Viettel Post, Vietnam’s military-run postal service, is making significant strides in the logistics sector by embracing automation. This move aims to capitalize on the rapidly growing e-commerce market in Vietnam. By integrating advanced logistics technology and automated guided vehicles (AGVs), Viettel Post is streamlining its operations, reducing delivery times, and enhancing efficiency. This positions the company competitively in both domestic and international markets.
Implementation of Automation at Viettel Post
The Christmas Eve Operation
On Christmas Eve 2024, Viettel Post’s warehouse in Hanoi was a hive of automated activity. Approximately 200 beetle-shaped robots were deployed to manage the massive influx of packages from e-commerce platforms like Shopee and TikTok Shop. These AGVs, moving at a swift pace of two meters per second, transformed what used to be a labor-intensive process into a highly streamlined operation. The systems worked by scanning QR codes on the packages, which then directed the robots to specific delivery bags categorized by provincial destinations. This intricate sorting process exemplified the power of automation in handling large volumes efficiently.
The night underscored how the AGVs could autonomously adapt to the surge in packages typical of a holiday season. The robots meticulously identified, categorized, and efficiently placed the packages, highlighting Viettel Post’s newly acquired capability of handling logistical complexities. By replacing manual sorting processes, the AGVs helped seal gaps that often lead to delays and errors. This level of automation had a significant impact, reducing potential bottlenecks and ensuring timely parcel delivery even during peak periods.
Development and Inception of AGVs
Viettel Post’s leap into automation was marked by the formal introduction of robotic systems in January 2024. This represented a substantial technological milestone for the company. The AGVs were developed in-house by a team of 11 highly-skilled engineers, several of whom had gained recognition in prestigious robotics competitions. Tasked with a dual mission of eliminating human error and enhancing operational precision, this team crafted software specifically tailored for the AGVs. The result was a robust system capable of executing complex logistical tasks with remarkable accuracy.
The development phase also involved rigorous testing and iterative improvements to ensure the AGVs could function optimally in real-world settings. By looking into existing models from technological powerhouses like Alibaba’s Cainiao and Amazon, the engineers drew inspiration and adapted cutting-edge techniques to meet Viettel Post’s unique requirements. This internal development demonstrated Viettel Post’s commitment to self-reliance and innovation. By investing in their own R&D capabilities, the company not only significantly cut down on external dependencies but also tailored solutions that perfectly fit their operational needs.
Achievements in Operational Efficiency
Boosting Capacity and Reducing Delivery Times
The introduction of AGVs has brought transformative changes to Viettel Post’s operational metrics. These advancements include a marked reduction in delivery times by 8-10 hours and a threefold increase in output. The AGVs significantly boosted the company’s capacity to handle around 4 million parcels daily, representing roughly 50% of Vietnam’s entire e-commerce capacity. These improvements come at an opportune moment as Viettel Post seeks to expand its market reach beyond Vietnam to neighboring regions such as Cambodia and Myanmar, thereby consolidating its position as a regional logistics leader.
The enhanced capacity also underscores Viettel Post’s ability to cater to the growing demands of e-commerce, which shows no signs of slowing down. By addressing the logistical bottlenecks that traditionally plague the industry, the company can promise faster deliverables and increased reliability. This unprecedented efficiency is crucial for retaining customer satisfaction and increasing market share in an intensely competitive landscape. It further enables Viettel Post to offer more competitive pricing structures, a critical factor that can help capture a larger section of the market.
Addressing Market Trends and Challenges
Vietnam’s logistics sector has been growing rapidly, expanding between 14% and 16% annually to reach an approximate value of $40 billion. Despite this growth, the industry is noted for its inefficiencies, with Vietnam ranking 43rd in the World Bank’s logistics performance index. Fragmentation within the sector, characterized by an overabundance of small-scale sellers and disparate logistics infrastructures, compounds these challenges and creates a complex landscape for logistics providers.
Addressing these inefficiencies, Viettel Post’s automation initiatives aim to consolidate fragmented processes and introduce standardization across operations. This is particularly significant as it builds resilience against the overarching market inefficiencies that appear due to a fragmented logistics landscape. The investments in AGVs and other automated systems illustrate the company’s proactive approach to rising above these market constraints. By setting a new benchmark for operational efficiency, Viettel Post sets a precedent that could potentially catalyze a wider industry transformation in Vietnam’s logistics sector.
Competitive Landscape
Market Share and Competition
Viettel Post holds a market share of about 17% in Vietnam, according to a 2023 report by VietData. The company faces stiff competition from other state-owned entities such as Vietnam Post, and private and foreign players including J&T Express, Best Express, and Grab. This competitive pressure necessitates continuous innovation and enhancement of logistical processes to capture a larger market share and address inefficiencies.
To stay ahead of the competition, Viettel Post has emphasized not only technological advancements but also customer-centric services. The improved delivery times and increase in parcel-handling capacity have been tailored to satisfy the diverse needs of clients ranging from small businesses to large scale enterprises. By maintaining a strong focus on emerging technologies and customer satisfaction, Viettel Post is well-positioned to override potential disruptions from competitors and continue its upward trajectory in market share growth.
Strategic Vision and Political Alignment
For state-owned enterprises like Viettel Post, the initiative to modernize logistics infrastructure is not only a commercial endeavor but also a political one. The drive to integrate and elevate Vietnam’s logistics sector aligns with broader state ambitions to compete regionally, particularly against a more centralized and efficient logistics framework like that of China. The push towards logistics automation reflects Vietnam’s aspirations to transition from a low-cost manufacturing hub to a high-tech economy.
The alignment with state ambitions provides Viettel Post with substantial governmental support in terms of policy and infrastructure development. This collaboration ensures that the technological advancements in logistics are in sync with the national economic strategies, further strengthening the company’s market position. By aligning its goals with the country’s broader vision for technological and economic advancement, Viettel Post is ensuring that its automated logistics solutions contribute to national growth while securing its own competitive edge.
Technological Adaptation and Challenges
Overcoming Sector Fragmentation
Viettel Post’s ability to adopt and adapt advanced logistics technologies is exemplified by its development of AGVs and other automated systems. However, the journey has not been without its challenges. The fragmentation within the logistics sector and the preference for cash-on-delivery among Vietnamese consumers add complexity to operations. Nevertheless, Viettel Post’s extensive networks afford it an advantage in overcoming these hurdles and pushing towards greater automation.
The fragmentation of the logistics sector often means that standardized practices are difficult to implement uniformly. Viettel Post’s strategic approach has been to introduce scalable automated solutions that can be adapted across various operational scenarios. This way, even in a highly fragmented market, the company’s innovations can ensure consistent efficiency and reliability. By focusing on scalable and adaptable technological solutions, Viettel Post is gradually transforming sector-wide practices and setting a new standard of automated logistics in Vietnam.
Focus on Self-Reliance and R&D
In February last year, Viettel Post established dedicated teams to tackle various aspects of the logistics chain, including warehousing, transportation, and last-mile delivery. This holistic approach aims to optimize the movement of goods and solidify the company’s leadership in the logistics sector. One notable example is the engineering team tasked with developing AGVs, who initially looked to existing models in China, including those used by giants like Alibaba’s Cainiao and Amazon, for inspiration.
By fostering an environment of self-reliance and continuous research and development, Viettel Post aims to chart its path in the logistics sector. Highlighting local talent and drawing on global best practices, the company ensures its solutions are both cutting-edge and culturally tailored. This dual strategy of local innovation with global benchmarks positions Viettel Post not just as a logistics service provider, but as a pioneer in technological advancements within the sector. The emphasis on self-reliance aids the company in developing solutions that are uniquely suited to the local market, thereby maximizing their impact and efficiency.
Productivity Gains and Their Implications
Enhancing Operational Efficiency
The operational roll-out of AGVs resulted in substantial productivity gains, such as preventing packages from falling off conveyor belts and reducing labor costs for clients like Yody, a major Vietnamese fashion retailer. These productivity gains translate into significant cost savings and efficiency improvements for Viettel Post and its clients, reinforcing the value proposition of automation in logistics. However, these advancements also come with concerns about potential job losses, the need for new skill sets, and associated mental pressures on the workforce.
Addressing these concerns requires a balanced approach that includes re-skilling programs and mental health support initiatives for the workforce. Viettel Post recognizes that the transition to automated systems is not just a technological shift but also a cultural one. By implementing comprehensive workforce development programs, the company aims to mitigate adverse impacts and ensure that employees are equipped to thrive in an automated environment. This approach underscores Viettel Post’s commitment to sustainable growth that benefits both the company and its workforce.
Future-oriented Innovations
Looking towards the future, Viettel Post continues to pioneer new technologies, including drones for deliveries in disaster-stricken areas and robotic systems with flexible arms for warehouse tasks. Moreover, the deployment of 1,000 smart boxes in urban centers demonstrates the company’s commitment to enhancing delivery infrastructure. The January introduction of in-house manufactured robots in Ho Chi Minh City further signifies Viettel Post’s endeavor to push the envelope in logistics technology.
These innovations are not only aimed at improving efficacy and speed but also at ensuring resilience in challenging scenarios. For example, drone deliveries can play a critical role in disaster recovery, providing a lifeline in areas where traditional logistics networks may be disrupted. Similarly, smart boxes offer a secure and convenient delivery option that aligns with urban lifestyles. The continuous efforts towards futuristic technologies highlight Viettel Post’s dedication to not just keeping pace with current trends but setting new ones, thereby positioning themselves as leaders in innovative logistics solutions.
Conclusion
Viettel Post, Vietnam’s military-run postal service, is making remarkable advances in the logistics sector through the adoption of automation technology. This strategic move is designed to tap into the booming e-commerce market in Vietnam, which is experiencing rapid growth. By incorporating state-of-the-art logistics technology and automated guided vehicles (AGVs), Viettel Post is greatly enhancing its operational efficiency. The use of AGVs allows for the automation of material handling and transportation processes within their logistics operations, resulting in significantly reduced delivery times.
This technological integration not only improves service speed but also boosts overall efficiency. Consequently, Viettel Post is becoming more competitive, both within Vietnam and on an international scale. The company’s commitment to embracing automation reflects a proactive approach in adapting to market demands and technological advancements. As the e-commerce sector continues to expand, efficiency in logistics becomes increasingly crucial.
By leveraging these innovations, Viettel Post is well-positioned to meet the rising demands of e-commerce customers, ensuring fast and reliable delivery services. This focus on cutting-edge technology and improved efficiency is set to bolster Viettel Post’s standing in the highly competitive logistics market, making it a key player both domestically and globally.