Vietnam’s Manufacturing DX Revolution: Who’s Leading, Who’s Lagging, and What’s Next?

In today’s fast-changing manufacturing landscape, Vietnam is emerging as a vibrant hub for digital transformation and growth. As a vital part of Southeast Asia’s supply chain, the country’s manufacturing sector, including both small and large enterprises, is adopting Industry 4.0 to improve efficiency, competitiveness, and sustainability. This rapid shift creates strong demand for strategic guidance and practical solutions. At NTQ, we meet this need by providing tailored DX strategies that combine advanced technologies with strong partnerships, helping businesses thrive in the era of smart manufacturing.

Where Vietnam’s Manufacturers Stand on Digital Transformation

To assess digital transformation progress, the Industry 4.0 (IR 4.0) Readiness Index, developed by MOIT, VASS, UNDP, and VDMA, is a key framework. Based on a 2019 survey of 2,659 enterprises, this index scores readiness on a 0-5 scale, categorized into five maturity levels. While the data is from 2019, it provides a baseline that highlights persistent challenges and opportunities, particularly for SMEs, which dominate the sector.

The lowest maturity level, “Outsider,” applies to approximately 85% of enterprises, scoring between 0 and less than 0.5. These businesses rely on manual processes, such as paper-based records and Excel spreadsheets, with minimal automation or digital integration. A notable example is Hung Yen Garment Corporation (Hugaco), a mid-sized apparel firm that is only beginning to plan investments in automation, lacking systems like Manufacturing Execution Systems (MES) or Supervisory Control and Data Acquisition (SCADA).

The “Beginner” level includes 13% of businesses with scores ranging from 0.5 to less than 1. This level shows some digitization in certain areas but has scattered data silos. Particularly, Garment 10 JSC has digitized parts of its production line and is getting ready for “lean factory” practices. Its Enterprise Resource Planning (ERP) and accounting systems are linked to inventory, but the workshop data is still not connected.

At the “Intermediate” level, representing 2% of businesses with scores from 1 to less than 2, there is adoption of automation and basic IoT for real-time monitoring in isolated processes. A prime example is Vinamilk’s Mega Dairy plant in Bình Dương, which features automated Ultra-High Temperature (UHT) lines, Wi-Fi-enabled Automated Guided Vehicles (AGVs), and full traceability for milk batches via IoT-integrated MES, including dashboards for Overall Equipment Effectiveness (OEE).

The “Experienced/Expert” category makes up about 0.3% of businesses, with scores ranging from 2 to less than 4. This category involves thorough data integration across the value chain, supported by improved analytics. Examples include Samsung Electronics Vietnam, which has invested over $2 billion in smart-factory updates and trained 100 experts in partnership with MOIT. Another example is VinFast’s Haiphong facility, which uses over 1,200 ABB robots, Siemens SIMATIC systems, and digital twins for real-time data, AI-driven quality control, and predictive maintenance.

Finally, the “Top Performer” level, with scores of 4 or higher, signifies full-scale intelligent manufacturing with AI at the core. However, there weren’t any notable Vietnamese examples at this level, which shows there is considerable room for growth. 

The data clearly highlight that most Vietnamese manufacturers, particularly SMEs, are still in their early stages. Although SMEs make up nearly 98% of all enterprises in Vietnam, they contribute less than 30% of total business capital and only about 21% participate in global value chains, well below Thailand (30%) and Malaysia (46%). This means that despite their overwhelming presence, Vietnamese SMEs remain small in scale, undercapitalized, and weakly integrated into international markets—clear signs of immature development. The international comparison further reinforces that Vietnam’s SMEs are less advanced in global integration and competitiveness than their regional peers. 

Beyond these structural limitations, productivity also lags behind, with Vietnam’s labor productivity reaching only 19% of Malaysia’s and 7% of Singapore’s (General Statistics Office, 2023). At the operational level, SMEs continue to struggle with limited access to finance, outdated systems, and a heavy reliance on manual processes, all of which hinder efficiency, scalability, and innovation. For instance, many SMEs still depend on paper-based workflows or legacy software for inventory and production management, leading to errors and delays.In contrast, large companies like Samsung and VinFast are setting the standard by leveraging global expertise to achieve a high level of maturity.

How Vietnam’s Digital Transformation Is Accelerating While Facing Hurdles

Fast-forward to 2024 and 2025, and the landscape shows encouraging momentum. According to CPA Australia’s Business Technology Report 2024, which surveyed accounting and finance professionals across the Indo-Pacific, 74% of Vietnamese businesses have established a digital strategy as part of their organizational plans, which is higher than the regional averages. Furthermore, 78% are experimenting with AI, placing Vietnam as a leader in technology adoption among the surveyed markets. 

Cisco and IDC’s insights on SMB digital maturity show a change. Many Vietnamese SMBs have moved from Stage 1 (Outsider) to Stage 2 (Beginner). However, fewer than 15% have made it to Stages 3-4 (Expert – Top Performer). This suggests a need for increased investment. Recent developments in 2025 support this trend. 

Vietnam’s Index of Industrial Production (IIP) grew by 8.6% in the first seven months of the year, driven by digital transformation initiatives. The National Digital Transformation Program aims for the digital economy to make up 20% of GDP by 2025 and 30% by 2030. This program has led to policies that support innovation and sustainability. The ERP market is expected to reach US$414.50 million by the end of 2025, showing wide adoption.

For large enterprises, collaborations like Cisco’s 2024 Country Digital Transformation Program are boosting infrastructure and ecosystem development. However, challenges remain. Small and medium-sized enterprises face hurdles in funding and skills, while all companies deal with cybersecurity and integration issues. Vietnam’s digital economy is set to reach $45 billion by 2025 and could double by 2030, but achieving this goal requires closing the maturity gap.

Unlocking Digital Potential for SMEs and Industry Leaders

During the recent workshop co-hosted by NTQ and TIA Solution, a comprehensive automation model was introduced to illustrate how factories can transition step by step toward becoming smart factories. 

For Vietnamese SMEs, which make up over 90% of businesses,  many are still at the lowest maturity stage (the Outsider or level 1 in the model), relying on manual processes, paper-based records, and Excel spreadsheets. In these factories, production data is typically recorded on paper slips or whiteboards during shifts, and only updated into Excel at the end of the shift or the day. This manual approach creates major bottlenecks: data is updated slowly, prone to errors, and requires significant effort to consolidate. 

As a result, managers cannot detect issues like line balancing in real time, and critical metrics such as defect rates or rework are not captured systematically. These limitations make the adoption of a Manufacturing Execution System (MES) the essential first step for SMEs to achieve automated, accurate, and real-time data flows, which make SMEs move from manual to higher level of maturity stage. 

According to the NTQ – TIA model, once SMEs move from manual to semi-auto (The beginner level) operations, the next step toward full auto (Intermediate level) and digitalization (Expert level), which is adopting Industrial IoT (IIoT) for real-time monitoring and automation. Beyond that, businesses can advance into ultimately intelligence (Top Performer level), where AI enables predictive maintenance, smart planning, and data-driven optimization.

This roadmap shows that for SMEs, MES adoption is the foundation, IIoT is the accelerator toward automation, and AI represents the ultimate enabler of intelligent manufacturing.

For enterprises that have already reached the Semi-auto stage and aim to move toward Full-auto, the transition requires not only upgrading machinery but also adopting an integrated approach to connectivity, supervision, and optimization. This is where NTQxTIA’s IoT devices and supervisory software solutions come in. 

Based on the NTQxTIA model, it is evident that many factories are currently at the semi-automated level and have a need to upgrade to full automation. At this stage, NTQxTIA provides IoT solutions such as smart sensors, PLC controllers, and data connection devices to eliminate manual operations, enabling continuous and synchronized production line operations. Concurrently, basic production management software is implemented to monitor machine performance, reduce operational errors, and enhance system stability. This marks the transition from a semi-automated factory to a fully automated one, where data is collected and monitored in real time.

Once the full-auto level is achieved, the next step is to progress toward Digitalization and, further, an Intelligent Factory. At the digitalization stage, NTQxTIA offers advanced software solutions like MES, SCADA, and big data analytics platforms to not only monitor but also optimize the entire production process. Subsequently, when moving toward an intelligent factory, businesses can leverage AI, predictive analytics, and “digital twin” models to automate decision-making, predict issues before they occur, and optimize operational costs. Thus, NTQxTIA’s IoT and software ecosystem is not just a support tool but also a foundation that enables businesses to steadily advance from automation to intelligence.

Moreover, Vietnam’s government is fostering innovation with an ambitious goal of ranking among the top 30 globally in digital transformation by 2045, creating opportunities for strategic partnerships. Emerging trends, such as AI adoption and ERP system growth, signal a transformative shift, but success depends on effective and strategic implementation.

Driving Success Through Digital Excellence

In today’s fast-evolving digital landscape, embracing digital transformation (DX) is not just an option, it’s the key to unlocking sustainable growth and staying ahead of the competition. At NTQ, we empower manufacturers of all sizes to navigate their DX journey with confidence, offering end-to-end solutions tailored to your unique needs. From SMEs transitioning from manual processes like Excel to cloud-based MES, to large enterprises scaling up with AI-driven operations, our expertise in Industrial IoT (IIoT), AI, and custom software ensures a seamless and impactful transformation.

Our approach begins with understanding your business’s digital maturity, followed by crafting bespoke strategies that integrate cutting-edge technologies like AI, digital twins, and IIoT. This enables cost efficiencies, operational agility, and predictive capabilities, as demonstrated by industry leaders. With Vietnam’s ambitious goal to rank among the top 30 globally in digital transformation by 2045, NTQ is your trusted partner to harness this momentum and achieve Industry 4.0 excellence.

Choosing NTQ means more than adopting technology, it’s about partnering with a team committed to your success. Our proven track record with global clients and holistic solutions ensures your business thrives in the digital era. Contact us today to discover how NTQ can accelerate your path to a smarter, more resilient future. Stay tuned for more insights from NTQ as we drive Vietnam’s manufacturing DX revolution forward.