Global trade dynamics and regionalization are rapidly increasing supply chain complexity and generating new opportunities. To succeed, companies must take into consideration not only what they make, but where they make it.
How to choose the location of your operations
Errors in planning the location of your operations may result in increased costs or lead times, inherently slowing time to market. Prototyping a product that was ideated on the other side of the world often means long delays as iterations are shared back and forth. Conversely, selecting a manufacturing location based solely on proximity to your current operations could result in costly taxes and tariffs. An experienced partner with global scale and regional expertise can help you shift between regions to help you base your operations where it makes sense for you.
The right decision can improve your bottom line
Determining the right number and location of suppliers, design centers, manufacturing sites and distribution centers can be challenging on a global stage. You need a solution that provides the right balance of flexibility and cost efficiency, while also meeting the requirements of a dynamic market.
For one customer in Brazil, local manufacturing made up 5% of their total sales. The combination of excessive travel between regions and complex design issues was hampering decision making and dramatically increasing lead time. Consequently, new products weren’t available in the market until 12 months after their global launch. By exploring local manufacturing options, we were able to develop an improved supply chain model to achieve better savings, subsequently increasing their margins by 20-30%. More importantly, their New Product Introduction (NPI) lead time dropped from 12 months to 3 months, reducing their time to market by 75%.
Simulation and analytics tools help design an effective supply chain
Often, only the benefit of hindsight can reveal the effects of implementing changes before they’re made – but our advanced simulation and analysis tool is a close second. We use this internally developed tool to run a diagnostic on your supply chain network for potential changes in tax and trade policies, identifying the biggest risks and opportunities and quantifying the impact of those changes on your supply chain.
We used this tool in reviewing the manufacturing strategy of one customer building server farms in Latin America to assess how they could increase their competitiveness. Our assessment revealed that building in-region would allow the customer to qualify for government incentives and create jobs in the local economy. Combining our proprietary analytics tool with the extensive experience of our locally based team, we developed multiple import and manufacturing scenarios, enabling the customer to select the best option. This ultimately resulted in cost savings of 20% for the customer.
Introducing new products and entering new markets often means navigating complex and unfamiliar terrain. Lessons learned in hindsight can mean the success or failure of a company. Partnering with Flex means having the collective knowledge of design, manufacturing, tax and trade, supply chain and beyond at your disposal – helping you generate cost efficiencies, minimize risk and speed your time to market.