Cost and Labor Pressures Drive Factory Operational Optimization

 

Located about 19 km from central Ho Chi Minh City, Long Hau Industrial Park benefits from proximity to a market of over 14 million people, supported by increasingly complete transport infrastructure. On the other hand, being close to a major city also means factories operate within a labor market where workers have many employment options.
 

At the "Hands-On Experience with Smart Automation and Traceability Solutions" program held on September 16, Mr. Bui Le Anh Hieu, Marketing and Business Director of Long Hau Corporation (HoSE: LHG), said manufacturing enterprises are facing simultaneous pressure from rising electricity prices, labor costs, and raw material costs, while still having to absorb price-reduction pressure from customers.
 

Many businesses have also reported difficulty recruiting skilled workers, making the model of increasing output by adding more workers increasingly ineffective.

Against this backdrop, the challenge for businesses is not just finding cheaper inputs, but figuring out how to produce more output per worker, per kWh of electricity, and per square meter of factory space.
 

From adding headcount to boosting productivity
At the first layer, automation directly impacts the number of workers needed on the production line.
 

According to Mr. Nguyen Sy Duong, Project Manager at Kyouwa Vietnam Co., Ltd., certain raw material pre-processing stages can be reduced from 6-8 workers to just 1-2 after automation. In the forming and processing stage, systems can reach speeds of 10,000-20,000 products per hour with only 2-4 supervisors, compared to 8-12 previously. High-speed automated packaging lines can also cut line-staff needs by 60-70%.
 

The value of automation therefore lies not only in reducing the number of machine operators. Amid difficulties in recruiting additional labor, businesses can maintain output with fewer staff or increase output without a corresponding increase in workforce size. That said, financial efficiency still depends on investment costs, equipment utilization rates, and payback period.

Another layer of cost lies in work that does not directly create the product.
 

Ms. Hoa Tran, Project Manager at SATO Solutions Vietnam Co., Ltd., introduced a system that connects machinery with barcode and QR code printing and scanning devices. Data on raw materials, production batch codes, product codes, and pallets are recorded in real time, enabling information retrieval within seconds.
 

This mechanism allows data to be generated directly during the production process, rather than requiring additional manual data entry, record-keeping, and inspection steps afterward.

The need for digitization becomes even clearer as legal requirements around traceability tighten. New regulations require businesses to be able to provide traceability data within 24 hours upon request.
 

As such, optimizing labor costs is not just about the number of workers directly on the production line, but also about the resources that must be dedicated to data management and compliance.
 

Beyond labor: operating costs
As production lines rely on increasingly more machinery, costs don't disappear—they gradually shift toward electricity, maintenance, and asset operations.
 

Mr. Felix Chan, Head of Digital Sustainability Technology at Arup, said businesses can combine Building Information Modeling (BIM), Digital Twin technology, and operational data to monitor assets, forecast maintenance needs, and optimize ventilation and cooling systems. The application of AI significantly speeds up model-building and computation compared to traditional methods, saving businesses valuable time.
 

One example Arup presented at the event was The Element project. The retrofit solution, combined with the Neuron platform, helped save approximately 10% in operational energy, with a payback period of around 2 years.

Arup representative Mr. Felix Chan presenting at the event.
 

Payback period allows the energy-saving equation to be viewed as an investment decision, rather than merely an environmental goal. For manufacturing businesses, even a partial reduction in electricity costs can become a source of improved operational efficiency, provided the initial investment is recovered within a reasonable timeframe.
 

The chain of solutions presented at the event thus illustrates three sequential layers of optimization. Automation reduces dependence on direct labor. Digitization reduces manual administrative and traceability tasks. Data is then further used to reduce operating costs for the machinery systems and factory facilities themselves.
 

This shift simultaneously creates new requirements for industrial parks themselves.
 

According to Long Hau, food processing and packaging factories using modern production lines require stable power supply, adequate wastewater treatment capacity, truck access corridors, and floor load capacity sufficient for automation systems. Older, retrofitted factory buildings do not always meet these specifications.
 

Mr. Bui Le Anh Hieu noted that investor demand is also shifting. Rather than focusing solely on rental rates or floor area, businesses are increasingly concerned with whether an industrial park's infrastructure can support automated production lines, digital data systems, and emissions-reduction standards.
 

This is notable given that FDI inflows into Vietnam remain heavily concentrated in manufacturing. In the first 8 months of 2026, the processing and manufacturing industry attracted USD 20.18 billion in newly registered and additional capital, accounting for 59.5% of total FDI across these two categories; realized FDI capital in the sector reached USD 14.24 billion, equivalent to 82.6% of total realized capital.
 

Long Hau is also an industrial park with a significant proportion of foreign enterprises. According to enterprise data published in 2025, approximately half of the 215 businesses operating in the industrial park at that time were FDI companies.
 

This data alone is not sufficient to conclude that green or smart infrastructure will directly boost Long Hau's occupancy rate. The ability to attract FDI still depends simultaneously on land availability, rental prices, transport connectivity, human resources, and many other factors.
 

However, as new factories use less manual labor but more machinery, data, and electricity, the ability to provide infrastructure compatible with this production model may become part of the competitive capacity of industrial parks.

Source: nhadautu.vn
17/09/2026