Bringing Business to Vietnam

Today was quite a busy day. We visited two separate but related companies. In the morning we visited Vietnam Singapore Industrial Park. VSIP is a developer of integrated industrial parks and mixed use areas in Vietnam. Specifically, VSIP supplies industrial land and buildings to companies that wish to get production started very quickly. Moreover, VSIP provides the companies with access to schools and residential areas to meet the needs of employees. The other important piece of VSIP is hinted at in the name of the company: Singapore. VSIP has established a system that allows all production and manufacturing to occur in Vietnam while much of the business related tasks are done is Singapore. The government of Vietnam has encouraged such partnership between Vietnam and other countries in the hope of furthering development.

Our company visit in the afternoon was to II-IV. This company has its headquarters in Pennsylvania, but since its founding in 1971, II-IV has expanded its production across the globe. Specifically, II-IV opened production facilities in VSIP’s industrial park located in Vietnam. II-IV specifically came to Vietnam in pursuit of inexpensive labor and rapidly expanding markets. In Vietnam, II-IV specializes in the production of optical pieces, semiconductors, and other parts for lasers. II-IV is especially impressive because they are a vertically integrated company meaning they control all parts of the production process. Thus, II-IV has developed an efficient process to produce large numbers of similar products. To make the process as efficient as possible, II-IV puts a heavy emphasis on the training and education of their employees. The first employees were originally hired from a local technical school and given further training tailored to the job. The employees are now asked to take tests to ensure proficiency of understanding of their jobs. Once again, this ensures the most efficient and safe production. II-IV also faces some challenges with the workforce. In the first few years of production in Vietnam, the employee turnover rate was nearly 50%. This was due to employees traveling home for the holiday of Ten and never returning to work at the factory. However, management has discovered ways to support and care for the employees so they want to come back after holidays. The support includes 13-month bonuses, variable bonuses, trasportation allowance, and housing allowances. With some adjustments to the culture in Vietnam, II-IV has become one of the most successful companies in VSIP’s industrial park.

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