Watch: VinFast's Praveen Durairajan Prakash on global expansion and supplier collaboration
Praveen Durairajan Prakash, global component and supply quality director at VinFast, discusses VinFast's plans to expand globally and within the ASEAN region, its biggest pain points as it grows and its cost-competitive sourcing strategy.
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In recent years, Vietnam has positioned itself as one of the fastest developing automotive markets in South-East Asia, and the country's top vehicle maker VinFast has ambitious growth plans of its own. Speaking on the Red Sofa at Automotive Logistics & Supply Chain ASEAN, Praveen Durairajan Prakash, global component and supply quality director at VinFast, outlined some of the company's key pain points as it grows and how it works with its suppliers to build resilience and support growth.
Growing pains
"Scaling our volumes will remain our top priority for this year and upcoming years as well, as we are expanding globally, as well as within the region," Prakash said. "When I say scaling, it's not just the quantity of products, it's also the quality and the reliability of the products and the suppliers that we work with."
But this rapid growth does not come without its challenges. Prakash identified speed as VinFast's greatest pain point at the moment. "As a company, we are very fast but [because of] the pace at which we are evolving, some suppliers are not able to catch up with our pace," he explained.
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The speed Prakash referred to does not only relate to production, but also to problem solving. He acknowledged a "capability gap" in the local supplier base. "There is a traditional lag in the problem solving approach," he noted.
He explained that bridging this capability gap in the local supplier base "needs to be addressed" in order to strengthen resilience. The second action Prakash pointed towards as a key factor for improving resilience was "challenging the traditional lead times... for any activity", whether that be in production or problem solving.
A mindset change is necessary to achieve this, Prakash said, claiming that shifting to a culture of addressing issues within 24 hours will build resilience in supply chain. "I think its more important to have resilience built from within than to expect the world to be kind to us," he said, referencing some of the recent external disruptions to supply chains, from geopolitical tensions to natural disasters.
Supplier collaboration
Eight years ago, Prakash said, VinFast's suppliers were based all around the globe, but today the company has more of a strategic focus on regionalisation. "From where we started to where we are today, we have progressed from global West-to-East sourcing to a more focused in-region sourcing," he explained. This decision, he said, was primarily driven by cost, noting that cost competitiveness is important in order to attract customers.
Describing suppliers as an "extra pair of arms" for OEMs, he explained that the relationship between OEMs and suppliers is symbiotic. He shared how, to ensure resilience, Vinfast works closely with suppliers from development to approval to production, as well as getting involved in the operational planning and the sub-tier sourcing strategy of suppliers.
"There are two things I look for in suppliers: one is transparency... the second thing that I look for is commitment," he said. The ability and willingness to share bad news early, alongside a "long-term partnership mindset", are things Prakash values greatly in a supplier.
