Topic Participate In Gpac 2022 Opportunities And Challenges Of Enterprises In The Post-Covid- 19 Supply Chain Digital Transformation In Vietnam.pdf

VIETNAM NATIONAL UNIVERSITY UNIVERSITY OF ECONOMICS AND BUSINESS

-TOPIC PARTICIPATE IN GPAC 2022

OPPORTUNITIES AND CHALLENGES OF ENTERPRISES IN THE POST-COVID- 19 SUPPLY CHAIN DIGITAL TRANSFORMATION IN VIETNAM

Mentor: Dr Dao Thi Ha Anh

Group Students: Nguyen Thuy Duong Luu Thi Thu Tra

Dinh Long Nhat Ngo Thi Thanh Nhan

Hanoi 08/2022 –

TABLE OF CONTNENTSIntroduction

1.1 Reason for choosing topic: 4

I Reality of digital transformation of supply chain in the world and Vietnam 6

2.1 Reality of digital transformation of supply chain in the world 6

2.2 Reality of digital transformation of supply chain in Vietnam 8

2.2.1 Application of information technology and digital transformation in logistics enterprises 8

2.2.2 Application of information technology and digital transformation in some logistics enterprises 13

2.2.3.Limitations of application digital transformation in some Vietnam logisticsenterprises14 II Oppoturnities and Challenges for Vietnam small logistics enterprises in application digital transformation 16 3.1 Oppoturnities for Vietnam small logistics enterprises in application digital transformation 16

3.1.1 Cost and Time Efficiency Through Automation 17

3.1.2 End-to-End Visibility With Real-Time Tracking 17

3.1.3 Interoperability Through Digitalization 18

3.1.4 Optimization of Internal Operations 18

3.2 Challenges for Vietnam small logistics enterprises in application digital transformation 19

3.2.1 Regarding financial potential 19

3.2.2 Regarding human resources: 20

3.2.3 Old mindset - Stability and fear of changes 21 3.2.4 High technology application in the services provided has not met the requirements

21 III Solutions and Recommendations 22 4.1.Apply barcodes to concretize shipping methods and push product codes to the system for easier process management and monitoring 22 Types of Automation Small Businesses Should Use 27 Conclusion 28

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Introduction:

1.1 Reason for choosing topic:

As we all know, Covid-19 has caused heavy damage to the whole world is called a It Global Pandemic because of its negative effects on people and society Currently, there are countries that have temporarily prevented the epidemic, but there are also countries that have not yet been able to control the epidemic because the economy is not yet strong In recent years, Vietnam is known as a country heavily affected by Covid-19 Statistics show that in the past 1 year, Vietnam has recorded more than 10 million people infected with Covid-19, of which tens of thousands of people unfortunately survived and passed away forever However, instead of grieving and falling, from here we can see the Vietnamese spirit, the Vietnamese will Vietnam has since recovered from the pandemic and has become one of the countries with many new steps improve to the health sector and improve treatment methods for patients infected with Covid-19

The spread of COVID-19, has been and is still being felt globally across operations in ways that are difficult to model and assess Without a doubt, supply chains in every country, including Vietnam and across industries are affected.

Compared to other regional peers, Vietnam has done well to contain the pandemic and reopen the economy Now that the country has moved from crisis response recovery, to the critical question for Vietnamese businesses is how to better prepare your supply chain for future shocks

Besides improving healthcare, Vietnam's economy has also been boosted and made a strong comeback after the epidemic The main highlight is the digital transformation in the post-Covid-19 supply chain in Vietnam As we all know, when all direct businesses are stagnant because of the pandemic, online business and trading is a new trend in this era The era when people and families all use the internet and shop online That is the development opportunity of a new business form, opening a new era for the field of digital transformation in the supply chainin Vietnam in the post-Covid-19 era Besides

unexpected and potential opportunities, there are still some disadvantages as well as challenges that have been, are and will likely happen with digital transformation in the supply chain in Vietnam in the post-Covid-9 era Therefore, in the following report, the authors will present the opportunities and challenges of digital transformation in the post- covid-19 supply chain in Vietnam

1.2 Research subject: Small and medium enterprises in Vietnam1.3 Research Scope: Time: 2020-first half of 2022, Place: in Vietnam

1.4 Research Methods: Using secondary data to analyze and come up with solutions.1.5 Research purpose: This study shows the current status of the process of digitizing the supply chain of Vietnam after the pandemic, thereby analyzing the opportunities and challenges faced by Vietnamese small and medium businesses to offer legal solutions and objective recommendations

1.6 Literature review

According to Marzenna Cichosz, Carl Marcus Wallenburg, A Michael Knemeyer (2020) with the research “Digital transformation at logistics service providers: barriers, success factors and leading practices”, have shown that: The rapid advancement of digital technologies has fundamentally changed the competitive dynamics of the logistics service industry and forced incumbent logistics service providers (LSPs) to digitalize As many LSPs still struggle advancing in their digital transformation (DT), the purpose of this study is to discover barriers and identify organizational elements and associated leading practices for DT success at LSPs

In Vietnam, Truong Thi Vien (2022) with research “Opportunities, Challenges And Solutions For Logistics 4.0 Development In Vietnam '' focuses on introducing the constitutive elements of Logistics 4.0, opportunities and challenges, and proposes recommendations for stakeholders This has shown that Logistics 4.0 is synonymous with the Fourth Industrial Revolution The term refers to the digitization of the industrial sector, which leads to the digitization of physical elements and how they function This simply shows that products, plants, goods, machines, warehouses, vehicles, etc are all

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interconnected and do not operate autonomously In the face of the strong development trend of science and technology and the Industrial Revolution 4.0, besides the great opportunities brought, Vietnam's logistics industry will have to face many difficulties and challenges, requiring agencies and agencies Management, associations, and logistics enterprises must understand this well to have solutions to adjust to the new situation

I Reality of digital transformation of supply chain in the world and Vietnam

2.1 Reality of digital transformation of supply chain in the world

Traditional supply chains used to be able to build and maintain transportation networks only with the help of machines, labor, and limited geographical and resource constraints However, when faced with disruptions such as epidemics and natural disasters, these organizational structures in the supply chain are no longer suitable.

The advent of digitized supply chains has solved those problems As we can see in the image above, the obvious difference between the traditional supply chain and the digital supply chain is the crux of the problem The digital supply chain has completely overcome the limitations of space and time in information processing, data analysis, and more accurate decision making

Following the COVID-19 outbreak, lockdowns most in countries have particularly affected logistics companies by reducing traffic, delaying shipping, and increasing the time and money needed for logistics operations

In Europe and other regions, local disease control measures also disrupted domestic logistics, making compliance with delayed shipping dates impossible The US even imposed a 14-day docking restriction on ships returning from China

The ongoing covid-19 crisis has severely disrupted global supply chains, especially the supply of essential items While some businesses have had to reduce capacity or even close due to the negative impact of the pandemic, others have equipped themselves with smart

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technologies to maintain their operations or transform chains production such as: applying the Internet of Things (IoT), data, big data, AI, Blockchain and other new technologies, while improving process efficiency and cost effectiveness… These advanced technologies have influenced the way supply chains are managed and thus affecting management supply chain disruption management (ivanov, dongui and sokolov, 2019)

Digital technology has developed rapidly and is gradually becoming an important role in every business operations and supply chain It even has a positive impact on the resilience of the global supply chain after the covid-19 pandemic

The stages of the supply chain have improved significantly, a number of digital technologies have been implemented in tracking and tracing systems (T&T systems), such as barcodes, radio frequencies route identification (RFID) and global positioning systems (Gottlieb, Ivanov and Das, 2019)

According to Kumar et al (2020) , their studies have identified 12 challenges posed by covid-19 facing the supply chain and retail sector, including the lack of supply chain flexibility, communication problems, supply and demand imbalances and workforce shortages However, this study indicates that these challenges also show resilience in the event of a double-sided COVID-19 Pandemic, contributing to accelerating the emergence and large-scale application of digital technology digital like internet of things, robotics, big data analytics and 3D printing

After 2 years of the pandemic, technology is not only to prevent and control the epidemic, but also to help the supply chain react quickly to maintain or restore the operation of the supply chain of enterprises According to “Warehousing Services In 2019”, the warehousing industry saw significant changes with automation due to the growth of cross- border e-commerce and increased demand for integrated supply chain solutions Large corporations such as Amazon, Alibaba, JD.com, Lazada and Flipkart are rapidly making new strides in forwarding activities such as providing innovative online solutions in freight mix, custom brokerage and transportation management solutions are expected to change this segment and create better interactions with customers

2.1.1 Some advantaged digitalization technology apply on the supply chains:

AI: based forecasting solutions such as intelligent forecast systems allow businesses to plan supply chain processes and find ways to reduce operational costs Autonomous vehicles and drones are influencing the positive shift towards automating delivery services

Cloud Computing: Cloud-based logistics solutions also solve communication bottlenecks and allow businesses to securely collaborate and share data, providing the ability to universal access and not limited to any physical space

Blockchain: Blockchain brings transparency of transactions to the entire logistics process Furthermore, blockchain technology-based smart contracts allow for faster approvals and clearances by reducing processing times at checkpoints

Robots: Integrating robots into the supply chain increases thespeed and accuracy of supply chain processes while reducing human error Physical robots, such as collaborative robots (co-bots) and intelligent autonomous robots (AMRs), are used to pick up and transport goods in warehouses and storage facilities.

Warehouse Automation: Warehouse automation helps increase efficiency, speed and productivity by reducing human intervention Pick and place technologies such as automated navigation vehicles (AGVs), robotic picking, automatic storage and retrieval (ASRS), and spot picking help reduce error rates and increase productivity warehouse capacity Warehouses require a combination of effective automation technologies to control operating costs.

Big Data & Data Analytics: Data analytics provides useful insights improve to warehouse productivity, manage performance, and make optimal use of resources logistics 2.2 Reality of digital transformation of supply chain in Vietnam

2.2.1 Application of information technology and digital transformation in logistics enterprises

The trend to promote digital transformation is also the goal of the Vietnam Logistics Association VLA Congress VIII term (2021-2024): Towards the goal of digital transformation - creativity - innovation With this policy, VLA has established a specialized

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committee called Digital Transformation Department with the orientation to develop strategies and action plans towards digital transformation for member businesses The Covid-19 pandemic also creates an impetus for logistics businesses to further promote the application of information technology and the digital transformation process order to Inassess the current situation of information technology application and digital transformation of logistics enterprises, especially in the context of Covid-19, the Vietnam Logistics Research and Development Institute (VLI) conducted a survey and interview In-depth consultation with logistics business groups providing different areas of logistics services: transportation, warehousing, distribution centers, last mile delivery, express delivery, smart delivery platform The survey results show that 38.24% of businesses believe that Covid- 19 has formed the need for digital transformation of logistics businesses, while 42.65% of businesses believe that the impact of Covid-19 is to change the digital transformation changing customer needs (such as using more e-transactions, e-commerce delivery services ), in addition, there are other trends that are seen formed as a change in the concept of operating logistics enterprises, especially foreign forwarding companies; ability to work remotely

Figure 1: The Covid-19 pandemic has formed new trends in the logistics service market

Source: Vietnam Logistics Research and Development Institute - VLI (2020-2021)

Enterprises participating in the survey showed interest and assessed the important role of digital transformation, however, the biggest barrier to promote enterprises to implement digital transformation arises from the following difficulties: technology compatibility between their businesses and partners the logistics service in chain (44.74% of enterprises), limited funding and limited human resources (42.11%), have not yet found transfer technology appropriate change (39.47%) and 28.95% of businesses wondered how to spend investment funds appropriately and how to start In addition, converting a huge amount of existing information to a digital platform is also an obstacle for 15.97% of businesses Meanwhile, businesses do not pay attentionto the safety and information security of online platforms when only 5.26% of businesses think that this is an obstacle to their digital transformation enterprise

The above survey results show that in order to promote a strong digital transformation process, it is necessary to closely cooperate with businesses with partners in the service chain network to be able to make the right decisions in the field of digital transformation choosing the right application or platform not only for business operation but also compatible with the partner's system to ensure the effectiveness and success of digital transformation The results of -dep interviews show in th that digital transformation depends a lot on the mindset of business leaders, and must be considered as a strategy of businesses including small and medium enterprises

In fact, businesses have the characteristics of operating with a large amount of data (big data) with the number of orders can be up to several hundred thousand to 1 million orders per day in the whole area country, the need for digital transformation becomes an urgent issue and is

prerequisites to carry out operations, such as courier or last-mile delivery businesses, to ensure prompt and timely delivery of goods

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Figure 2: Difficulties encountered when applying digital transformation at enterprises

Source: Vietnam Logistics Research and Development Institute - VLI (2021)Although there are many difficulties affecting the application of information technology and digital transformation of Vietnamese logistics enterprises, the survey results show that enterprises have made great efforts to invest and apply technology necessary information technology in performing major logistics services Specifically as follows: 75% of businesses are using FMS (forwarding management software); 63.89% of enterprises are using OMS and WMS software (order management software, warehouse management software); 61.11% of businesses are using TMS (transport management software) However, applications that can optimize operations such as VRP (vehicle routing system) or AS/RS automated picking and storage systems or Automated guided vehicle pick up very few enterprises use it with the corresponding rates of 19.4%, 16.67% and 11.11% (Figure 23)

Figure 3: Information technology applications and development trends that businesses are or plan to provide to customers using logistics services

Source: Vietnam Logistics Research and Development Institute (2022)

In particular, the application of drone technology (Drone) has not been used at all, but 11.11% of businesses plan to use the future it in Drone is automatic flying device an that is being applied to deliver goods in large cities with high population density for urban logistics In addition, the need improve to the efficiency of goods handling at distribution centers and warehouses in order to reduce lead time and optimize time and human resources is also the driving force behind 27.78% of businesses that will invest in using the product application of automatic pick-up trucks as a solution to reduce dependence on human resources and increase automation

To improve the efficiency of information technology application and promote digital transformation, logistics enterprises need to have appropriate, effective and fast action plans and strategies The results of in-depth interviews with businesses show that some solutions are proposed as follows:

Need support from State management agencies and Associations;

Enterprises must have standard operating procedures; the leadership's determination; suitable technological solutions;

There should be a synchronous change and the advice of experts and awareness of the business (change logical thinking);

Need to specialize and create a common playing field for the logistics industry;

There needs to be a high degree of unity in the business leadership, it is necessary to invest in training human resources to meet the requirements of digital transformation and to choose the right road map for the business;