The manufacturing sector in Southeast Asia has attracted substantial international business due to competitive labor costs and a strategic location. However, finding reliable suppliers remains a challenge, especially for SMEs. While Artificial Intelligence (AI) offers exciting possibilities for streamlining sourcing, it’s crucial to recognize its current role as a powerful assistant that enhances, rather than replaces, human expertise and traditional methods.
The Rise of AI in Sourcing
AI technologies are emerging as valuable tools for enhancing traditional sourcing methods by processing large datasets to identify potential suppliers more efficiently. According to the “Growing Up: Navigating Gen AI’s Early Years” survey, in 2024, among 800 senior business leaders who were surveyed, 72% of them use AI weekly, a significant rise from 37% in 2023.
As businesses are becoming more and more accepting of using AI, so does the sourcing service. In recent years, AI is transforming sourcing by making it easier to find and evaluate suppliers. It can scan online directories, industry reports, and news sources to create a list of suppliers based on factors like product type, certifications, and production capacity. AI also helps assess risks by analyzing financial records, customer reviews, and news articles to check a supplier’s reliability and compliance with regulations. Additionally, AI-powered translation tools improve communication by breaking language barriers, making it easier for international buyers to work with Vietnamese suppliers.
In the video below, we look at how five AI tools, including ChatGPT, Gemini AI, Bing AI, Deep Seek, and Claude AI, perform when asked to generate a list of manufacturers in Vietnam.
The Power of a Hybrid Approach: Combining AI and Human Expertise
AI has transformed sourcing by automating research, identifying potential suppliers, and analyzing key data points such as certifications and production capacity. However, while AI offers efficiency, it cannot fully replace traditional sourcing methods. The most effective approach combines AI-driven insights with human expertise to ensure reliability and quality.
One major limitation of AI is the limited online presence of many SMEs. In Vietnam, many small and mid-sized factories do not have websites or digital profiles, meaning AI tools may overlook valuable suppliers simply because they are not easily found online. On-site verification and human evaluation remain essential, as AI cannot conduct factory audits, assess production conditions, or detect quality issues that might not be captured in digital records.
Trust and relationship-building also play a critical role in sourcing. Finding the right supplier is not just about price—it requires cultural understanding, negotiation skills, and long-term collaboration. Strong personal connections lead to better partnerships and more reliable supply chains, something AI alone cannot facilitate.
That said, AI still plays a valuable role in streamlining the initial research process. It can quickly filter suppliers based on key criteria like product category, certifications, and capacity, providing a strong starting point for deeper evaluation. However, manual verification remains crucial—through on-site visits, audits, and face-to-face meetings—to validate production capabilities, ethical practices, and overall supplier credibility.
By combining AI’s efficiency with human expertise, businesses can optimize their sourcing strategy—leveraging technology for speed and scale while ensuring quality and trust through hands-on assessment. This hybrid approach strikes the right balance between automation and the personal touch needed for long-term sourcing success.
The Future of AI in Sourcing: Augmenting Human Capability
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As AI technology advances, its role in sourcing will continue to grow. We can expect AI to become even more useful in several key areas.
One major development is predictive analytics, where AI can analyze historical data to forecast potential supply chain disruptions, quality issues, or cost fluctuations. This allows businesses to take proactive steps to minimize risks before problems arise.
Another area is real-time monitoring. AI-powered sensors and monitoring systems can track production processes, measure quality metrics, and ensure compliance with safety and environmental standards in real time. This enhances transparency and helps maintain consistent quality.
Additionally, AI can improve communication between buyers and suppliers. AI-powered chatbots and virtual assistants can provide instant support, answer supplier questions, and resolve issues more efficiently, reducing delays and misunderstandings.
However, while AI will continue to enhance sourcing, it will not replace human expertise. Human judgment, relationship-building skills, and industry knowledge will remain essential for successful sourcing in Vietnam. AI should be seen as a tool to support and improve decision-making, not as a substitute for human involvement.
Final thought
AI is undoubtedly transforming the sourcing landscape in Vietnam, offering new opportunities for efficiency, cost reduction, and risk management. However, businesses must adopt a balanced approach that integrates AI with human expertise to navigate Vietnam’s complex supplier ecosystem successfully.
The most effective sourcing strategies will leverage AI-driven insights for speed and scalability while maintaining a strong focus on personal relationships, quality assurance, and ethical sourcing practices. By combining technology with industry know-how, businesses can optimize their supply chains and build long-term, sustainable partnerships in Vietnam’s dynamic manufacturing market.
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Source: Vietnam Insider