Day 8: II Company Visits and VI More Days (Including Today) – 5/13/19

Today started off with a quick breakfast of vegetables, papaya, watermelon, and sweet bread. The papaya was so good! Then, we took a bus ride to Vietnam Singapore Industrial Park (VSIP). They build and design integrated industrial parks with places for people to live, learn, eat, shop, and work. This model works well for developing countries because it provides everything that a city needs to develop in one place. VSIP has allowed Vietnam to develop greatly because it has brought so many global companies to it and has helped to raise the standard of living for the population. This company is unique in that the government of Vietnam and the government of Singapore created a contract to work together to develop VSIP’s parks. They did this because Singapore had a lot of money to invest but little land to expand and Vietnam had plenty of land and a need for investment. This partnership demonstrates the globalization of Vietnam because it shows that Vietnam can successfully interact with other countries in order to improve itself. These deals can be difficult because the governments need to work together, so they are not as common as businesses partnering on their own. Vietnam benefits from this partnership because it allows them to further develop their country and bring in foreign investment. If the companies based in Vietnam succeed, more investment will flow to Vietnam. In addition, it raises standards in Vietnam because VSIP must be compliant with Singapore building standards. VSIP also improves development by complying with government standards for the environment. It integrates water filters and uses solar panels for some lighting, thus making it sustainable. After this site visit, we went to a mall near VSIP, where we got to shop a bit before lunch. Walking around, I saw many stores that are popular in or based in different countries. This demonstrates that Vietnam is becoming increasingly global and reliant on these companies in the economy. I got some delicious taro milk tea while there, and we went to a book store with the cutest stationery. After shopping around and buying a few things, we went to lunch at an udon place. Unfortunately, I was not able to figure out what kinds of meat were in certain things so I played it safe with plain udon. It was such an odd change from the usual flavorful food that I’ve been getting. After lunch, we visited II-VI, which is located in VSIP. II-VI is a manufacturing firm located worldwide. At the Vietnam branch, it focuses on photop, specifically TEM and Marlow and Mcubed. TEM is used to cool down electronics and keep them at a stable temperature. It was incredible how small all of the pieces were and how precise it was. I was surprised that there was actually a lot of the production process that wasn’t automated. The automation is something that II-VI is working towards but has moved slowly due to low labor costs. However, there are downsides to using manual labor. Employees could leave if they get bored of doing the same exact thing every day. II-VI combats this by using promotions and lessens the impact by having one person only do one thing. Since it is fairly easy to train people, high employee turnover isn’t as severe as a problem. In addition, the machines that they do use are very specific, so expanding their product mix is difficult. II-VI chose to build a plant in Vietnam because of low labor costs, little local competition, tax incentives, and its experience with VSIP’s model. The company is able to increase its profitability through its expansion and allows it to further globalize itself. Simply by globalizing itself, II-VI helps to globalize all of Vietnam because it brings more investment and adds exports to the economy. The production of II-VI’s products is interesting because it relies on the customer. The customer must design what they want, and then, II-VI makes it. This design is a part of the company’s intellectual property, so II-VI can’t sell it to others. This could potentially prevent II-VI from growing and innovating because its process is heavily reliant on other companies. Each part of the process must be done very carefully since the parts are so small and delicate. Tons of each design are made and then shipped to the corresponding company. After seeing the process in action, I feel that I understand why the whole process can’t be automated. Since the pieces are so small, it is probably cheaper and easier to train a worker to put it together. Also, since the training is fairly simple, there seems to be a small learning curve. After the visit was over, we headed back to the hotel for a quick break before Korean barbecue for dinner! The time is flying so quickly here; I can’t believe we have less than a week left.

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