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A leading electronics supplier, heavily reliant on Asian manufacturing for mobile devices, faced significant supply chain challenges exacerbated by the COVID-19 pandemic and geopolitical instability. These issues resulted in transportation delays, increased production lead times, and complications from country-specific tax and trade regulations, threatening timely product delivery to their primarily US-based customer base. Recognizing the urgent need for supply chain resilience, the company sought to diversify its manufacturing locations to mitigate risks associated with overreliance on a single region. 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 sophisticated digital model to evaluate multiple operational sites, assessing millions of variables to inform decision-making. This model provided insights into tax implications, customs duties, and local regulations, enabling the client to maintain quality standards while expanding their manufacturing footprint. 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 strategic shift also allowed the client to benefit from lower duty costs on products imported from the newly established near-shore location, alongside potential cost savings from business incentives associated with this site. As the company ramps up operations at its new manufacturing location in North America, EY continues to support them with ongoing geopolitical and tax analysis, ensuring a robust and resilient supply chain moving forward.
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