Introduction
This article provides a practical guide to mass-producing aluminum die-cast parts in Vietnam, aimed at procurement managers and manufacturing executives. The main themes are: 1) strategies for local production that balance both cost and quality, 2) supplier evaluation and SCM design, and 3) risks and countermeasures based on specific case studies. Success and failure cases are presented with numerical data, and foundational information such as the latest minimum wage revisions and FTAs (EVFTA/RCEP) is reflected in the Data Box. This article covers mass production projects for small to medium-sized parts, primarily ADC12, including secondary processing and inspection. Please use the checklist in this text to confirm key points from initial audits to mass production transfer, and utilize it as a decision-making index for your own projects.
Why Choose Vietnam for Aluminum Die-Casting
There are four main reasons why Vietnam is chosen: 1) Cost, 2) Quality, 3) Logistics, and 4) FTAs.
First is Cost. Although the regional minimum wage was revised by an average of +6% on July 1, 2024, it is still possible to reduce total costs—including mold amortization, cycle time, and transportation—by combining process design and automation. From a currency perspective, fluctuations in JPY and USD can be stabilized by promoting VND-denominated contracts and localizing parts and materials.
Next is Quality. The adoption of IATF 16949 (the quality management standard for the automotive industry) has become widespread, creating an environment where it is easy to integrally manage mold maintenance, gate optimization, and in-process X-ray/CT inspections.
In Logistics, by utilizing objective indicators from the LPI 2023 and leveraging the Cai Mep-Thi Vai deep-water port complex in the south, it is easier to secure direct shipping routes, thereby reducing the number of transshipments and shortening lead times.
Finally, there are FTAs. The EVFTA (effective August 1, 2020) and RCEP (effective January 1, 2022) offer tariff benefits and the ability to utilize regional cumulation.
By designing these four elements concurrently, the reproducibility of achieving defect rate reduction × lead time shortening × total cost optimization can be enhanced.
Local Procurement × SCM Design
The benefits of local procurement can be summarized in three points: 1) Cost Reduction (TCO = mold amortization + cycle time + yield + inventory + transportation/tariffs), 2) Lead Time Shortening (parallelizing internal and external work, and short-distance transport), and 3) Stabilization (securing local inventory and alternative suppliers).
First, define the line between in-house production and outsourcing. For example, a policy might be to handle casting condition optimization, mold maintenance, and key measurements in-house, while outsourcing special surface treatments, and using a mix of in-house equipment and certified external partners for X-ray/CT depending on volume.
For quality and supplier development, run a short cycle of process audits → CP/Cpk → PPAP (Production Part Approval Process) Level 3 → first article approval → mass production monitoring. CTQs (Critical to Quality characteristics) such as gate position, mold temperature, and filling pressure should be linked to the BoM (Bill of Materials) with numerical tags, and an 8D process should be used to correct any abnormalities.
For procurement and logistics, management can be stabilized by setting KPIs such as OTD (On-Time Delivery) of 95% or higher, ASN (Advance Shipping Notice) accuracy of 99% or higher, and CFS (Container Freight Station) cutoff compliance of 98% or higher. Absorb demand fluctuations with a monthly S&OP (Sales and Operations Planning) process, and recalculate safety stock based on the standard deviation of demand and replenishment lead time. It is also effective to set KPIs for VAS (Value-Added Services) standard times and the completion rate of pre-customs clearance documents.
Data Box (Primary URLs & Key Points)
- Minimum Wage (Regions I-IV): Revised on July 1, 2024 (Example: Region I – 4,960,000 VND/month)
- EVFTA Effective Date: August 1, 2020
- RCEP Effective Date: January 1, 2022
- LPI 2023: An international logistics index comparing 139 countries (Please refer to the list of sources in the original text)
Case Study ①: Daiwa Keikinzoku Vietnam
Our company operates an integrated system that covers everything from mold design and fabrication → casting → secondary processing (cutting, tapping, polishing) → surface treatment → inspection. Molds are designed through Japan-Vietnam collaboration (DFM/flow analysis), and initial trials are conducted locally. The casting process is centered on ADC12 and combines shot blasting, deburring, CNC machining, leak testing, visual and dimensional inspections, and X-ray/CT as required. Auxiliary materials, jigs, and cutting tools are, in principle, sourced locally, with special materials from designated Japanese suppliers used concurrently.
As a result, we have consistently achieved a 20-30% reduction in lead time and a 15-25% reduction in transportation costs after the start of mass production by consolidating sea freight. We also level out currency sensitivity by switching part of the pricing formula to a VND-denominated basis. By standardizing processes with documents (part number management, condition sheets, maintenance standards) and repeatedly performing early detection and correction of initial defects, we achieve a stable reduction in mass production PPM.
Major Milestones for Mass Production Transfer
- Kick-off: Align requirements / Define CTQs
- DFM & Analysis: Gate, overflow, and cooling design (5-10 business days)
- Mold Fabrication: Single cavity 6-8 weeks, multi-cavity (with many slides) 10-12 weeks
- T0 → T1 → T2: Defect countermeasures → Machining jig adjustments → Finalize mass production conditions
- PPAP (Level 3): Submit drawings, material certificates, process capability (Cp/Cpk ≥ 1.33 target) → First article approval
- Pre-SOP Audit: Stocking of spare and consumable parts, setting up transportation buffers
Case Study ②: Learning from Competitors and Local Companies
HAL Vietnam operates 62 die-casting machines, mainly in the 350-800t range, and has an integrated system from casting to finishing, machining, and partial assembly, utilizing robots. They stabilize mass production based on IATF 16949 / ISO 14001 standards, with a focus on setup time reduction and automation.
Viet Thanh highlights its IATF 16949 / ISO 9001 / ISO 14001 certifications and leverages its strategic location (approx. 10 minutes from Noi Bai Airport / 90 minutes from Haiphong Port) to offer a system that includes surface treatment.
Konpira’s purchasing case study is a useful reference for its structure, which visualizes merits in the order of Effect → Rationale → Image.
A comparison of the three suggests that HAL is suitable for large lot × stable volume, Viet Thanh for high-mix production × simultaneous management of surface finishing, and Konpira’s visualization style for internal persuasive documents.
Success Story (Model Case)
We linked local procurement with in-process quality assurance and operated a 4-week cycle of audit → FMEA → PPAP (Level 3) → first article approval → mass production monitoring. By integrating casting condition sheets with the mold maintenance ledger and standardizing local materials and jigs, we halved the frequency of transportation. Within three months of launch, we achieved a 30% reduction in defect rate, a 20% shortening of shipping lead time, and a 15% reduction in sea freight costs. We also mitigated currency exchange impact by making 60% of the pricing formula VND-denominated.
Failure Case (Lessons Learned)
For a mass production project for the EU, a supplier switched the bolt material without notification. The BoM (Bill of Materials) was not updated, and an EVFTA claim was filed. This resulted in a failure to meet the origin requirements, leading to an additional tariff of 3-6%, rejection at customs, and a 5-day delivery delay.
As preventive measures, we standardized the following: 1) adding origin tags to supplier-specific BoMs, 2) establishing a gate to re-evaluate ROO (Rules of Origin) when design changes occur, and 3) implementing a pre-shipment checklist (confirming HS code / calculating RVC or CTH / checking REX or EUR.1 / conducting a pre-loading audit).
Conclusion
The key takeaway of this article is a design philosophy that simultaneously optimizes Cost × Quality × LT × FTA. By appropriately fixing the mold and conditions and linking local procurement with in-process quality assurance, you can reduce both PPM and lead times while mitigating currency and tariff risks.
As a next step, please utilize the diagnostic sheet, where you can input demand fluctuations, annual production volume, target PPM, desired lead time, transportation mode, and FTA applicability. By visualizing estimated QCDS (Quality, Cost, Delivery, Service) and key risks/countermeasures, and using it alongside an initial audit checklist and a BoM origin map template, you can quickly build internal consensus.