Why Nearshoring and Reshoring are on the rise?
The world of manufacturing is changing. Amongst others, consumer packaged goods companies and retailers are starting to bring production back home (reshoring) or to nearby countries (nearshoring) driven by rising global risks, supply chain disruptions, and a changing geopolitical landscape.
One major factor? Tariffs - The wider imposition of tariffs on countries like Russia, China, and Iran is making local production more attractive.
But there's a key factor many overlook when deciding where to manufacture: the true lifecycle cost.
Let's say you're a retailer who sources products from China. Sure, the unit cost may be lower. But have you considered:- Lost sales from 4–6-week shipping delays?
- Clearance costs for late seasonal items?
- Customer attrition from stockouts?
- Unstable utilities and production disruptions?
These hidden expenses add up fast. That's why forward-thinking companies are measuring total cost from design to sellout. They're finding that higher gross margins and faster replenishment from local production often outweigh the "savings" from offshoring.
The reshoring trend isn't just for old-school industries either. Electric vehicles, AI, drones, and defense are all investing in bringing high-tech production closer to home.At Martec, we get it. Our training programs dive deep into supply chain strategy, teaching you to look beyond surface-level costs. Want to optimize your procurement for speed, agility and true cost efficiency? Want to know more? Take a look at our courses to see what we provide.
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Posted by Brian Hume
25th October 2024