How Jabil's BESS Partnership will Simplify Sourcing

Global manufacturing solutions provider Jabil has announced an expansion of its partnership with metal parts manufacturer Inno, a subsidiary of Shanghai Xinpeng Industry Co. (XP). 

The move involves a joint investment in a new facility in Thailand dedicated to producing battery energy storage system (BESS) enclosures, a decision that could signal a major change in sourcing strategies for the renewables sector.

This collaboration addresses growing procurement concerns over supply chain diversification and geopolitical risks.

Strategic sourcing for BESS components

From a procurement perspective, the BESS enclosure market has historically been reliant on sourcing from China. These essential components account for a large portion of total system costs due to raw material expenses and complex welding needs.

The conventional supply chain model involves manufacturing these enclosures in China before shipping them to other suppliers for final integration closer to end markets.

This new Thai facility, operated by Jabil and Inno, could provide an alternative sourcing route.

The site’s location is a key procurement advantage. Situated just 25km from Laem Chabang, Thailand's largest port, it offers direct access to global shipping lanes. This strategic positioning could allow Jabil to build a comprehensive lifecycle solution for BESS customers, covering sheet metal processing, fabrication, welding and coating from a single cost-effective location.

Vertical integration to mitigate supply chain risk

The collaboration aims to create a more resilient and simplified supply chain for customers in the energy sector. By bringing multiple manufacturing stages under one roof, the partnership could reduce dependencies on single-source regions and streamline the production process. This vertical integration is a direct answer to increasing market volatility.

According to Brent Tompkins, SVP, Global Business Units, Renewables and Energy Infrastructure at Jabil, this has been a long-term strategy.

"For over a decade," says Brent, "our team has helped energy storage leaders design and integrate technologies like battery management systems, power electronics and high-level assemblies into their BESS solutions.

"Our customers are increasingly looking to diversify their supply chain in the face of tariffs and geopolitical uncertainty.

"We're excited to offer this critical industry a vertically integrated solution that meets their needs, from enclosure production to final integration and fulfilment, while simplifying sourcing and reducing risk."

Collaborative procurement for energy market growth

This partnership is designed to benefit both companies and their clients by addressing key market demands for both stability and competitive pricing. For Inno's parent company XP, the collaboration is a vehicle for growth within the expanding energy storage market. Battery energy storage is fundamental to creating a more flexible and resilient global energy system, supporting the grid as renewable generation increases.

Jeffrey Shen, CEO of XP, says: "Our collaboration with Jabil will accelerate Inno's growth in the energy storage market, bringing the potential of renewable power to more communities around the world, especially in support of the growing energy demand of AI infrastructures globally.

"Together, we can provide customers with increased supply chain resiliency at a competitive price point."

As the electrification of transport and industry continues to gather pace, such procurement and supply chain strategies are essential for stabilising energy grids during periods of peak demand.

Join Jabil at Procurement & Supply Chain LIVE

Fireside: Procurement is a value driver, not a cost centre, with Frank McKay, Chief Supply Chain Officer, and Graham Scott, Chief Procurement Officer at Jabil

Join Frank McKay at Procurement & Supply Chain LIVE: The US Summit in Chicago.

With more than 25 years of procurement experience in the manufacturing industry, Frank now leads Jabil's supply chain division as Chief Supply Chain Officer. 

His experience leading global teams has seen the implementation of intelligent supply chain strategies and delivering year-on-year material cost objectives.

"I got the procurement bug and decided this was an area that would continue to evolve," Frank says. "It was a time when technology was just starting to become part of the ecosystem of procurement and supply chain."

Procurement & Supply Chain LIVE: The US Summit

Procurement & Supply Chain LIVE: The US Summit takes place on 21-22 April, bringing together senior procurement and supply chain leaders focused on innovation, strategy and transformation in their organisations.

Co-located with Sustainability LIVE: The US Summit, the event provides a comprehensive view of procurement and supply chain’s evolving role in driving business value and sustainability.

It will also feature the inaugural US awards, which will be presented during a black-tie gala dinner at Navy Pier, uniting the leaders driving procurement and supply chain excellence across the US and Canada.

The awards ceremony will take place following Day 1 of the US Summit.  

Early bird tickets (saving you more than £200) are available here.