Innovation in the Logistics Industry

On Sunday, November 29, 2020, as part of the Techfest Vietnam 2020 Innovation Festival, Abivin had the honor of partnering with experts from major businesses and organizations to share about innovation in logistics. From the perspective of leaders in operations and technology, the speakers shared valuable experiences not only for small and medium enterprises or startups but also for students wishing to develop their careers in the logistics industry.

Here are the highlights of the seminar.

1. The challenge of digital transformation in the logistics sector  

Mr. Phan Trọng Lê, Head of Research and Development and Branding at Vietnam Post Corporation (VNPost), began the seminar with the presentation "Digital Transformation in Logistics." In his speech, he stated that the essence of digital transformation in businesses in general and in logistics in particular involves the necessary changes to help the organization avoid being eliminated in the new economy. According to him, the first step, which is also the most difficult, is for the business to identify a "problem statement" to find a reasonable solution. Leaders need to identify the most pressing issue their business is facing and the cause of it to come up with a comprehensive or partial solution to allocate resources to other problems.

"Each business will always have its own problem to solve," Mr. Lê emphasized.

Mr. Lê shared that VNPost has to handle nearly 1.5 trillion VND in cash, 50 million units of mail, and 100 million units of press publications from publishing houses annually, in addition to technology shipments from multinational corporations. Under great market pressure, VNPost is also taking steps to innovate with a 10-year digital transformation plan.

Even though he represents a large-scale enterprise, Mr. Phan Trọng Lê's approach to digital transformation is still methodical and focuses on micro problems first. For example, the problem of reducing logistics costs by optimizing routes and loads will be prioritized over warehouse management.

He believes that digital transformation must always be customer-centric for development. Therefore, he considers people to be the most crucial link in the "Revolution" of digital transformation. Not only should the quality be improved to increase customer satisfaction, but business leaders also need to embrace change and welcome challenges to create an environment that respects innovation and creativity.

2. Innovation in Logistics must go hand in hand with infrastructure development  

Following Mr. Phan Trọng Lê's presentation, Mr. Đặng Tấn Đức, Assistant to the Chairman of the Board of Directors of Becamex IDC Corporation, discussed the importance of infrastructure development to improve the quality of the logistics sector from an investor's perspective. At the beginning of his speech, Mr. Đặng Tấn Đức warned about the current state of Vietnam's logistics sector: escalating costs, accounting for up to 20% of the country's total GDP in 2019, while efficiency remains low, leading to significant waste.

In this context, Mr. Đức highlighted the value that Becamex Corporation brings to society in general and the logistics sector in particular. This includes creating interregional routes connecting industrial zones to seaports and airports, developing National Route 13, and enhancing warehouse and factory infrastructure to create jobs and boost economic transition in southern provinces like Binh Duong.

With this macro vision, Mr. Đặng Tấn Đức said Becamex is promoting the construction of multimodal transportation models to provide additional support for the overloaded road transport as Vietnam gradually integrates deeper into the global value chain. Thus, railways from Bien Hoa to Vung Tau, or river ports and ICD ports, will be built to expedite goods transshipment at lower costs.

Another urgent issue mentioned by Mr. Đức is the need to replan road traffic to optimize goods transportation alongside human movement. He shared that Becamex is actively implementing projects to develop urban clusters around public transportation hotspots (Transit-oriented development). Examples include the construction of inter-provincial rapid bus lines and metro lines.

3. 2021, the golden time for the logistics community to digitize

Following the two presentations, the speakers had a discussion session on "Innovative Logistics to Enhance the Competitiveness of Vietnamese Enterprises." At the beginning of the discussion session, Mr. Nguyễn Tương, Deputy Secretary-General of the Vietnam Logistics Service Enterprises Association (VLA), recapped the state of Vietnam's logistics sector in the past year. Due to the severe impact of COVID-19, the global supply chain was disrupted, significantly affecting Vietnam's economy. Particularly in the logistics service sector, Mr. Tương shared statistics from the logistics association: 20% to 60% of Vietnamese logistics service companies were affected during the pandemic. It wasn't until early Q4 this year that 60% of the aforementioned companies recovered their business activities to pre-pandemic levels. In this context, Mr. Tương also highlighted an unusual phenomenon, COVID-19 has accelerated the digital transformation of businesses rapidly. Digital transformation plans that were set for five years were completed in just eight months.

Mr. Đặng Tấn Đức added that 13 international trade agreements have been ratified, providing many opportunities for businesses to cooperate and develop with international partners. However, Mr. Đức also warned that if businesses are complacent, "only seeing opportunities without recognizing challenges," neglecting innovation and digital transformation, they might fall behind.

To prepare for digital transformation, Mr. Dương Quốc Anh, Northern Branch Manager of DHL Supply Chain Vietnam, gave advice on digital transformation for businesses operating in the logistics field. He noted that companies need to focus on three main factors: a people-oriented approach, financial capacity, and technological consistency.

Firstly, according to him, the company's leadership needs to develop a mindset ready to accept challenges and a "global mindset." Employees need to be motivated and thoroughly trained in processes and technology applications. Technological changes also need to be supported and backed by customers, partners, or the government to connect and invest in development together. Mr. Quốc Anh cited the example of DHL eliminating cumbersome tasks related to electronic invoices, saving tens of thousands of dollars each month. However, he also emphasized that digital transformation requires substantial initial investments in technology, hardware, and software.

Conclusion

Thus, the seminar "Innovative Logistics to Enhance the Competitiveness of Vietnamese Enterprises" concluded successfully. The program's success is thanks in no small part to the audience's support and participation in the event.

Abivin sincerely thanks Techfest Vietnam for supporting us in organizing this seminar. The organizers also extend heartfelt thanks to the speakers for taking the time to participate in the seminar and sharing invaluable experiences to help businesses adapt and thrive in the new context. 

Watch the entire seminar at the link:

Youtube: https://bit.ly/36yVPVp

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