Recommendations to remove supply chain disruptions

Prof.PhD. Dang Dinh Dao|17/11/2021 14:00

(VLR) Besides direct impacts from the pandemic of COVID-19, the current supply chain disruption has had many reasons that need considering. And to recover it, there should be many promptly long-term solutions from the Government management agencies.

Identifying reasons

First, for a long time, development policies have often encouraged investment attraction to develop production, expand according to scale and to quantity... while the stages of distribution, circulation, consumption and logistics stages for production and for improving goods values have not been given due attention. This makes the cost higher, and in the market of nearly 100 million people, many segments have been left alone for many years and goods from across the border have caused difficulties for domestic enterprises. The disruption among production and logistics has happened at the stage of strategy planning in most ministries and localities.

Second, we have had no due attention of building connecting infrastrucutes (logistics infrastructure- logistics center, logistics industry parks) in building and expanding national roads, expressways and economic corridors. The proper existence of logistitics centers on economic corridors will reduce accidents and all inadequacies… it also help remove unplanned stops that badly affect traffic security and save costs of compensation when there are needs to improve or expand national roads as well.

Third, in the provinces and big cities across the country, especially when an enterprise, company or agency moves to the suburbs or when implements the policy of “exchange land for infrastructure”... the construction of a series of apartment buildings and urban areas in recent years has not taken into account the overall logistics of transport infrastructure, drainage infrastructure, school system and even amusement parks for children and residents… This has led to many inadequacies in sustainable development as congestion, traffic accidents, flooding..., which have been increasingly serious in many localities and cities.

Fourth, transport is a logistics activity that has a special role in promoting sustainable developments. Vietnam has had all types of transport as seaway, railroad, road, airway and tubeway… However, we have paid too much attention in policies that develops road transports: implementing BOT projects, rushing in building seaports, expressways and airports but we have been in shortage of investments in consolidating roads, synchronous connecting roads, national railroads, railroads connecting seaports, waterways and especially in building logistics centers to develop multi-modal transport and industrial logistics parks serving production, which hinders product consumption and impor-export of localities and enterprises and causes disruption in cases of disasters and epidemic.

Recommendations to limit the supply chain disruption due to the epidemic of COVID-19

Regarding the immediate solution to overcome the “breaks” right in the thinking and development investment policies that disrupt the supply chain:

It is necessary to have a logistics mindset right in the planning and implementing the COVID-19 prevention strategy to ensure adequate synchronous and timely physical and human factors to prevent the epidemic in all situations. The COVID-19 prevention strategy must be accompanied by a logistics strategy in all scenarios.

The Government and ministries need to review to promptly supplement policies to develop logistics directly for production, consumption and epidemic prevention. It is necessary to have a drastic policy to mobilize the entire logistics infrastructure such as: freight transport North-South railway, waterway, and seaway that have not been effectively exploited for a long time, mobilizing all resources of the national reserve participating in goods supply and epidemic prevention activities in southern localities, including activities to support consumption and stockpile for products in the region.

Prioritizing the policy of connecting goods circulation in the context of supply chains being disrupted by COVID-19 in the region. Organizing and scientifically managing flow of goods transported in service of epidemic prevention and control, ensuring that the consumption and import-export activities of goods has not been disrupted due to inconsistency caused by measures of epidemic control in different localities: red channels and green channels.

Accelerating community immunity for logistics personnel in the national econoy by promoting faster vaccination to the group of workers: strengthening logistics human resources and having timely incentive policies for those working in fields of transportation, warehouse, sales and delivery…

The Government, ministries and localities should continue to promote the COVID-19 prevention and control movement across the country in the spirit of “fighting the epidemic like fighting enemies” at a higher and more drastic level; there should be policies to promptly encourage frontline staff: having timely recognition and reward at the highest level for those with meritorious services and sacrifices on the front lines as in previous wars against foreign invaders.

Long-term solutions

The Government and ministries should perfect logistics legislations and institutions to create a favorable legal basis for logistics activities in markets in all situations.

There should be comprehensive renovations to the National Reserve System for further enhancements of its role, mission as a national reserve tool in the logistics system in facing unpredictable changes.

There should be supplements and completions of the policies of developing logistics enterprises by implementing incentive mechanisms and policies to encourage developments of these businesses with all types of transport.

There should be incentive policies for enterprises investing in modernization of means of transport, especially means of road transport (automobiles), railroad and waterways which have been already outdated. Investing in the development of logistics infrastructure, especially giving priority to the implementation of the North-South high-speed double railway project and the railway connecting the Mekong Delta; building logistics centers with synchronous and modern cold storage and deep processing systems in large production areas and also on economic corridors of National Road 1A, Ho Chi Minh road, and highways...; accelerating connection of national railways with international seaports, economic corridors through international border gates with China, Laos, Cambodia,...; The next phase is to build logistics industrial parks and logistics clusters across the country to connect localities and economic regions in order to effectively implement economic linkages, effectively exploit economic corridors across the country, aming towards building the logistics real estate market in Vietnam, promoting circulation of goods in all situations...

The logistics environment should be improved from mechanisms, policies, logistics infrastructures, logistics provider system and from markets to enterprises using logistics services to ensure sustainalbility of supply chains in the context of the pandemic and natural disasters.

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Recommendations to remove supply chain disruptions