Instructor Introduction

Lin Chien-Yi, the Southeast Asia Large-Scale Project Manager at Dingxin Digital Intelligence, has long focused on the implementation of localized management systems and the planning of large-scale projects in ASEAN markets such as Vietnam. He possesses extensive practical experience in manufacturing consulting. Since the establishment of Dingxin's Southeast Asia branch, he has participated in the process of "overseas factory construction → production expansion → group management" for many Taiwanese companies. He is familiar with issues such as cost control in the early stages of factory construction, cost center design, transfer pricing, and consistency of the three accounts. He excels at helping companies establish a verifiable and traceable management foundation overseas by using a general ledger-first, data-driven planning approach.

Building a factory to the south is not just about adding another factory, but about adding another management system.

In recent years, many Taiwanese businesses have regarded Vietnam as a key base for their global production capacity layout. Land acquisition, construction progress, and the introduction of machinery and equipment are often arranged in a clear timetable; but when it comes to "when will the system be introduced?", the answer is often - wait until the factory is stable.

Lin Jianyi pointed out a key blind spot:

Building a factory is a large-scale project. Without a management system involved from the beginning, all the subsequent costs, production line configurations and processes can easily become "visible but unclear".

Southeast Asian customs and regulations are still changing rapidly, and many unseen and unspoken costs are actually reflected in project budgets and return on investment. Without a method to quantify these changes, companies can only rely on intuition when making decisions.

Three reasons to implement the system at the beginning of factory construction

1. Use general ledger first, and manage factory construction as a special project.

In the briefing, Lin Jianyi proposed the concept of "general ledger first": using three modules, budget management, project management, and invoice management, to first treat the construction of the factory as a complete project for control.

The approach involves dividing the factory construction into different stages of a WBS (Work Breakdown Structure), such as land acquisition, factory construction, equipment purchase, utilities, and information systems. A budget is set for each stage, and the differences between the budget and the actual situation are continuously compared through the classification of actual vouchers and invoices, and the percentage of completion is calculated.

In this way, the cost of building a factory is no longer just a cumulative amount of money spent, but can be clearly answered with: "Which part exceeded the budget? Why did the budget exceed the budget? Is it related to engineering changes or environmental factors?"

2. Production line layout and warehouse design should be considered in conjunction with future accounting considerations.

In Taiwan, space is limited, and many management methods are compromises due to space constraints. When expanding the new factory in Vietnam, the factory space actually became an advantage—the circulation could be redesigned, allowing "tents" and "materials" to be planned together.

Lin Chien-yi pointed out that factors such as the distance between the warehouse and the production line, the material requisition or issuance mode, whether to set up a line-side warehouse, and the actual route during inventory counts are all closely related to the system process. If the layout design and system logic are not aligned, the end result will either be employees complaining that "the system is difficult to use," or inventory counts will always be inconsistent with the physical inventory.

3. Implement coding principles in advance to avoid being bound by historical transactions later.

Part number, order number, department, accounting subject, customer supplier, fixed assets... these seemingly "basic data" are actually the foundation for future analysis.

The initial stage of factory construction, with low transaction volume, is the most suitable time to discuss the "eight coding principles," cluster codes, cost centers, product number feature codes, and accounting subject structure. If adjustments are only made after mass production begins, the sheer volume of historical data often hinders progress, leaving only a less-than-ideal framework to be used.

Why does "find a translator, copy and paste" often fail? The real key is a localization team.

Many companies have had their ERP systems running for years, and when it comes to implementing them in a new factory in Vietnam, their instinctive reaction is: "Just bring the Taiwanese processes over, find a translator to teach the employees how to operate them." Lin Jianyi has compiled several common misconceptions among companies:

The headquarters does it this way, Vietnam does it this way; basic data can be directly imported; the SOP should be the same for producing the same products; what is most needed is Vietnamese translation... It seems reasonable at first glance, but once you get to the site, you find that things are not so simple at all.

Several phenomena will be encountered in actual implementation:

Therefore, he argued:

What's really needed isn't "translation," but a "local advisory team."

Dingxin trains Vietnamese consultants in Vietnam, providing professional guidance and on-site assistance to key users in understanding how the system integrates with practical processes. They can also make adjustments locally to address environmental changes such as personnel changes, new tax requirements, and supplier changes.

Cost center architecture: making cost accounts "calculated and explained"

Many companies still encounter an awkward situation after implementing ERP: the system is used every day and there are documents, but the cost accounts just can't produce reasonable figures, and the financial accounts and profit and loss analysis often don't match.

Lin Chien-yi believes the key issue lies in the fact that the "cost center" architecture was not designed comprehensively from the outset. He suggests that companies, in the early stages of factory construction, should first discuss and identify cost centers that suit their own characteristics based on product lines, processes, production line types, and expense nature, and design multiple cost pools for each cost center to collect labor and manufacturing expenses of different attributes.

For example, if the quality control department serves three production lines simultaneously, and the time spent and inspection items are different, then when these costs are allocated to each product, different allocation weights must be set, rather than simply averaging them.

Once a clear correspondence is established between the front-end production cost classification and the back-end general ledger, the following can be achieved:

Enterprises can then achieve "consistency between past and future records and accounting records", making cost analysis truly meaningful.

Group transaction and transfer pricing: A "new challenge" to be faced after going global.

When a company expands its factory in Vietnam, transactions with its Taiwan headquarters, other subsidiaries, and OBU become more complex, for example:

These all fall under the category of "group transaction scenarios".

The second layer is the "pricing rule".

The Vietnamese National Assembly has passed a resolution to implement the world's lowest tax burden system starting in 2024, which will prevent companies from adjusting their profits through tax havens as they have done in the past, and transfer pricing must be more transparent and based on evidence.

The system must support:

The third layer is the "shipping conditions".

If everything goes smoothly, it can be designed as a "one-stop shipping" system, where key documents trigger the system to automatically generate corresponding orders, shipments, receipts, and accounts receivable and payable. However, if the customer requests a delay in recognizing ownership of the goods or requires inspection to pass before payment can be made, "interruption points" need to be designed so that the system can continue the subsequent processes only when the conditions are met.

If these scenarios can be modeled and the rules set in advance, the group's transactions can operate stably on the day they go live, instead of having to chase internal reconciliations at the end of each month.

How to align the three accounts: customs account, inventory account, and accounting account?

In Vietnam, many businesses also encounter another common problem: for the same batch of goods, there is one figure in the customs account, another in the inventory account, and yet another in the accounting account.

The reasons are nothing more than:

Lin Jianyi's suggestion is to return to a principle: use the ERP's "shipping order" as the benchmark for consistency among the three accounts.

Practical approaches include:

This is not just a system operation issue, but also an adjustment of internal processes and mindsets, requiring coordination among customs, production management, warehousing, and finance departments. Once the three accounts can be reconciled on the same platform, companies can ensure that overseas transactions have consistent and traceable evidence during audits.

Treat system data as a common language for overseas factories

Expanding the factory in Vietnam is not just about adding a building or a few production lines; it's about adding a new "node" that requires long-term operation, tax compliance, and integration with the group.

Lin Jianyi summarized: "By incorporating the system into the planning from the early stages of factory construction, using general ledger first, managing the front and back offices with a cost center structure, and employing clear transfer pricing and shipping rules, along with a local consulting team, the company can operate more steadily in Southeast Asia." When companies are willing to invest in systems and mechanisms from the outset, rather than trying to improve them afterward, the Vietnam factory will not only be a production base, but will become a key strategic foothold for the group's global operations.

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