Chapter 5 CONCLUSIONS AND SUGGESTIONS
5.5 Suggestions
Despite of Vietnam has favorable geographical conditions for the development of logistics industry, severe competition is inevitable from large scale foreign companies with the implementation of high technology and e-commerce. Logistics will continue to contribute to the development of Vietnam economy. Thus, government should carefully spot which factors that advance Vietnam to become transshipment center of the world as Singapore and Hong Kong.
Although, oversea enterprises are leading the market but domestic LSPs can be established to further the development of Vietnam logistics industry with the help of by government. Although the findings indicated the weakness of BP&POS, Human resources, information and technology in LSPs, and government policies, this study is simultaneously aimed at rendering suggestions by offering solutions to ease the dilemma in Vietnam while promoting the competency of Vietnam LSPs.
Based on the analysis on chapter 4, I suggest some plausible solutions for domestic LSPs as follows:
Increasing the quality of service
Operating in the fierce competitive environment without the protection of the state, no solutions are more effective for LSPs than developing their quality of services. To improve the quality of services, LSPs have to continue to invest in upgrading assets that they had, modernizing service equipment, procuring new equipment. Upgrading their service equipment will facilitate the deployment of services that they provide to customers in the transportation and warehousing.
Expansion and diversification of services
Diversifying types of transport services, diversification of products and services lead to a comprehensive development of model logistics. This model will increase the responsiveness of LSPs. Expanding the operation help companies reach wider market while keeping their existing customer. Trend of diversifying services focuses on three main stages:
- Undertake the packing of goods.
- Supply inventory service and transportation of goods to the final customer
42 - Built warehouse system.
Standardizing the diverse needs of the market
This measure requires great efforts of the domestic LSPs in Logistics Vietnam industry.
Two typical strategy used to standardize logistics market demand was product service innovation and strengthening the role of marketing. The collaborating between members on the basis of using the competitive advantages of each business (facilities, equipment, information systems, etc.) to supply full service door-to-door, extending business scope in both domestic and international market contributing to consolidated customer needs.
Changing in marketing solution
Companies need to reform methods of marketing, instead of focusing on the fragmentary operation, low price, brand of Logistics. Vietnam industry need to develop comprehensively to provide 3PL activities, and may be 4PL in the long-term plan.
Establishing alliances
Source of competitiveness of Vietnam LSPs is mainly from the natural conditions and local understanding. Alliances once again express their important. It is the easiest and most effective solution to combine physical resources, ability and experiences of LSPs together.
Linkages between the alliance and members can also support through practical advice and help LSPs improve professionalism.
Develop training programs of companies
LSPs can cooperate with others in the Vietnam Logistics Association to arrange long and short-time training. The combination between companies about areas of interest, as well as invitation of training experts will decrease training cost. Businesses today are planning for human capital to ensure successful competition and service providers that have higher levels of intelligence:
- Training and specialization of workforce who are responsible for Customs procedures in the international forwarding company.
- Arrange business trip to developed logistics industry country.
43 - Training and re-training of existing resources.
- Attract labors who have a university degree related to logistics subjects, conversant with foreign languages, and knowledge of geography or foreign trade.
- Update regularly technical innovations in international freight forwarding for employees.
- In addition, companies need to have programs to support student internships, practical presentations on current industry activities in Vietnam and around the world for students. The company must have the specific material donations for training and professional support to universities if they want to recruit graduates from universities.
Appraising systematic employee performance
Appraising systematic employee performance not only helps eliminate low capabilities employees, increase the labor productivity but also clarify the goals of domestics LSPs.
Employee rotation
Large LSPs can rotate employees from branch to another branch periodically (depending on the job, usually 2 or 3 years 1 time). Rotation of staff will help to employees with a comprehensive view of the work in the company, reduce boredom, enhance exchanges and also help to share experiences and learning between branches and units in companywide.
Precise reward management
The logistics service enterprises should build wage modes and the long-term benefits for employees. Table job description should clearly specify on welfare, salary scales to be standardized, ensure fairness and long-term growth opportunities, increase employee satisfaction and enhance the stability of the team personnel.
Keep experienced employees
Keeping high quality employees depends on not only increasing salary, welfare but also creating comfortable work environment, and shows that in the future companies will develop well with the help of experienced employees.
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Computerized data management and logistics operations
In the area of logistics, computer is increasingly asserting its important position.
Implementing logistics processes requires a lot of work, many official documents, papers, and documents. As development of production, more cargo, more complex types, broad areas, demands on time, the amount of the processing of documents, quickness, and accuracy requires the help of computers. Thanks to computers, huge number of data are recorded and processed.
The logistics staffs are freed from the task of documentation services. Owing to the fast data processing to logistics, managers can make decisions promptly and properly.
Applications connecting network information with suppliers and customers
Applications connected to the network information provider and customers improve the speed and efficiency of input and output transactions. Using internet technology not only connect the needs of customers with the ability of LSPs to offer immediately but also create a modern business facilities, the fastest method to meet the requirements of customers.
In addition, many modern information technologies have to be applied in logistics companies, such as bar code technology (barcoding) that is the automatic identification technology enabling consistency to products and bringing them to the wire supply chain in a productive and efficient ways. XML (Extensible markup language) is encapsulation method to transmit information over the Internet.
Changing in the idea of e-business
Companies must change the fundamental perception of the role of the internet and electronic business (e-business), this is not just a modern media but also an advanced mode of business which have superior benefits and undeniable in the future. If LSPs want to compete and survive, they could not equip themselves with the basic knowledge about this type of business. In determining whether or not LSPs really want to become a company that is digitized, they need to change in the way of doing business via e-business for survival.
Support from government
Firstly, developing strategies and policies to support the logistics industry is a must, including the strategy to develop the fleet while increasing that capacity and market share of the
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domestic shipping companies; strategy to develop capable, professional logistics services and network to meet the needs of domestic shippers; developing capacity of insure companies in Vietnam; credit support to enterprises logistics.
Secondly, government has to improve logistics policies framework suitable for the development and trend of logistics nowadays. It will facilitate international trade while promoting the development of logistics services in Vietnam. Besides, necessary reform of customs procedures, electronic customs clearances, ecommerce applications, reform administrative procedures are required to create favorable conditions or environment for logistics service companies to cut costs and improve competitive niche.
Thirdly, investing and upgrading infrastructure facilities synchronously to meet the development needs of the growing logistics industry. Accordingly, it should establish more sea ports, high speed roads, warehouses, equipment and related institutions.
In addition, the VLA is responsible for connecting companies in related industry, creating the leading enterprises, sharing advantages to reduce logistics costs, creating healthy playground and high competitive in logistics industry, etc.
Finally, Government should support universities in building modern training programs, and developing human resources to meet requirements of logistics industry.
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Appendix A
Interview Questionnaires
Dear Sir/Madam,
My name is Le Trong Nghia, I am a student at Department of International Master of Business Administration at I-shou University. I would like to invite you take part in my research
“Factors affect the competency of domestic logistic Enterprise in Vietnam”, which concerns about factors enhance the development of domestic logistics services providers (LSPs) in Vietnam. The purpose of this study is to figure out the influence of business processes and standard operation procedures (BP&SOPs), human resource management (HRM), information and communication technology (ICT), Government policies on the development of domestic logistics service providers. The information obtained from interviews will be only used for research purpose. All the information will be recorded, transcribed and kept confidential. The interview will take about one hour. Interview may withdraw from the study at anytime and have the right to refuse to answer any question. The participation of interview in this study is voluntary and thesis is no payment for your joining.
Please sign this form to indicate that you fully understand all above contents and agree to take part in this research. Finally, please feel free to contact me if you have any question about this research. Thank you for your cooperation.
Signature: ...
Date: ...
Sincerely yours, Le Trong Nghia
IMBA Dept, I-shou University
Email: [email protected]
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Question 1: Can you describe briefly the situation of Vietnam domestic Logistics companies? What is their strong and weakness?
Question 2: What are the main factors that enhance the competitiveness of LSPs?
Question 3: Cutting trade and exemption of tariffs will intense liberalize commerce, Do you think domestic companies will make use of or be faced off by this process?
Question 4: Two main aspects of BP&SOPs are Process of increasing responsiveness which raises the ability to meet market and customer needs, and Process of increasing flexibility that enhance operational and service flexibility is vital for LSPs to meet customer fast changing need. Do these need for the development of LSPs?
Question 5: Do BP&SOPs affect to the development of Vietnam LSPs? Why?
Question 6: Reward management, performance management, training and development are three main aspects of Human resource management. Which one is the most effect to the LSPs competencies? Why?
Question 7: What are these weaknesses of Human resource management in Vietnam?
Question 8: Information and communication technology is the foundation for the development of LSPs, what reasons limit the development of ICT in LSPs?
Question 9: Did government policies have efficient influence on the competencies of LSPs? Is government support or internal forces more important in the development of LSPS?
Why?