Enterprises to enhance links to prevent future disruptions to supply chains

Some 81% of members of the Vietnam Business Council for Sustainable Development (VBCSD) will strengthen sectoral links to prevent their supply chains from suffering any future disruption caused by a disaster similar to the COVID-19 pandemic, a survey has found.

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The textile sector is among those hardest hit by the COVID-19 pandemic. (Photo: VNA)

The survey was conducted by VBCSD to explore how domestic enterprises are doing amid the pandemic and based on this, it made recommendations for the Government to develop a medium- and long-term response strategy associated with the National Action Plan to implement the 2030 Agenda for Sustainable Development Goals (SDGs).

Most enterprises have posted sharp declines in revenue as COVID-19 has damaged exports and triggered a shortage of materials, said VBCSD Vice President Nguyen Quang Vinh, who is also Secretary-General of the Vietnam Chamber of Commerce and Industry (VCCI).

Enterprises must therefore prepare new suitable business plans that integrate urgent short-term issues with medium- and long-term strategies, he said, adding that after the pandemic ends, global supply chains will soon be restructured and repositioned.

The survey also revealed that 31% of respondents said they have focused or will focus more on the domestic market and reduce dependency on certain foreign markets.

Vinh added that many respondents said they will accelerate e-commerce and digital transformation to become less dependent on traditional markets and conventional ways of doing business.

Their first task, however, is to cut costs and postpone investments in non-essential items.

VBCSD President Vu Tien Loc said a sustainable development strategy would benefit businesses in the long run as it would help them strengthen their resilience in any circumstance, particularly in the face of COVID-19.

Vinh suggested enterprises diversify their suppliers rather than prioritising the boosting of efficiency. They should establish a network of short-term suppliers in addition to those with long-term contracts and at the same time, develop risk management scenarios for their supply chain and adopt more flexible and streamlined production plans.

The VBCSD also proposed the Government develop a legal framework to facilitate sustainable development. It should formulate and implement plans for improving sustainable corporate governance in 2021-2025 and the national programme to support the business community in promoting the circular economy in Vietnam from 2021-2030.