Advantages and Disadvantages of Sourcing from Vietnam - PowerPoint PPT Presentation


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Advantages and Disadvantages of Sourcing from Vietnam


Vietnam sourcing is becoming increasingly attractive. Vietnam offers a talented and willing work force and is a relatively politically stable environment. – PowerPoint PPT presentation

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Title: Advantages and Disadvantages of Sourcing from Vietnam

Advantages and Disadvantages of Sourcing from
  • What country comes to mind when you hear the term
    manufacturing hub?Vietnam. Its top
    manufacturing sectors include food processing,
    tobacco, textiles, chemicals and electrical

  • Over the last five years, the news has become
    increasingly filled with stories about
    manufacturing shifting from China to Vietnam.
  • Perhaps the most notable example of this was
    the revelation in 2010 that Vietnam became the
    primary supplier of Nike-branded footwear.

  • Recent foreign-friendly reforms now allow
    foreigners to own property as well as majority
    holdings in Vietnamese companies.
  • Easier access to credit has also added to the
    notion that Vietnam is becoming the new China
    with foreign manufacturers
  • The countrys geography is another advantage.
    Vietnam generally suffers fewer natural disasters
    than its neighboring manufacturing nations

  • No safeguard quota issues foreseen in 2009
  • Comparatively lower labor costs
  • Some independent owners of facilities
  • Temperate climate conditions
  • Minimal logistical issues for shipping

  • A possible risk to manufacturing in Vietnam has
    been the propensity for worker strikes.
  • Most raw materials must be imported, resulting
    in longer lead times
  • Most manufacturing facilities are
  • Financing of product materials and actual
    production is unstable

Contractual agreements are not always
honored. Labor-compliance issues exist in many
facilities. Documentation issues arise for lack
of education. There is difficulty in working
directly with the facilities, with brokers and
agents acting as barriers. Quality of raw
materials specified vs. that which is actually
provided often varies.
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