This tool is designed to help enterprises systematically evaluate their factory site selection decisions in Vietnam. By thoroughly considering key factors, you can objectively compare different site options, assess the feasibility of the current site, and make more informed decisions.

Decision Factors and Scoring Criteria

Please score each factor (1-5 points, with 1 being the worst and 5 being the best) and assign weights (totaling 100%).

1. Geographic Location and Transportation (Suggested Weight: 15-20%)

• Proximity to Ports: 5 points = Distance <50km; 1 point = Distance >200km
• Road Network: 5 points = Direct access to highways; 1 point = Only rural roads available
• Proximity to Airports: 5 points = Distance <30km; 1 point = Distance >100km
• Proximity to Suppliers: 5 points = Major suppliers <100km; 1 point = Major suppliers >500km
• Proximity to Target Markets: 5 points = Major markets <200km; 1 point = Major markets >1000km

2. Labor Resources (Suggested Weight: 15-20%)

• Labor Supply: 5 points = Sufficient and stable; 1 point = Severely lacking
• Skill Level: 5 points = Highly matches enterprise needs; 1 point = Completely mismatches
• Labor Costs: 5 points = Significantly below industry average; 1 point = Significantly above industry average
• Availability of Training Institutions: 5 points = Multiple relevant institutions; 1 point = No relevant institutions
• Flexibility of Labor Regulations: 5 points = Very flexible; 1 point = Very strict

3.Infrastructure (Suggested Weight: 10-15%)

• Power Supply: 5 points = Stable and reliable with sufficient capacity; 1 point = Frequent outages with insufficient capacity
• Water Supply: 5 points = Abundant with good quality; 1 point = Severely lacking or poor quality
• Wastewater Treatment Facilities: 5 points = Modern with sufficient capacity; 1 point = Nonexistent or severely lacking
• Communication Infrastructure: 5 points = High-speed and stable; 1 point = Frequent disruptions or slow speed
• Suitable Industrial Land/Factory: 5 points = Ready and meets needs; 1 point = No suitable options

4.Policy Environment (Suggested Weight: 15-20%)

• Tax Incentives: 5 points = Significant incentives; 1 point = No incentives
• Foreign Investment Policies: 5 points = Highly encouraged; 1 point = Strictly limited
• Environmental Regulations: 5 points = Reasonable and stable; 1 point = Overly strict or frequently changing
• Government Administrative Efficiency: 5 points = Highly efficient and transparent; 1 point = Inefficient and opaque
• Political Stability: 5 points = Highly stable; 1 point = Unstable

5.Business Ecosystem (Suggested Weight: 10-15%)

• Industry Clusters: 5 points = Well-developed related industry clusters; 1 point = No related industries
• Local Suppliers: 5 points = Diverse and high-quality; 1 point = Almost nonexistent
• Warehousing and Logistics Services: 5 points = Well-developed and efficient; 1 point = Backward or lacking
• Availability of Business Services: 5 points = Comprehensive and professional; 1 point = Severely lacking
• R&D Institutions/Universities: 5 points = Multiple relevant institutions; 1 point = No relevant institutions

6.Quality of Life (Suggested Weight: 5-10%)

• Cost of Living: 5 points = Significantly below expectations; 1 point = Significantly above expectations
• Healthcare Facilities: 5 points = International standards; 1 point = Severely lacking
• International Schools: 5 points = Multiple quality options; 1 point = No international schools
• Environmental Quality: 5 points = Excellent; 1 point = Severely polluted
• Cultural and Recreational Facilities: 5 points = Rich and diverse; 1 point = Almost nonexistent

7.Cost Factors (Suggested Weight: 15-20%)

• Land/Factory Costs: 5 points = Significantly below budget; 1 point = Significantly over budget
• Construction Costs: 5 points = Below expectations; 1 point = Significantly over expectations
• Raw Materials and Energy Costs: 5 points = Significant advantage; 1 point = Significant disadvantage
• Logistics Costs: 5 points = Below industry average; 1 point = Above industry average
• Overall Operating Costs: 5 points = Significantly lower than other options; 1 point = Significantly higher than other options

Scoring and Interpretation

1. Score each factor (1-5 points)
2. Multiply each factor’s score by its weight
3. Sum all weighted scores to get the total score

Total Score Interpretation:

• 4.5-5.0: Excellent location, highly recommended
• 3.5-4.4: Good location, worth considering
• 2.5-3.4: Average location, needs weighing pros and cons
• 1.5-2.4: Poor location, reconsider recommended
• <1.5: Not recommended, should seek other options

Frequently Asked Questions

Q: How to determine the weight of each factor?

A: The weight should reflect your company’s specific needs and strategic priorities. For instance, if cost control is a top priority, a higher weight can be assigned to “Cost Factors.” Discuss with the management team to set weights based on company strategy.

Q: What information should be referenced for scoring?

A: Scoring should be based on objective data and thorough research. Reference government statistics, industry reports, field study results, and discussions with local businesses and experts.

Q: How to score if information on a certain factor is incomplete?

A: If there is insufficient information, refrain from scoring or assign a conservative middle score (e.g., 3 points). Note this information gap for further research.

Q: What if the total score is high, but a key factor has a very low score?

A: In such cases, assess the importance of that factor to your business. If it is a critical non-negotiable factor (e.g., political stability), you should reconsider the site even if the total score is high. Consider exploring other options.

Q: How to further distinguish when scores are close?

A: Consider the following methods:

• Reevaluate the weight settings to see if adjustments are needed
• Perform sensitivity analysis by slightly adjusting the scores to observe changes in results
• Introduce more refined scoring standards
• Conduct field studies to gather more firsthand information

Q: Can this tool completely replace field studies?

A: No, this tool is an aid to decision-making and cannot fully replace field studies. Field studies provide a more intuitive understanding and uncover details that data cannot reflect. It is recommended to conduct field studies on top-ranked sites after preliminary screening.

Q: How to reduce subjectivity in the scoring process?

A: To reduce subjectivity:

• Assemble a cross-departmental assessment team to gather different perspectives
• Use specific, quantifiable indicators
• Collect sufficient objective data to support scoring
• Conduct peer reviews and discuss significant scoring discrepancies

Q: What if the scoring result contradicts intuition?

A: In such cases:

• Recheck the data and scoring process to ensure no errors
• Analyze the basis of intuitive judgments to see if any important factors were overlooked
• Consider adjusting weights or adding new assessment factors
• Discuss with the team to understand different viewpoints

Q: How often should the evaluation be updated?

A: It is recommended to update the evaluation at least annually or promptly in the following situations:

• Significant changes in company strategy
• Significant changes in policy or economic environment in the target region
• Acquisition of new important information

Q: How to use this tool to improve an existing site?

A: For existing sites:

• Regularly evaluate using this tool to identify areas for improvement
• Develop specific improvement plans based on low-scoring factors
• Communicate with local government and partners for support and solutions
• Use the evaluation results for long-term strategic planning, considering whether adjustments or relocations are necessary

This tool provides a systematic framework for evaluating factory site selection decisions in Vietnam. By considering various factors comprehensively, you can more objectively assess the feasibility of your current site and make more informed decisions. Remember, this tool is an aid to decision-making and should be used in conjunction with other analysis methods, field studies, and expert opinions. When making the final decision, you should also consider the company’s long-term strategic goals and specific business needs.