of trucks on the road, eases traffic congestion, and improves end-to-end efficiency.

Centralised systems also help businesses track real-time product availability, allowing them to take the right actions to maximise stock and drive sales. 

This also helps reduce fuel consumption and emissions by minimising unnecessary trips and consolidating deliveries.

Additionally, through collaboration and consolidation, businesses can reach more provinces economically, providing access to the full range of products and services. 

Hamza Harti, Managing Director of FM Logistic Vietnam, said that digitalisation is a crucial catalyst for transforming the logistics industry. 

This helps modernise the supply chain, making it more transparent and flexible, and will contribute significantly to the future of modern retail in Viet Nam. 

He also highlighted Viet Nam's young logistics workforce and mentioned that the company will continue to cooperate with local universities to support students.

Nguyễn Thành Nam, Deputy Director of the Domestic Market Management and Development Department under the Ministry of Industry and Trade, said that the supply chain is a crucial element in enhancing national competitiveness.

He mentioned that the country is a leading destination for many multinational corporations in various fields, with an increasingly modern logistics system and strong investment in commercial infrastructure.

However, the country's supply chain faces challenges, with the ratio of logistics costs to GDP still higher than the regional average, and limited links between domestic and FDI businesses. 

Additionally, the application of digital technology, big data, and artificial intelligence in supply chain management is not uniform, and the capacity for forecasting, risk management, and sustainability in the supply chain remains a challenge. 

Therefore, some key directions have been proposed, including developing synchronous infrastructure and building a digital platform, which involves promoting the application of advanced technologies, such as blockchain, IoT, and AI, to increase transparency, forecasting ability, and operational optimisation. 

The ministry also encourages strategic partnerships and collaboration among businesses, especially within the logistics and supply chain sectors. 

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