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Tag: factories

  • Factories reduce work hours with eye to employees’ well-being

    Factories reduce work hours with eye to employees’ well-being

    Many factories in Ho Chi Minh City have been reducing workers’ weekly hours below the legal maximum of 48 to give them more time for themselves without compromising their income.

    When the end-of-shift bell rings at 4 p.m. at a factory belonging to industrial sewing machine producer Juki Vietnam in District 7’s Tan Thuan Export Processing Zone workers have five minutes to clean and organize their work area before leaving.

    Nguyen Thi My Linh, who has worked at Juki for 28 years, said until a few years ago her shift used to be the standard 7:30 a.m. to 4:30 p.m. every day except Sunday with 70 minutes for lunch and two other breaks.

    But after workers expressed difficulty in picking up their children, the management agreed to shorten their shift by 25 minutes.

    “Getting off early helps me avoid traffic and gives me enough time to pick up my child in Nha Be District, take them home and then to District 5 for tutoring,” Linh says.

    Nguyen Phuoc Dai, chairman of the company’s labor union, says employees also get two Saturdays off per month after they said they did not have enough weekend time with their families, which has reduced their week to less than 44 hours.

    The maximum allowed by law is 48 hours, not including overtime.

    Dai noted that the company did not reduce wages or income when it cut the work hours, and instead invested in technology and optimized production processes to ensure productivity.

    An Thien Pharmaceutical Corporation in Nha Be’s Hiep Phuoc Industrial Park similarly used to have a 48-hour week before switching to 44 hours in the past decade.

    Its director of human resources, Le Dinh Chi, says the change came after the labor union forwarded workers’ wishes for shorter hours.

    “Reducing working hours is a way for management to show concern for the well-being and families of employees.”

    The company’s 450 workers earn an average of VND13 million (US$530) per month.

    According to the city Trade Union of Industrial and Export Processing Zones, Juki and An Thien are among more than 20 manufacturing businesses in the city’s industrial parks and EPZs that have moved away from 48-hour weeks.

    Some have even reduced it to 40 or give employees three Saturdays off every month, it says.

    Vu The Van, its president, says these firms’ decision to shorten the work week is commendable since it is recommended but not mandated by current regulations.

    Reducing work hours is also a strategy for businesses to retain employees amid a growing labor shortage in the manufacturing sector, as workers with more time for themselves and their families tend to feel happier and more motivated to remain loyal to the company, she says.

    Concurring, Thanh Nguyen, CEO of human resources consulting firm Anphabe, says a survey by her company found that time-related benefits and work arrangements are the biggest concern for 63% of workers while only 24% of them reported being satisfied with their working hours.

    The 2020 Labor Force Survey by the General Statistics Office found that nearly 41% of workers nationwide clock in 40-48 hours per week, 30.9% log 49-59 hours and 7.5% work 60 hours or more.

  • Factories in southern Vietnam struggle to hire workers

    Factories in southern Vietnam struggle to hire workers

    Many factories in southern Vietnam are having trouble hiring workers since prospective candidates prefer jobs that require low commitment and offer flexibility.

    Vietnam Samho, a footwear supplier to Nike, has needed 1,500 workers in the last two months for its plant in HCMC’s outlying Cu Chi District but has been able to recruit only 300.

    “It is stressful to be a human resources employee these days as hiring is increasingly difficult”, Nguyen Thanh An, chairman of the company’s labor union, said.

    An and his team have been traveling around southern Vietnam to hire people at a salary of VND7-8 millio (US$275-314) a month. The company is also willing to pay for their transportation to HCMC.

    But they have still struggled to complete the hire even as the company’s orders are increasing.

    The HCMC Center For Employment Services said last month 49,000 jobs were available but only 8,500 people applied. Almost 60,000 signed up for unemployment benefits, its data shows.

    “There is increasing demand for workers at factories but it is a challenge to find people willing to work,” Nguyen Van Hanh Thuc, director of the center, said.

    Some companies need thousands of workers and have increased their maximum recruitment age to 40 or 45, but still only a small number of candidates are applying, she added.

    HCMC’s neighboring industrial localities such as Dong Nai and Binh Duong provinces are also facing similar struggles to recruit workers, especially their garment, footwear and wood products sectors.

    Binh Duong data shows that over 3,200 companies sought 41,000 workers in the first five months.

    Dong Nai factories last month needed 10,700 workers but there were not enough candidates. Thuc said young people nowadays prefer jobs with high flexibility such as ride-hailing and delivering.

    The increasing number of factories in provinces also dissuade people from moving to big cities where living expenses are higher, she added.

    An said there is a perception that rural areas are “safer” after many workers were stuck in cities during the Covid-19 pandemic, and so many choose to live in their hometown.

    Nguyen Duc Loc, head of the Institute of Social Life Research, said the changing economy is creating new kinds of jobs which make people feel there is no point in making a long-term commitment to a factory which could lay them off any time.

    Many therefore prefer short-term jobs, he said.

    “Workers are more selective in choosing a factory now.”

    Businesses that laid off people quickly in the past would now struggle to hire workers, he added.

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  • Factories find ways to deal with decreasing exports

    Factories find ways to deal with decreasing exports

    Finding new and niche markets is how factories cope with the fall in export orders.

    After seeing orders from Europe plunge by 70% in recent weeks, shoemaker Chang Shuen in the southern province of Binh Duong quickly turned to the U.S., a market it has yet to pay attention to for nearly a decade.

    According to Doan Sy Loi, its CEO, the prices of products made for the U.S. market are always at least 15% lower than for the European market.

    When exporting to Europe, Chang Shuen only needs to make 5,000 pairs of shoes a day to turn a profit, but needs 6,000-6,500 pairs in the case of the U.S., he said.

    “During difficult times I have to do more to make a profit.” However, one advantage is that orders from the U.S. are five to 10 times larger than from Europe, he said.

    He added that the larger volumes attune workers, making production smooth and speedy. Garment company Dony in Ho Chi Minh City recently sent executives to the Middle East to meet and negotiate with wholesalers for big brands, its director, Pham Quang Anh, said.

    If the price is good, importers are willing to order in bulk and take delivery over one or two years, he said. “I offered a lower price than before. They immediately agreed to increase the order quantity by 300%.”

    With the extended delivery time, the factory could better manage its production schedules, he said.

    Often it had to buy raw materials at short notice and thus high prices, he said. Workers had to work overtime, increasing labor costs, or the factory had to hire causal labor with poor skills, often resulting in faulty goods.

    Pham Xuan Hong, president of the HCMC Association of Garment-Textile-Embroidery-Knitting, said many businesses are also looking for niche markets and new partners.

    They are developing green products from recycled materials, and targeting high-end segments and customers.

    He expects orders to recover by 90% by the end of the third quarter.

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  • Chinese speakers in demand as factories expand

    Chinese speakers in demand as factories expand

    Solar panel manufacturer Jinko Solar Vietnam in the northern province of Quang Ninh is looking for 5,000-8,000 workers, with most of them required to have basic Chinese communication skills. So far, less than 1,000 have been hired.

    “Manufacturing workers, technicians, quality control managers, we need them all. But not many suitable candidates are available,” said Dang Tran Hoang Anh, an HR officer with the company.

    As one of the world’s largest solar panel manufacturers, Shanghai-based Jinko entered Vietnam in 2020, and is looking for people in 40 different job categories to make high-quality products that are shipped to Europe.

    Anh said that Jinko pays well above average wages to secure the best talents in Vietnam. He just hired a worker who can speak Chinese fluently for a monthly salary of VND29 million ($1,263), 70 percent higher than what she was being paid at her old company.

    “We want the best Vietnamese workers who can communicate in Chinese to complete many projects.”

    Jinko is one of many companies that are scrambling to find Chinese-speaking Vietnamese workers as they set up factories in Vietnam to take advantage of the country’s low labor cost and export potential. Higher costs and risks in China, including its trade war with the U.S., motivated companies from many countries to make a shift to Vietnam.

    Taipei-based electronics manufacturer Wistron Infocomm in the northern province of Ha Nam is recruiting people for 10 job categories including project management consultants, procurement officers and engineers, with most of them required to have basic or fluent Chinese language skills. Car tire manufacturer Jinyu Tires in the southern province of Tay Ninh is looking for 50 students who can speak Chinese for a training program to find the best future employees.

    Popular recruitment platforms VietnamWorks and JobStreet have 140-200 job postings for Chinese-speaking candidates, mostly as procurement officers, quality control managers and engineers. The recruitment rush for Chinese-speaking workers began at the end of last year and grew stronger in the first quarter, with strong demand seen in northern industrial hubs, said Ngo Thi Ngoc Lan, northern region director at recruitment firm Navigos Search.

    The provinces of Bac Ninh and Bac Giang have a large supply of workers who can speak Chinese, but companies are seeing strong competition for them, she said. In the provinces of Phu Tho and Quang Ninh, there is less competition but it is more difficult to recruit high-skilled workers, she added. China has consistently been among the top 10 foreign direct investors in Vietnam in recent years.

    Mainland China ranked fourth in registered capital in the first four months at over $1.07 billion, while Hong Kong and Taiwan secured the seventh and eighth places. Together, the three territories registered $2.1 billion in capital, second only to Singapore at $3.1 billion. China’s Goertek Vina, one of the key suppliers for Apple, increased its investment in Vietnam by $306 million to over $565 million this March.

    The company had nearly 28,000 workers in its plant in the northern province of Bac Ninh as of February, up from an average 23,000 last year. Another 5,000 jobs will be added when its plant in the central province of Nghe An begins operations in June, and by 2023, it will have 30,000 employees. Another Apple supplier, Foxconn, said last year that it would pour an additional $700 million into its Vietnam operations on top of its $1.5 billion investment.

    Lan said that U.S.-China tensions, which began several years ago, have pushed many Chinese companies to move to Vietnam, generating a large demand for local employees. Chinese employees have higher requirements than Vietnamese peers in terms of salary and benefits, so it is more cost-effective to hire Vietnamese, she added.

    She predicted that the trend of recruiting Chinese-speaking Vietnamese in factories will keep rising for at least five more years.

    “This will surely encourage workers and students to learn Chinese as they see the career potential.”

    At present, however, finding Chinese-speaking Vietnamese people is not easy. Anh of Jinko said it was difficult to find suitable Chinese-speaking candidates because many do not want to move from Hanoi to Quang Ninh to work.

    “We have to train most candidates, either in Chinese or in their professional skills, to get the people we need.”

    Lan said that companies are also seeing challenges in recruiting because candidates either have the professional skills and lack language fluency or vice versa. Some companies also want employees to be able to speak English, she added.

    Chinese firms offer salaries that are 40-50 percent lower than European and American companies, while requiring employees to work on Saturdays. These are some drawbacks that discourage candidates, she said.

    Jinko Solar Vietnam used to have Chinese nationals account for 70 percent of its employees in Vietnam, but the company has reduced the ratio to 50 percent now, because Chinese staff often work for six to 12 months and return to home. The factory, meanwhile, needs long-term personnel.

    “We are offering salary of up to VND70 million a month for some directors’ jobs, and we only want Vietnamese candidates.”

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  • Smart factories: The future of Asia’s manufacturing hub

    Smart factories: The future of Asia’s manufacturing hub

    Manufacturing is one of the key pillars of economies in the Asia Pacific (APAC) region. According to GlobeNewswire, APAC is the largest general manufacturing market in the world, accounting for 43% of the global market. With the advent of the Industry 4.0 revolution, the world’s largest manufacturing hub will experience significant shifts as connectivity becomes the backbone of next-generation factories, where artificial intelligence (AI), machine learning, cloud computing and the Internet of things (IoT) are being embraced to unleash technology-driven smart manufacturing.

    Founded on the interconnectivity of machinery sensors and intelligent systems, the Industrial IoT (IIoT) adds intelligence to traditional manufacturing processes and management. Smart manufacturing solutions help to connect, automate, analyze and monitor equipment and processes to yield informed decision-making, maximize operational efficiency and improve product quality. Advanced IIoT solutions offer real-time data and meaningful insights that accelerate response time to raise overall productivity and sustainability.

    Factories are moving towards real-time capabilities, virtualization, decentralization and modularity to facilitate productivity, precision and agility. At the heart of this revolution are 5G networks that deliver reliable, high-speed connectivity, greater bandwidth to accommodate massive data traffic, extremely low levels of latency between devices, network slicing for virtual separation of networks and mobile edge computing (MEC) to facilitate edge computing. As a key enabler in smart factories, 5G together with IoT bring about innovative technologies such as automation, collaborative robots (cobots) and real-time remote monitoring.

    In 2020, the global smart factory market was valued at USD270.74 billion. According to Mordor Intelligence, this value is estimated to reach USD461.82 billion by 2026 – representing a CAGR of 9.33% during this period. During which, APAC dominates the market owing to increased foreign direct investment and industrial development. In conjunction with the deployment of 5G in countries, governments in the region are also encouraging smart manufacturing adoption through policies and assistance.

    As one of the earliest adopters of 5G innovation in the world, and an economy that relies heavily on manufacturing, South Korea unveiled a plan last year to leverage 5G and AI to roll out smart factory solutions alongside telecom providers to the country’s small and medium-sized businesses. The aim is to have 30,000 factories by 2025.

    In China, where manufacturing accounts for about 38% of the country’s gross domestic product (GDP) in 2020, and the world’s largest manufacturer in terms of output, strategies are in place to tap on advanced manufacturing to grow its position into a manufacturing superpower. Initiated in China, the “Made in China 2025” 10-year government plan was rolled out in 2015 to focus on rapidly developing the country’s manufacturing capabilities critical to its fourth industrial revolution. Reinforcing its efforts, China revealed a more comprehensive plan on 5 March 2021 as part of a new 5-year plan to enhance its manufacturing capabilities by 2025.

    Currently, smart manufacturing is adopted more widely in industries that emphasise high-volume and low-margin production. It is also deployed in highly-regulated industries such as the pharmaceutical and food and beverages industries, where tracking and traceability are critical. Entire value-chain processes can be automated to rely on robotic inspections, for instance, to reduce human errors. With automated inspection processes, smart factories harness machine learning and AI to accurately detect defects.

    Increasingly, innovations are focused on areas such as predictive maintenance, remote monitoring and control, real-time supply chain management, advanced process control and quality management.

    Using a network of IoT sensors, CCTVs and thermal imaging cameras, equipment wear and tear can be determined ahead of time to prevent disruption to production lines. In the event of failures, engineers from across locations can leverage remote augmented reality (AR) to troubleshoot problems so that maintenance can be carried out as promptly as possible to reduce downtime and eventually costs. Blockchain is also becoming relevant for manufacturers as the technology fosters transparency and accountability throughout the supply chain as massive information is shared simultaneously across large quantities of devices.

    Last year, disrupted supply chains owing to global lockdowns placed a tremendous strain on the manufacturing industry to respond to volatile market demands. Yet, manufacturers with fully-automated production lines that relied on AI, big data and remote operations managed to cope better. Manufacturers also saw the benefits of cobots working alongside humans, with cobots performing more repetitive tasks while humans attended to important decision-making to better respond to disruptive trends and deliver more optimal products.

    With 5G networks being critical to the digitalisation of the manufacturing industry, many tech providers are already expanding into the 5G space to provide private 5G networks. For telecom operators, this means tapping on its expertise to generate new revenue streams. Instead of simply providing manufacturers the 5G network capacity and connectivity required to power smart factories, telecom operators are partnering with strategic service providers to assist manufacturers in adopting transformation technologies that future-proof their processes.

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