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Contributed by: Admin 2

Restructured Supply Chains

Reshoring as a Solution to Minimize Supply Chain Disruption

Contributed by Rich Dacey and David Snell, Client Relations Executives

Traditionally, supply chain leaders implemented strategies of moving their manufacturing and distribution overseas for financial viability. Before the pandemic hit, globalized supply chains were not only cost effective but were also useful for accessing new markets and reaching new customers. However, various challenges in recent times have significantly impacted the feasibility of global supply chains. Some of these disruptions include an earthquake and tsunami in Japan, floods in Thailand, a US-China trade war, the COVID-19 pandemic, and blockage of the Suez Canal [1]. Consequently, manufacturers require new supply chain resilience strategies such as reshoring to localize the most important parts of their supply chains.

 “Reshoring is the process of bringing manufacturing and part or all of the supply chain back to the home country from a foreign country. Nearshoring is a similar process, but refers to a location near the home country. In the case of U.S. businesses, nearshoring most often means sourcing from or manufacturing in Mexico.” – Supply Chain Dive [2]

Given the current circumstances, industrial manufacturers should strike a balance between overseas and localized parts of their supply chains. While reshoring is an effective strategy to resolve the ongoing disruptions, industries will continue to have global supply chains but with partial reshoring and manufacturing capabilities. While reshoring to bring back manufacturing and other services back to the U.S. is the next logical step, it is critical that industrial businesses must map out the parts of the supply chain that will be beneficial to reshore in terms of cost efficiency, supply chain resilience, better agility, higher quality control, and greater control of production processes. Industrial manufacturers need to recalibrate the delicate balance between onshoring and offshoring to maintain the autonomy needed to survive future crises while supporting a consumer-driven economy and sustainable resources [3].


[1] Deloitte Insights: Reshoring or localization on your mind?

[2] Supply Chain Dive: The 5 Ws of Reshoring Supply Chains

[3] Forbes: Why Reshoring U.S. Manufacturing Could Be The Wave Of The Future