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The Global Tech Supply Chain Changes Lives in Rural Vietnam

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The lives of previously poor people in the northern provinces of Vietnam are being changed, for the better, due to incoming manufacturers in the global tech supply chain. They are committing to investing billions of dollars to set up operations. Manufacturers like Samsung Electronics, Nokia, Apple assembly partner Pegatron Corp. and Hon Hai Precision Industry Co.

This story is an example of how a powerful supply chain can totally alter a region and drastically improve the standard of living of the people.

The Bac Giang province was always one of the poorest regions in Vietnam until the global tech supply chain decided it was a good place to set up business. Foreign investment has doubled year on year even during 2020 and the coronavirus pandemic.

Today the per capita income for the Bac Giang region is forecast at $3000 for 2020 – over a 120% increase from 10 years ago.

Unemployment in the region is close to zero and the assembly line workers are earning a salary that is almost double to the nation’s average annual salary.

Manufacturers are moving away from China, as a base for business, due to the rising labour costs, the US-trade war and logistics vulnerabilities as a result of the pandemic. Vietnam implemented control measures early on with the virus, and as a result, they have only experienced 300 cases and not a single death.

Vietnam has become a very appealing location for manufacturers for the following reasons:

  • They addressed and sorted out public debt
  • Introduced measures to reduce the budget deficit
  • Fought against corruption and delivered tangible results
  • Improved governance
  • Invested in infrastructure
  • Made it easier to do business and allowed the public sector to flourish
  • Introduced investor-friendly policies
  • They promote tech start-ups

They moved the economy to focus on manufacturing and services which are both productive and lucrative industries. This caused the economic growth in 2019 estimated to be about 6.8%, which is over double the world average.

This economic growth has instilled confidence among investors overseas and made Vietnam one of the most popular destinations for companies looking to tap into cheaper labour.

Logistics

The Top Five Logistics Companies in Africa.

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There are a few aspects to observe when looking to find what makes the best logistics provider from their rates, reach, their ability to adapt to change and, most importantly experience and organisation of their human resources.

1.            DHL Logistics:

DHL is comfortably the world’s leading logistics company, founded in 1969, this logistics giant has a footprint in over 200 countries and a strong employee base of 590,000 people worldwide with a revenue topping €81.7B as of 2021.  It is also leading the way in innovation of new bespoke solutions to assist communities such as parcel drone delivery of medicines in East Africa.

View their website: https://www.dhl.com/za-en/home.html

2.            UPS Supply Chain solutions:

Founded in 1907, UPS is one of the most recognisable logistic brands in the world. Operating in over 220 countries this USA based company manages just over 534,000 employees, turning over just under $97.3B in 2021. In 2020 they lead innovation in delivery of the Covid-19 Vaccine with research into safe drone delivery of medicines in hard to reach places.

View their website: https://www.ups.com/za/en/Home.page

3.            Kuehne + Nagel:

Operating in over 100 countries with close to 78,000 employees, and a turnover of over $34.5B in 2021, Switzerland based logistics company Kuehne + Nagel has managed to become a powerhouse in the logistics industry.  Developing the largest sea freight forwarder in the world specifically in the fields of Full Container Load (FCL) and Less than Container Load (LCL).

View their website: https://home.kuehne-nagel.com/

4.            DB Schenker Logistics:

Operating largely across Europe and North Africa, with more than 140 years’ experience in the Logistics & Supply Chain this German based company employees over 75,800 people and delivers to over 2,000 territories – with a turnover of €21.4B in 2021. They focus on providing the best and most efficient customer service that aims to make the supply chain more user-friendly. They are also the first company to utilise autonomous electric trucks, the T-Pod, on public roads for deliveries.

View their website: https://www.dbschenker.com/za-en

5.            DSV:

A reasonably new player in the logistic industry DSV has fast climbed the ranks to become one of the top providers and most recognisable brands in the supply chain industry. Operating in 75 countries with over 75,000 employees worldwide. They are operating non-stop dispatching over 15,000 trucks per day and moving 650,000 tons of air freight every year – bringing in $28B in 2021.

View their website: https://www.dsv.com/en

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KZN FLOODS: Durban port operations, logistics grind to a halt

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Trucks travelling on the N3 between Durban and Pietermaritzburg came to a grinding halt outside Mariannhill Toll Plaza on Tuesday after deadly floods, that have killed at least 20, people hit KwaZulu-Natal overnight, with Durban and surrounding areas among the hardest-hit regions.

Many residents are still missing and the SANDF had been activated to assist the province with rescue operations, KZN Cooperative Governance and Traditional Affairs MEC Sipho Hlomuka said on Tuesday morning.

Operations at Durban port had also stopped, according to industry sources, however, a notice issued by Transnet to stakeholders on Monday night noted that port operations were on standby for heavy rains and winds on Tuesday. “Landside and waterside operations are on standby for wind and heavy rain from 19:15 on 11/04/2022. New/unutilised appointment slots will not be available until landside resumes operations. Do not dispatch trucks to the terminal without appointments as they will not be processed,” Transnet said.

Wind speed had been recorded at gusts of 70 kmph, it added.

KZN roads, including sections of the M4 between Durban and Umhloti and the N2 south of Durban, were closed as water gushed down the freeway near the old Durban International Airport. Social media posts showed overturned trucks and containers that had dislodged from vehicles strewn across the N2 freeway, south of the city.

Road Freight Association CEO Gavin Kelly said logistics operations in the province had largely come to a standstill and the Durban port was not operating.

KZN COGTA MEC Sipho Hlomuka said the weather was continuing to cause havoc across the province on Tuesday morning.

 “Residents residing in low-lying areas are urged to seek shelter on higher ground, disaster management teams have opened public facilities such as community halls for those that need shelter.  The Department of Cooperative Governance and Traditional Affairs is working together with social partners and sister departments to ensure that there is interim relief for those that are housed in shelters. So far, the extent of the heavy rains is across the province, with eThekwini being one of the most affected areas,” he said.

The department’s teams were still collating the extent of the damage.

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People are a saving grace for a Covid-weary logistics/supply-chain industry under enormous pressure

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JOHANNESBURG, 14 March 2022 –  As much as automated systems are revolutionising supply chains, human capital – and more importantly, the quality thereof – remains paramount.

In Part 1 of the State Capture Commission’s report released this year, Justice Raymond Zondo went to great lengths to explain how government procurement processes had been subverted well before state capture even became part of the national conversation. Goods and services were procured when they were not needed, and there was often unnecessary duplication of work.

These practices were the direct result of people who were either unscrupulous or grossly incompetent.

This is an extreme example, but it does show what can happen when the wrong people are left to oversee logistics and supply chains.

While for the moment the worst of the Covid-19 pandemic appears to be over, Russia’s invasion of Ukraine is giving rise to further turmoil in the world economy as fuel prices skyrocket and sanctions reshape global supply chains.

That said, there is no doubt that the impact of the virus is also still being felt. Shipping costs remain high, and the world has not yet recovered from the microchip shortage affecting a number of industries.

The situation will necessitate that skilled logistics leaders and staff are in place to weather the storm and ensure that businesses won’t only remain sustainable, but profitable as well.

The supply chain industry is facing continuous change and major shifts due to the complex demands of customers. This has an impact and certain quality expectations on the roles of the supply chain specialists to adapt and shape business solutions.

Polly Mitchell-Guthrie, of supply chain software company Kinesis, points out that because today’s supply chains face many disruptions, it makes it extremely difficult to establish patterns, and no matter how technologically-advanced algorithms may be.

“It’s humans who possess the ability to derive meaning from context, so when disruptions arise, it is people who are able to use business acumen and domain expertise to make the best decisions for their supply chain,” she comments in Engineering & Technology magazine.

Certainly in South Africa there is huge scope for young, driven entrepreneurs to contribute effectively to supply chains.

A World Bank analysis for South Africa released in 2021 argued that if the country were to match the self-employment rates of countries like Brazil, Mexico and Turkey, making up an estimated 30% of all jobs, it could potentially halve its dismal unemployment rate of 34.9%.

Furthermore, the global human capital market size is expected to reach $32.68-billion (R502-billion) by 2027.

According to Fortune Business Insights, the increasing proclivity of companies towards artificial intelligence and machine-learning to eliminate unnecessary IT costs will foster the growth of market sales.

In other words, there is fertile ground for the country’s entrepreneurs to grow, and people will be at the heart of any potential revival. 

“People are the champions in making a business a success,” says Bidvest International Logistics’ (BIL) human resources director Harry Dimo.

“People are the fundamental human resources to provide quality service to the customers, therefore it is a must to continuously improve employees’ efficiency and performance.”

Dimo cannot stress enough the importance of having the “correct people with the appropriate skills sets and experience” on board to ensure processes happen as they should.

“The common qualities include the ability to solve technical problems, always display a sense of energy, learning and innovative capability, good leadership traits and intellectual humility.

“Individuals also need to be savvy in terms of the supply chain industry and be able to adapt to the continuous changes and challenges.”

At BIL, recruitment practices are geared to ensuring the company attracts and retains the best possible talent in the market.

Scouting for this talent occurs in a variety of ways. These include a state-of-the-art recruitment platform that connects to LinkedIn and all the biggest electronic job boards. There are also a large number of candidates on BIL’s database that enables it to find suitable replacements in shortened periods. The company also enjoys close relationships with recruitment agencies and boasts a well-established Employee Referral Programme which rewards employees for referring people they know to BIL.

Dimo recommends that recruiting individuals or companies should review their hiring processes by interrogating their pros and cons and align their hiring approach to business competency requirements.

By no means is BIL the only business that has had to endure the challenges of Covid-19, but it does stand out as one that has done so successfully.  This is because its leaders continued to support and develop its staff despite the pressures on global supply chains. 

“The BIL Academy had to become more innovative in how training and development should be remotely presented to employees, which brought about a big shift to insource training solutions which traditionally were outsourced to training providers,” Dimo explains.

“Management is constantly faced with the difficult task of keeping employees motivated during tough economic challenges, including Covid-19 circumstances, both inside and outside of the workplace. As a result, the best practice leadership approach is critical to ensuring that we cultivate a motivated, happy and productive workforce.”

BIL possesses what it likes to call its own internal “talent supply chain” that ensures continuity of highly-skilled staff. 

The company has a Transport Education Training Authority (TETA)- accredited internal academy that makes sure all qualifications are professionally recognised.

In addition to leadership programmes and other behavioural skills training to address the required competencies, bursaries are also offered to high potential employees who are able to pursue degrees and post-degree qualifications. 

BIL believes that while learnerships provide industry basics, tertiary study and other training address the current and future skills essential to the dynamic supply chain industry.

BIL also offers wellness solutions and employee support solutions. This offering was especially well received during the Covid-19 lockdowns.

Furthermore, the company programme includes periodical internal employee satisfaction surveys to understand what employees are going through in the workplace.

“We also have a robust and continuous improvement performance management approach which is linked to our reward system. Lastly, we have effective methods to celebrate successes and drive innovation,” Dimo concludes.

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