Materials seminar for FDI plants in Hai Phong
The seminar hosted by AMS in Hai Phong gave engineers and purchasing managers from FDI plants an opportunity to share experience in localizing materials, optimizing costs and shortening the supply chain while maintaining the same quality.
Hai Phong is one of the major hubs for foreign direct investment in Northern Vietnam, home to many electronics, auto parts and home appliance plants. Pressure to reduce costs and the risk of shipping disruptions have made material localization a more pressing topic than ever.
Material localization: benefits and barriers
The opening session analyzed the benefits of purchasing materials through a domestic distributor: short lead times, lower safety stock, payment in local currency and on-site technical support. Alongside these are familiar barriers such as approval processes at the parent company, traceability documentation requirements and concerns about lot-to-lot consistency.
Experience in switching supply sources
AMS specialists presented a five-step transition roadmap drawn from many completed projects:
- List the materials currently imported and their annual consumption.
- Identify equivalent codes from the same manufacturer or alternative codes with existing data.
- Run parallel trials on the line in limited quantities.
- Prepare change documentation for the parent company or end customer.
- Make the official switch and monitor quality for the first three months.
Cost optimization is about more than unit price
The second session focused on the total cost of using materials. A higher-priced adhesive that cures faster can increase output; packaging matched to the dispensing equipment reduces discarded adhesive; slitting tape to the correct width reduces scrap. Together, these small improvements often deliver greater savings than pushing down the unit price.
When they look at total cost, many plants realize that the adhesive thrown away due to expiration and over-dispensing is worth more than the price difference between suppliers. — AMS Supply Chain Consultant
Discussion and networking
The Q&A session was lively, with questions about storing adhesives during the humid season, RoHS documentation for exports and how to persuade the parent company to approve local suppliers. After the seminar, AMS received many requests to survey material portfolios at plants.
The presentation materials from the seminar were sent to attendees, along with a material inventory template to help plants review the items they currently import. AMS plans to continue hosting topic-focused sessions at other industrial parks in the region.
For advice on a material localization roadmap for your plant, contact AMS Vietnam.
