Power Tools Manufacturer Reduces Costs by Moving to Vietnam

For the past decade, manufacturers have increasingly looked towards South East Asian countries to relocate or expand their manufacturing base from China. These South East Asian countries, with their proximity to China, low costs, available land and competitive tax incentives, provide many of the same benefits as China once did.

Due to an escalation of the trade war and companies increasingly adopting the China Plus One model, more and more companies than ever before are making the shift. However, relocating entire supply chains, or parts thereof, after years of operating in China comes with its own set of complications.

The case study below introduces a few of the challenges a company may face while relocating their manufacturing operation.

Download the full case study below. 

Executive Summary

To reduce costs and trade risks, a US-listed manufacturing conglomerate specializing in the production of power tools, sought to relocate their long-term operations from South China to Vietnam. The manufacturer required help from an experienced team in determining the best location, method and factory to manage the impact of relocating into a region that is still developing its supply and infrastructure network.

Challenges

Our client faced the following challenges in shifting to Vietnam:

1. Deciding where to strategically locate their factory to integrate it into the supply chain as seamlessly as possible.
2. Quickly and cost-effectively scaling operations to minimize the impact of a supply chain shift.
3. Finding a factory to acquire that best suits their requirements.

Solutions

We helped our client overcome their challenges by:

1. Analyzing which region and industrial zone would best lessen supply chain disruption.
2. Conducting a feasibility study to determine the most cost-effective solution to relocate long-term operations.
3. Researching suitable facilities to target for acquisition, taking into consideration product requirements and short and long-term goals.

Impact

Client determined an M&A would best support their short and long-term goals in the region. They were able to select from a list of targets most suitable for their operations and existing supply chain, saving money, time and manpower otherwise spent establishing a sourcing network.

Download the full case study below.

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