Aluminum casting & mold design services

Key Data on Vietnam’s Manufacturing Industry and Economy

Source: Foreland, Ajia Business, JETRO, Kizuna

QCD Evaluation: The Reality of Vietnamese Procurement in Quality, Cost, and Delivery

Quality

Quality is one of the most critical factors in aluminum die-casting procurement in Vietnam. Many Vietnamese companies are focusing on establishing quality control systems, and the number of suppliers obtaining international certifications such as ISO 9001 is increasing. However, further efforts are needed to meet the high-quality standards required by Japanese companies.

• Quality Control System: While many companies have implemented quality management systems, the level of thoroughness in practice varies. Continuous improvement needs to be promoted through regular audits and training.
• Engineer Training: Securing and training skilled engineers is essential for aluminum die-casting manufacturing, which requires advanced technology. In Vietnam, skill development is pursued through On-the-Job Training, OJT, and external training, but there is currently a gap in experience compared to Japanese manufacturers.
• Meeting Japanese Quality Standards: Japanese companies set very strict standards for dimensional accuracy, surface finish, and mechanical properties. To meet these, close communication with suppliers and the deployment of local staff who understand Japanese quality standards are crucial. At Daiwa Aluminum Vietnam, we have established a quality control system led by Japanese personnel, ensuring that the quality levels demanded by our customers are consistently met.

Cost

One of the biggest attractions of Vietnamese procurement is its cost competitiveness. Low labor costs are a significant advantage, but it is important to consider the Total Cost of Ownership, TCO,.

• Labor Cost Trends: In Q1 2026, the average monthly wage for Vietnamese workers was approximately 9.01 million VND, approximately 42,000-45,000 JPY, which is significantly lower than the average monthly wage in Japanese manufacturing, approximately 345,695 JPY as of February 2026,. The minimum wage in Vietnam, Region 1, monthly, is approximately 5.31 million VND, around 30,000 JPY, but recruitment wages for factory workers in Region 1 can range from a minimum of approximately 8 million VND, around 50,000 JPY, to 12 million VND, around 75,000 JPY, sometimes reaching approximately 14 million VND, around 85,000 JPY, including overtime. Source: MAI International Labor costs are on an upward trend, with wage increases in Vietnamese manufacturing projected at 5.5% for 2024 and 5.2% for 2025.
• Material Costs: Aluminum ingot prices are linked to international markets, but overall material costs can be reduced through local procurement networks and efficient processing costs.
• Government Incentives: The Vietnamese government offers various investment incentives to attract FDI, such as corporate tax reductions and preferential land use fees. This can reduce initial investment and running costs, with some cases achieving a 30% cost reduction compared to domestic production. Source: Daiwa Light Alloy Industry Vietnam Co.,Ltd

Delivery

Delivery management directly impacts the efficiency of the entire supply chain. In Vietnamese procurement, the development of logistics infrastructure, production capacity, and supplier management capabilities are crucial factors.

• Supply Chain Challenges: While Vietnam has made progress in developing major ports and main roads, some inland and rural areas still lack developed infrastructure. It is also necessary to consider the complexity of customs procedures and the potential for unpredictable delays.
• Logistics Infrastructure: Industrial parks are concentrated around major cities, and logistics networks are relatively well-developed. However, lead times can be longer depending on the supplier’s location and product transportation routes.
• Production Capacity: It is important to confirm the supplier’s production capacity, equipment utilization, and ability to handle high-mix, low-volume production in advance. Flexibility to respond to sudden increases in production requests is also a key evaluation point.
• Lead Time Prediction: It is essential to predict realistic lead times, considering all processes from material procurement to production, shipment, and transportation. It is also important to include buffer periods to prepare for unexpected problems.

At Daiwa Aluminum Vietnam, we have established an integrated production system from mold design to casting, machining, surface treatment, and inspection. With state-of-the-art equipment, strict quality control by Japanese personnel, and the diligence of Vietnamese staff, we achieve the QCD demanded by our customers at a high level. This allows us to stably supply high-quality products while achieving a 30% cost reduction compared to domestic production. Source: Daiwa Light Alloy Industry Vietnam Co.,Ltd

Supplier Choice Points and Risk Management

To succeed in aluminum die-casting procurement in Vietnam, it is essential to choose appropriate suppliers and manage potential risks effectively.

Supplier Choice Criteria

• Technical Capability: Verify if the supplier has the technical capability to meet the required product specifications and precision. Evaluate mold design capability, casting technology, high-pressure die casting, low-pressure die casting, etc., machining technology, CNC machining, etc., and surface treatment technology comprehensively.
• Equipment Investment: Check if state-of-the-art equipment is installed and if regular maintenance is performed. Equipment obsolescence directly impacts quality and production efficiency.
• Quality Control System: Beyond ISO certification, thoroughly review the actual quality control processes, inspection system, and response to defects. The ability to understand Japanese quality standards and implement them on-site is crucial.
• Communication Skills: Confirm if smooth communication in Japanese or English is possible. Technical discussions and prompt information sharing during problems are critical to project success.
• Track Record: Emphasize experience in manufacturing similar products and a track record of transactions with Japanese companies. Suppliers with a proven track record are likely to be reliable and understand Japanese business practices.

Risk Management

While Vietnamese procurement offers many advantages, several risks also exist. It is important to identify these in advance and implement countermeasures.

• Geopolitical Risks: Changes in international affairs or regional conflicts can affect the supply chain. Measures such as securing multiple suppliers or considering alternative procurement sources are necessary.
• Supply Chain Disruptions: Natural disasters, pandemics, or disruptions in international logistics can impede material procurement and product transportation. It is important to check the supplier’s Business Continuity Plan, BCP, and diversify risks.
• Power Shortages: Vietnam’s power generation capacity is lower compared to neighboring countries, and there is a risk of planned power outages in some areas, especially during periods of high electricity demand in summer. It is necessary to confirm the presence of private power generation facilities and the stability of power supply.
• Labor Shortages and Turnover Rates: Vietnam’s population exceeds 100 million, with approximately 60% of the total population under 35, indicating a “demographic dividend“ period. However, this demographic dividend is projected to end by 2040. The number of workers in manufacturing and construction is approximately 17.4 million, but securing skilled labor is becoming difficult due to rapid economic growth. Employee turnover rates in Vietnamese manufacturing can often reach 20-30% annually, with talent shortages particularly severe for managers, 67.1%, and specialists, 61.7%,. Source: Kizuna, MAI International 39.8% of Japanese companies also face talent shortages. To maintain a stable production system, it is necessary to evaluate the supplier’s efforts in human resource development and retention.

Collaboration and information sharing with local partners are key to mitigating these risks and achieving smooth procurement. Daiwa Aluminum Vietnam specializes in integrated production from mold design to casting, machining, and surface treatment. With years of experience and Japanese management, we provide high-value-added solutions tailored to customer needs and strongly support aluminum die-casting procurement in Vietnam. Source: Daiwa Light Alloy Industry Vietnam Co.,Ltd

Conclusion

Vietnam has established itself as an attractive destination for aluminum die-casting procurement for Japanese manufacturers, thanks to its robust economic growth, abundant labor force, and proactive FDI attraction policies. While significant cost reductions can be expected compared to domestic production, challenges such as quality control, delivery management, and talent acquisition also exist. Accurately understanding these advantages and challenges, and implementing appropriate supplier choice and risk management, are key to successful procurement in Vietnam.

To optimize the QCD balance, it is essential to comprehensively evaluate not only price but also the supplier’s technical capabilities, quality control system, communication skills, and stable supply capacity. Furthermore, for potential risks such as geopolitical risks, supply chain disruptions, and labor shortages, proactive measures and close collaboration with local partners are required.

Daiwa Aluminum Vietnam provides high-quality aluminum die-cast products that meet diverse customer needs by handling everything from mold design to casting, machining, and surface treatment. With strict quality control by Japanese personnel and technical expertise cultivated over many years, we strongly support our customers in optimizing QCD for their Vietnamese procurement. When considering aluminum die-casting procurement in Vietnam, please do not hesitate to consult Daiwa Aluminum Vietnam. We promise to contribute to strengthening your company’s global supply chain.