The global supply chain landscape is undergoing a period of significant change, with many companies looking to bring production and manufacturing closer to home.
Following global events such as the COVID-19 pandemic and the conflict in Ukraine, companies have been increasingly looking into reshoring, where production is relocated to home countries, and nearshoring, which brings production to a nearby country, as solutions to avoid constant delays and setbacks.
Benefits like better quality and regulatory control, sustainability, and supply chain resiliency have caused the trend to gain significant momentum for American and European companies. Estimates show that between 16-26% of global production will shift to nearshoring or reshoring by 2026, making this a trend to watch out for.
Increased Quality Control
Bringing production and manufacturing closer to home allows companies to have better control over the quality of their products and adherence to regulations.
It can be very difficult to oversee quality when production is taking place thousands of miles away, especially when time zones and language differences are involved. Near and reshoring give manufacturers the ability to monitor quality closely, ensuring standards are met throughout the entire production process. This also allows companies to react quicker to quality issues, which can reduce waste and help avoid product recalls.
Improved sustainability
Switching to near or reshoring can help a company meet its sustainability goals.
A shorter supply chain will use less energy when transporting raw materials and finished goods, reducing the impact on the environment. Companies also have increased visibility on energy usage and carbon emissions when production is closer, which gives them better control over their carbon footprint.
Amplified supply chain resiliency
An extended and complex supply chain can be vulnerable to global disruptions, as we saw during the COVID-19 pandemic and its aftereffects.
Near and reshoring can create a more resilient supply chain by eliminating friction between companies and outsourced manufacturers, allowing smoother responses to issues and changing customer demands. Additionally, it provides greater opportunity for backup options should a supplier face disruptions, since companies can utilize local sources.
While it’s extremely unlikely that near and reshoring will replace global supply chains entirely, this is a trend we will see more of in the coming years as companies look to strengthen their supply chains and avoid major disruptions.
If you are interested in engaging in discussions similar to this one, join us for the North American Supply Chain Executive Summit, taking place September 16-18 in Phoenix, AZ, and the European Supply Chain Executive Summit, taking place November 11-13 in Barcelona, Spain.
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Colleen Douglas
Senior Marketing Coordinator
Executive Platforms
Colleen joined the Executive Platforms team in May of 2022. She has five years of experience in event marketing, with an emphasis on copywriting and digital strategies.
Colleen has a BA Honours in Business Communications from Brock University and a Diploma in Digital Media Marketing from George Brown College.