In recent years, reshoring has become increasingly common in the supply chain industry.  Companies continue to look for ways to not only cut costs but also speed up delivery as customers require quicker delivery. Reshoring offers solutions for both.

What is reshoring?

Reshoring is the process of bringing manufacturing and services back home from overseas. This trend is gaining momentum as companies seek to reduce supply chain risks, improve quality control, and support local economies. By reshoring, businesses can enhance their brand reputation, reduce transportation costs, and respond more quickly to market demands. Embracing reshoring can lead to sustainable growth and a stronger domestic economy. Reshoring is also referred to as in-shoring, or onshoring.

Why are companies bringing their businesses back home?

There are many reasons that companies are choosing to reshore. Some of these include:

Sustainability: By bringing the company’s business back to the country of origin the length of transportation is shortened, leading to reduced emissions.

Technological Advances: With the advancements in technology, companies can save money by putting into place automation and robotics, which can save on labor costs.

Supply Chain Resilience: The pandemic exposed the vulnerability of global supply chains. Getting items from overseas was difficult during that time and because of this companies have shifted away from overseas production.

Economic Factors: While in years past, it was more economical to move production to other countries because the labor costs were significantly less, those labor costs in other countries continue to rise, making it less beneficial to keep production overseas.

Benefits of reshoring

Reshoring offers benefits to not only the company but the economy. These include:

Improved Supply Chain Resilience: As stated before there are vulnerabilities in global supply chains. Bringing the company’s production back to its home country not only avoids this but also cuts the costs of transportation and possibly the lead time of production.

Improved Product Quality: By bringing the production back to the company’s home country, the company may have better oversight of the overall quality of the products being manufactured.

Advanced Innovation: As with the quality of the products produced, by bringing production closer, it will be easier and often quicker to test the products for R & D and advance them quicker.

Economic Effects: The economy of the company’s country will benefit from reshoring. It provides jobs within the country of origin and also helps strengthen local supply chains, reduce transportation costs, and enhance product quality and innovation.  

Lower Costs: The costs can be lower by reshoring. They will be noticed most in the transportation of the products.

Disadvantages of reshoring: 

While reshoring offers great benefits, there are some disadvantages to consider:

Higher labor costs: The cost of labor in North America tends to be higher than in overseas locations. 

Regulations: The United States has more regulations, and they tend to be more stringent than overseas.

Skilled worker shortage: The United States tends to have a shortage of skilled manufacturing workers.

Conclusion

Reshoring has become an increasingly common option for companies aiming to cut costs and reduce risks in their supply chains. By bringing production back to the home country, businesses can benefit from improved supply chain resilience, enhanced product quality, and advanced innovation. Additionally, reshoring supports the local economy by creating jobs and strengthening local supply chains.

However, it’s important to consider the potential downsides, such as higher labor costs, stringent regulations, and a shortage of skilled workers. Despite these challenges, the long-term benefits of reshoring, including sustainability and economic growth, make it a strategic move for many companies in today’s dynamic global market.

Ultimately, reshoring is not just about cutting costs; it’s about building a more resilient, innovative, and sustainable future for businesses and the economy as a whole.

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In recent years, reshoring has become increasingly common in the supply chain industry.  Companies continue to look for ways to not only cut costs but also speed up delivery as customers require quicker delivery. Reshoring offers solutions for both.

What is reshoring?

Reshoring is the process of bringing manufacturing and services back home from overseas. This trend is gaining momentum as companies seek to reduce supply chain risks, improve quality control, and support local economies. By reshoring, businesses can enhance their brand reputation, reduce transportation costs, and respond more quickly to market demands. Embracing reshoring can lead to sustainable growth and a stronger domestic economy. Reshoring is also referred to as in-shoring, or onshoring.

Why are companies bringing their businesses back home?

There are many reasons that companies are choosing to reshore. Some of these include:

Sustainability: By bringing the company’s business back to the country of origin the length of transportation is shortened, leading to reduced emissions.

Technological Advances: With the advancements in technology, companies can save money by putting into place automation and robotics, which can save on labor costs.

Supply Chain Resilience: The pandemic exposed the vulnerability of global supply chains. Getting items from overseas was difficult during that time and because of this companies have shifted away from overseas production.

Economic Factors: While in years past, it was more economical to move production to other countries because the labor costs were significantly less, those labor costs in other countries continue to rise, making it less beneficial to keep production overseas.

Benefits of reshoring

Reshoring offers benefits to not only the company but the economy. These include:

Improved Supply Chain Resilience: As stated before there are vulnerabilities in global supply chains. Bringing the company’s production back to its home country not only avoids this but also cuts the costs of transportation and possibly the lead time of production.

Improved Product Quality: By bringing the production back to the company’s home country, the company may have better oversight of the overall quality of the products being manufactured.

Advanced Innovation: As with the quality of the products produced, by bringing production closer, it will be easier and often quicker to test the products for R & D and advance them quicker.

Economic Effects: The economy of the company’s country will benefit from reshoring. It provides jobs within the country of origin and also helps strengthen local supply chains, reduce transportation costs, and enhance product quality and innovation.  

Lower Costs: The costs can be lower by reshoring. They will be noticed most in the transportation of the products.

Disadvantages of reshoring: 

While reshoring offers great benefits, there are some disadvantages to consider:

Higher labor costs: The cost of labor in North America tends to be higher than in overseas locations. 

Regulations: The United States has more regulations, and they tend to be more stringent than overseas.

Skilled worker shortage: The United States tends to have a shortage of skilled manufacturing workers.

Conclusion

Reshoring has become an increasingly common option for companies aiming to cut costs and reduce risks in their supply chains. By bringing production back to the home country, businesses can benefit from improved supply chain resilience, enhanced product quality, and advanced innovation. Additionally, reshoring supports the local economy by creating jobs and strengthening local supply chains.

However, it’s important to consider the potential downsides, such as higher labor costs, stringent regulations, and a shortage of skilled workers. Despite these challenges, the long-term benefits of reshoring, including sustainability and economic growth, make it a strategic move for many companies in today’s dynamic global market.

Ultimately, reshoring is not just about cutting costs; it’s about building a more resilient, innovative, and sustainable future for businesses and the economy as a whole.

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ABOUT KEM KREST

Kem Krest, a certified minority business enterprise (MBE), is the nation’s leading provider of supply chain optimization solutions to automotive, powersports, and heavy-duty OEMs. Through our dedicated team members, lean operating system, and streamlined technology, Kem Krest ensures a resilient and uninterrupted supply chain for the programs we manage.

Through customized end to end solutions that address every facet of the supply chain—from inventory management, fulfillment, warehousing, kitting, packaging, logistics, and transportation management, Kem Krest enables companies to increase operational efficiency, deliver superior customer and employee experiences, focus on growth initiatives, and achieve cost savings.

Kem Krest partners with companies to virtualize their supply chains through a growing network of 12 facilities in the US and Canada, featuring 1.75M sq. ft. of warehouse space and 600+ full-time team members. For more information, please visit Kem Krest’s website at www.kemkrest.com.