Building rebalanced and resilient supply chains

Rebalancing supply chains

Not only is Asia Pacific’s booming middle class getting larger and wealthier – it is also becoming more demanding.

As the region’s middle class grows, so do consumer demands. To meet these demands, multinational companies targeting these consumers increasingly need to establish regional production presence. Local production can mean being more responsive to customer needs, and more price competitive.

At the same time, the supplier and production landscape in Asia Pacific is rapidly maturing, offering companies a broad range of possible locations outside established hubs such as China.

The offerings are diverse, with different markets varying in specific manufacturing capabilities, production costs and incentives being extended to global investors.

Creating resilience

A relentless drive toward reducing costs has spread supply chains across the globe in recent decades. But that efficiency has come at a cost of its own.

Maintaining visibility across these complex, expansive systems has proved difficult, and ‘just-in-time’ systems have left little capacity to absorb shocks, leaving supply chains brittle.

For many industries already grappling with uncertainty – from geopolitical tensions, rising manufacturing costs in traditional production hubs and natural disasters – the pandemic disruption has shown the necessity of rebalancing global supply chains towards more regional networks, while also making them more resilient.

“The pandemic is only the latest disruption to uncover the fragility of global supply chains, reinforcing the need to rebuild for the future. Asia Pacific is poised to become the world’s growth engine, but will need businesses to prioritise supply chain transformation for resilient growth.”

–  Sridharan Nair, PwC Asia Pacific Vice Chairman, Markets


Time for change

Many factors are fuelling a fundamental shift in production and supply landscapes, but a fast-maturing Asia Pacific means opportunity – not just to manufacture in, but also to source from and sell to.

Seizing the moment to take advantage of this opportunity means rethinking supply chains, rebalancing them and making them more resilient.

It means responding to changing market needs, while reducing the response and recovery time from potential bottlenecks.

Key steps for building rebalanced and resilient supply chains

Prioritising supply chain vulnerabilities and enabling profitable redundancy

Rebalancing supply bases for increased regional consumption

Realigning regional production footprints

Developing digitally integrated supply chains


Enhancing visibility to all customers – not just high-value ones – through digital tech empowers companies to communicate quickly and clearly during crises and normal times, improving customer experience.


Establishing a technology driven central control tower to manage regional production plants and supply networks: Real-time links between different supply chain elements - Drive end-to-end supply chain planning - Alert stakeholders to potential disruptions - Detect vulnerabilities and improve predictability

Instituting a ‘just-in-case’ approach


Prioritising supply chain redundancy for higher-value customers allows companies to not only maintain supply during crises, but can also improve customer experience by allowing quicker delivery during normal times.

For financial viability, companies should select the most critical points in the supply chain – those for which the cost of a potential disruption far exceeds the cost of building back-up capacity.


Step 1:


  • Undertake a detailed supply chain mapping exercise.

  • Identify high-risk or more vulnerable supply chain segments.

Step 2:

Building redundancy

  • Build a buffer

  • Identify multiple supply options

Instituting a 'just-in-case' approach

“Reacting to recent disruptions, supply chain investments have gained momentum across Asia Pacific. Many companies are developing alternative buffer sites to minimise disruption risks, while others are building digital control towers for end-to-end visibility over regional partners.”

– Steve Thompsett, Chief Customer Officer, DHL Supply Chain Asia Pacific

Rebalancing supply bases for increased regional consumption

Cost and quality have long been the benchmarks for supplier selection, but recent supply shocks mean that supplier reliability must now be a major consideration.

Businesses must be able to effectively address changing market needs while becoming faster to respond to and recover from potential bottlenecks.

Success in this new world requires a more holistic selection framework.

How multinationals can choose the right suppliers

Supplier performance assessment:
can the supplier offer a competitive solution?

Supplier reliability assessment:
what is the supplier’s exposure to and visibility of key risks?

Learn more about partnering with the right suppliers here


Supply chain management to the fore: Long supply chains hinder visibility, introducing unacceptable levels of risk. Once regional suppliers are selected, a robust management process must also be established to monitor supplier performance on environmental impact, social responsibility and governance practices. - Establish strong ESG monitoring and reporting practices. - Work with regional suppliers to build ESG expertise.

“Trade disputes and rising operational costs are driving footprint diversification in Asia Pacific. Besides being cost competitive, growing infrastructure investments and strong incentive packages are making it attractive to relocate production to new locations in Southeast Asia.“

- James Hwang, Chairman and CEO, Getac Technology Corporation

Realigning regional production footprints

Much has changed in the decade since China overtook the US as the world’s leading manufacturing destination.

Higher costs and tighter regulations – combined with an increased need for resilience – are calling into question the original business case and risk assessments for manufacturing in mature production centres. These factors are combining with the growing opportunities in Asia Pacific to make realigning regional production footprints increasingly attractive.

For those considering expanding their production footprint into Asia Pacific, there are two vital considerations:

  • How to strengthen due diligence processes to shortlist the right locations, and 

  • How local partnerships can help reduce entry risks and costs

1. Strengthening due diligence

Factors to be considered

Examples include: Reliability of local suppliers; Existing logistics infrastructure; Maturity of ICT infrastructure
Examples include: Local availability of necessary skills; Challenges in attracting outside talent; Cost of hiring and retaining talent
Examples include: Natural hazards and climate change risks; Corruption and security risks; Environmental and labour laws; Community reaction to industrial development
Examples include: Tax burden and transfer pricing norms; Ease of trade with major regional and global players; Incentives for foreign investment; Support for companies entering the region; Ease of starting a new operation; Strength of intellectual property protection

2. Strengthening local partnerships

Potential partners to consider

Contract manufacturers

These can:

  • Give businesses Asia Pacific experience
  • Help smaller companies benefit from economies of scale
  • Deliver specialised capabilities
Government-led investment promotion agencies

Government-led investment promotion agencies can, for example:

  • Help negotiate incentives
  • Identify potential locations
  • Establish connections with other partners.
talent partners

These include:

  • Local recruitment agencies 
  • Local media partners
  • Local educational and training organisations

“The fundamentals that have underpinned Asia Pacific’s dramatic growth and prosperity over the past three decades are not sufficient to carry us through this era of continuous disruption.”

- Raymund Chao, PwC Asia Pacific Chairman, PwC China Chairman

Rethinking supply chains is just one element that businesses in Asia Pacific must act upon to safeguard the region’s continued growth.

The era of passive growth is over; it is now time to act.

Building a resilient future for Asia Pacific will also require:

  • Advancing the digital economy
  • Enabling regional enterprise growth
  • Future-proofing the labour force, and
  • Building towards a net-zero economy.

Learn more in PwC’s Asia Pacific’s Time report.

Find your local Asia Pacific contact

Christopher Kelkar

PwC Asia Pacific Vice Chairman, Operations, PwC United States


Sridharan Nair

PwC Asia Pacific Vice Chairman, Markets, PwC Malaysia


David Wijeratne

Partner, Growth Markets Practice, PwC Singapore

+65 9759 1784


Oliver Sargent

Partner, Sydney, PwC Australia

612 8266 0461


Jason Hayes

Partner, Assurance, Sydney, PwC Australia

+61 407 232 142


Gary Dutton

Partner, National Trade Leader, Brisbane, PwC Australia

+61 434 182 652


Thomas Leung

Markets Leader, PwC China

+[86] (10) 6533 2838 / +[852] 2289 8288


Ay-Tjhing Phan

Markets Leader, Jakarta, PwC Indonesia

+62 21 509 92901


Yukinori Morishita

Markets Leader, PwC Japan


Roderick Danao

Vice Chairman and Assurance Partner Markets Leader, Makati, PwC Philippines

+63 (2) 459 3065


Kok Weng Sam

Markets Leader, PwC Singapore

+65 9367 3340


Kevin Lin

Markets Leader, Taipei, PwC Taiwan

+886 2 27296666, x25230


Niphan Srisukhumbowornchai

Markets Leader, Bangkok, PwC Thailand

+66 (0) 2844 1000 ext. 4723


David Tay

Markets Director, TP.HCM, PwC Vietnam

+84 28 3823 0796, Ext. 4691


Redha Shukor

Consulting Partner, Operations & Transformations , PwC Malaysia

+60 (3) 2173 1832


Peter Chambers

Partner, Food & Fibre Leader | Finance & Operations Leader, PwC New Zealand

+64 21 404 015


Marc Philipp

Consumer and Industrial Products Leader, South East Asia Consulting, PwC Singapore

+65 8223 1503


Nguyen Luong Hien

Partner, Deals/Strategy, Ho Chi Minh City, PwC Vietnam

+84 28 3823 0796


Steven Zhong

Sustainability Strategy & Transformation Lead Partner, Shanghai, PwC China

+[86] (21) 2323 5349


Jenny Chong

Asia Pacific International Tax Services Leader, China Tax Digital Products & Solutions Leader, Shanghai, PwC China

+[86] (21) 2323 3219


Sarah Stewart

Partner, PwC Australia


Daimi Tanaka

Partner, PwC Japan


Jacky Lu

Partner, PwC Taiwan


Joanne Robinson

General Manager, Auckland, PwC New Zealand



Nurul A'in Abdul Latif

Executive Chair, PwC Malaysia

+60 (3) 2173 0935


Nurul A'in Abdul Latif

Executive Chair, PwC Malaysia

+60 (3) 2173 0935


Paulson Tseng

Tax Reporting and Strategy leader, PwC Taiwan

+886 2 27296666 23672