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A leading electronics supplier faced significant supply chain challenges due to an overreliance on materials and manufacturing in Asia, exacerbated by the COVID-19 pandemic and geopolitical instability. These issues resulted in transportation delays, extended production lead times, and threats from country-specific tax and trade regulations, which jeopardized timely product deliveries to their customer base primarily located in the US. Recognizing the urgent need for supply chain resilience, the company sought to diversify its manufacturing locations to mitigate these risks. To address these challenges, the client engaged an integrated EY team specializing in supply chain modeling and optimization, tax, and trade. The EY team developed a comprehensive strategy to diversify manufacturing and alleviate long-term supply chain risks. They utilized a digital model to evaluate multiple operational sites, assessing millions of site variables to provide informed recommendations. This model integrated tax considerations, customs duties, and local regulations, while also factoring in geopolitical insights to optimize the supply chain network. The results of the EY intervention were significant. The electronics provider achieved a 50% reduction in the average length of haul from production to consumer, which streamlined logistics and improved delivery times. Additionally, the company reduced excess product inventory in the pipeline by 27% and projected a 15% decrease in future carbon emissions from transport. The new manufacturing strategy also opened up potential cost savings through business incentives associated with the near-shore location. Overall, the tailored supply chain optimization not only enhanced operational efficiency but also ensured that critical mobile devices remained accessible to consumers worldwide.
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