The Vietnamese manufacturing industry has expanded rapidly in recent years, with an increase in new investments from companies, including foreign-affiliated ones. The entry of Japanese companies has been particularly active, with some data reporting that approximately 80% of these companies are in the manufacturing sector. Amidst this growth, procurement challenges have become apparent, such as “difficulty in predicting the quality and delivery times of local suppliers” and “inability to place bulk orders for high-mix, low-volume parts.”

Source: JETRO “Excellent Vietnamese Supporting Industry Companies”

Ohta Vietnam offers flexible procurement services to solve these practical challenges. By utilizing partner factories selected from JETRO’s list of excellent companies and our proprietary database, we provide one-stop support in Japanese, English, and Vietnamese, quality control compliant with ISO/JIS standards, and total cost optimization. For companies looking to diversify their procurement sources under a “China +1” strategy, we have established a system that allows them to safely and efficiently take the first step into procurement in Vietnam.

This article will explain the latest trends in the procurement environment in Vietnam and how to utilize Ohta Vietnam’s services, with concrete examples for purchasing and materials managers in the manufacturing industry. The purpose of this article is to provide hints for updating your company’s procurement strategy after reading it.

In recent years, Vietnam has been in the spotlight as the top candidate for the “China +1” strategy. As of 2024, the average manufacturing wage is equivalent to 304-340 USD per month, which is less than half of that in coastal China (hourly wage is 3 USD in Vietnam compared to 6.5 USD in China). Furthermore, tariff benefits can be enjoyed due to the effectuation of large-scale FTAs such as the CPTPP and RCEP. It is not uncommon for cases to see procurement cost reductions of up to 30% due to these factors. Against the backdrop of US-China friction and rising geopolitical risks, the demand for multinational diversification of parts supply chains is growing year by year. FDI into Vietnam in the first half of 2025 is at a record high of 11.7 billion USD, an 8.1% increase from the same period last year.
Source: VietnamNet “Vietnamese workforce sees more money in their wallets for 2024”, Vietnam News “Foreign investment inflows rise to $21.5 billion in the first half of 2025”

On the other hand, in high-value-added fields such as electronics and medical equipment, the ability to handle “high-mix, low-volume” and “short delivery times” determines competitiveness. In the areas surrounding Ho Chi Minh City, Binh Duong, and Hanoi, there is a growing concentration of small and medium-sized suppliers, such as those for automatic lathes and precision sheet metal, establishing flexible production systems. In fact, even local companies are seen to be setting up rapid prototyping windows and small-lot delivery services with fixed routes, proclaiming that “multi-variety, small-quantity production is the norm.” Source: Ohta Vietnam “Ohta’s Strengths”

In this environment, Ohta Vietnam brings together over 150 partner factories that meet Japanese quality standards, providing procurement, inspection, and logistics in a one-stop service. With support in three languages (Japanese, English, and Vietnamese) we share drawing verifications and anomaly responses instantly. Using quality manuals compliant with ISO/JIS and IoT visualization tools, we shorten lead times by an average of 30%. Our customers can order parts from multiple categories through a “single point of contact” and with a “single invoice,” achieving both procurement cost reduction and supply chain diversification simultaneously.

As of 2025, Ohta Vietnam collaborates with over 150 partner factories. Approximately 70% of them are listed in JETRO’s “Excellent Vietnamese Supporting Industry Companies” list, which we use as a primary filter. Furthermore, through our own audits, we only register companies that meet three requirements: “ISO 9001 certification,” “internal defect rate of 0.5% or less,” and “financial soundness (equity ratio of 20% or more).” We check the status of continuous improvement through annual re-evaluations and regular audits, minimizing quality risks for both new procurement and mass production ramp-ups.

Source: JETRO “Excellent Vietnamese Supporting Industry Companies”

85% of all registered suppliers have obtained ISO 9001, and 62% have obtained ISO 14001. We share drawings, process charts, and inspection reports in Japanese and English, and grasp “when, where, and who” in real-time with a traceability system linked to barcodes and IoT sensors. According to TechSci Research, the adoption rate of IoT sensors in the Vietnamese manufacturing industry is projected to grow at an average annual rate of 15% by 2028, with reported cases of quality defects being reduced by an average of 27%.

Source: TechSci Research “Vietnam IoT in Manufacturing Market 2024–2028”, Ohta Vietnam “Ohta’s Strengths”

When compared based on the “Total Cost of Ownership (TCO),” which includes not only the unit price of parts but also inventory interest, transportation costs, and inspection costs, procurement in Vietnam has been confirmed to have an average reduction effect of 17-32% compared to coastal China. In a case where a European home appliance manufacturer switched to procuring press parts in Vietnam via Ohta Vietnam, they achieved a 28% cost reduction and a 60% reduction in man-hours for handling defects compared to before.

Source: Vietnam Outsourcing “Balancing Cost and Quality: Overcoming Perceptions in Sourcing from Emerging Markets”

Ohta Vietnam employs a three-layer defense system of “dual suppliers + weekly risk reviews + IoT visualization.” Specifically, we secure backups with a two-company system (A and B rank) and visualize the on-time delivery rate monthly. The TACHAN report also recommends supply chain visualization and diversification as key risk mitigation strategies in Vietnam. On the quality front, we analyze digital records of in-process inspections with AI and issue automatic alerts when data outside the threshold is detected. In the 2024 fiscal year mass production projects, we maintained an on-time delivery rate of 97.8% and a first-pass yield of 99.2%.

Source: TACHAN “Risk Management in the Supply Chain: Importance and Mitigation Strategies in Vietnam”

Japanese medical device manufacturer Company A switched the procurement of precision machined shafts (3,000 pieces/month) from China to Vietnam. With the multi-process optimization proposed by Ohta Vietnam, they reduced setup change time by 40% and shortened the lead time from the previous 20 days to 14 days. The good product rate in the first year of operation reached 99.9%, and man-hours for defect analysis were also reduced by 35%. The quality assurance manager of Company A commented, “The biggest advantage is that they handle everything, including emergency orders, through a single point of contact.”

First, “visualize” your company’s current procurement flow and identify data such as part categories, order lots, lead times, and quality defect rates. Then, set KPIs based on the SMART principles, such as “On-time delivery rate of 95% or more”, “First-pass yield of 99% or more”, and “TCO reduction of 15%”, and decide on an evaluation cycle (e.g., monthly review).

Example Checklist

A procurement consultant from Ohta Vietnam will participate to align on drawings, standards, required quantities, and inspection criteria in Japanese/English. Here, special requirements such as “variable lot sizes” and “sharing of in-process inspection data” are clarified, and the optimal partner factories are narrowed down to 2-3 companies. At the end of the workshop, the agreed-upon KPIs and a work breakdown table (RACI chart) are documented, and risks and countermeasures are agreed upon.

Order prototypes with the minimum lot size and conduct a comprehensive evaluation using the checklist below.

Pilot Evaluation Checklist

If any items cannot be cleared, confirm corrective actions and either re-prototype or switch to another factory.

After the mass production launch, monitor KPIs in real-time on Ohta Vietnam’s IoT dashboard. Data on temperature, vibration, and processing time collected from in-process sensors are analyzed by AI, and abnormal values are automatically notified via email and LINE WORKS. According to TechSci Research, companies in the Vietnamese manufacturing industry that have introduced IoT visualization have reduced their defect rates by an average of 27%.
Source: TechSci Research “Vietnam IoT in Manufacturing Market 2024–2028”

Ohta Vietnam has established bases in Ho Chi Minh City/Hanoi and a Japan support desk, enabling immediate response within a 1-2 hour time difference. Drawing changes and express orders are deployed from Japanese to Vietnamese to the factory floor within 10 minutes, and the latest version is simultaneously uploaded to a shared cloud folder. This minimizes misunderstandings due to language and cultural differences, achieving both shorter procurement lead times and trouble prevention.