Real Time Crisis Management Activity – Fortune 10 Company – Contract Manufacturing Relocation

During the recent Trade Wars, a Fortune 10 company’s $2Bn global consumer hardware business was due to be severely impacted by punitive tariffs that would have added a $9 Figure cost liability to its contract manufacturing (then based in China) and global supply chain and fulfilment operations cost base.

Akela staff, with our crisis leadership and global supply chain operations SME knowledge, was part of an international multi-disciplinary crisis response team, assembled within 24 hours of US Treasury announcements. The crisis response team was given two broad directives by company senior leadership:

• The team MUST find solutions in which the consumer hardware business division would NOT attract ANY of the additional punitive tariffs announced by both the Chinese and US side, respectively.
• Any solutions proposed must NOT disrupt any aspects or postpone any HARD deadlines for the upcoming global product launch.

The crisis response team conducted a rapid appreciation of the situation and determined within 72 hours that:

• The company MUST immediately relocate all portions of the contract manufacturing (CM) product lines affected by the looming trade sanctions from China to Vietnam.
• Given the applicable trade sanctions deadline, and with detailed consideration of every component of the end-to-end supply chain operations set up from Origin to Last Mile end consumer, it was concluded that the initial phase of relocating/reshoring of the CM portion of the supply chain had a 6-8 week window to be completed with immediate effect.

Akela staff, working night and day in conjunction with teams in China, Taiwan, Hong Kong, Singapore, Vietnam, London, Australia and US, set about within 7 days of the crisis response team assembling, formulated a business continuity plan (BCP) and commenced execution of the relocation of the entire contract manufacturing site (with over 10, 000 workers, dozens of production lines and company owned manufacturing equipment) from China to Vietnam within 8 weeks – successfully navigating all the regulatory, trade compliance, international shipping, engineering, systems, maintenance, re-tooling, financial, quality control, scheduling and production planning, inventory, major infrastructure/facility relocation, multi-lingual, operational and business processes, commercial contract lifecycle, logistics, and people hurdles that one would expect coming from such a mammoth task!