VB 2014 2 issue_preview - page 2

May 2014
Finding the right sourcing partners to work with can be a complex
and stress-inducing process. Before rushing into the countryside and
interviewing every possible partner, it is important for a company
to clearly define what specifically they are looking for in a sourcing
partner and what they expect from the area where that partner is
located. Important specifics for most companies would include:
• What type of products are being sourced;
• The level of experience required (technical, etc);
• Capital ability of the potential partner;
• Relevant state/local legislation;
• Existence/quality of supporting industries (how will the supply
chain work?); and
• Quality of infrastructure/transportation systems in the area where
the potential partner is located.
Additionally, a foreign company must decide on its entry strategy
into Vietnam, as well as what its long-term strategy will be. Does it
plan to hire a lot of employees or just a few at first? Is it possible to
handle sourcing operations without a footprint within the country,
or will the company have to open an office on the ground? Where
will the finished products be transported to?
Starting the search
There are a variety of helpful channels for finding sourcing partners,
these include:
• Online databases;
• Official government databases listed by commercial chambers
of commerce;
• Associations of planned products;
• Professional sourcing agents;
• Trade fairs; and
• Information provided by industrial parks and economic zones.
Of course, there are other less official ways of finding a sourcing
partner such as through personal introductions, client referrals, and
other types of internal connections.
Once a list of potential candidates has been created, it is then time
to proceed to the next stage of the process and begin the screening
of the different companies. This stage often requires visiting the
potential partner’s factories so that a clearer idea of their capabilities
can be formulated. Due to the time involved, not to mention
overcoming barriers such as language, many companies tend to hire
to perform the screening process for
themand to identify the best candidates to act as sourcing partners.
It should also be taken into consideration that, due to Vietnam’s
legal rules, a company is not locked into the initial decision that it
makes. These laws allow business entities to change the scale of
their operations and change their legal form, as well as allowing
them to do any other actions which are entitled by law. In short,
the scale of business is not fixed and can be altered according to
the needs of the investors.
Choosing the location
Once the basic specifics of a sourcing partner have been laid out by
the company, the next step is to begin identifyingwhich parts of the
country are best suited for the needs of the company.
What follows below is a detailed breakdown of the key areas
throughout the country for a variety of common business products.
It is also important to take note of the location of the various
industrial parks, high tech parks, and export processing zones. Before
any sourcing decision can be made, it is vital to thoroughly think
through where it is best to strategically locate your business and
where your sourcing partner should be located.
Deciding on Your Sourcing Partner
– By Dam Thi Phuong Mai and
1 3,4
Powered by FlippingBook