Supply Chain Brain has another great article on the benefits of nearshoring. While we at Unionwear prioritize reshoring manufacturing back to the USA, sometimes nearshoring, or friendshoring, is a good option as well.

This is because bringing manufacturing closer to home is a more attractive alternative to the offshoring business operation model. Although offshoring provides numerous benefits, numerous supply chain crises have put both suppliers and retailers at a disadvantage.

Thus, most businesses are considering nearshoring to optimize operations and supply chains. This reshoring and/or nearshoring ensures faster speed to market and quicker transit from manufacturers to customers. On top of that, suppliers and retailers also enjoy the ease of operating in a more convenient time zone.

“Everybody that had extended, long supply chains got clobbered during the pandemic, and one of the solutions is moving your location closer to your market,” former Redwood Mexico president, Troy Ryley, said recently. “The advantage of shorter lead times increases cash-to-cash cycles and provides an edge that many shipping customers cannot match.”

However, while both nearshoring and reshoring are sometimes used interchangeably today, they are not the same.

Nearshoring includes partnering with suppliers, manufacturers and other necessary entities within a supply chain that is located in countries near the company. For instance, a U.S. company might practice nearshoring by working with a supplier in Mexico instead of China.

Reshoring, on the other hand, is the act of bringing manufacturing and production services back to the country or region in which the company operates. For example, a company centered in North Carolina might practice reshoring by working with manufacturers in Georgia.

As global supply chains continue to face several cross-border trade challenges — particularly when importing items from Asia — many companies are adopting nearshoring, investing millions of dollars to situate plants near their target markets. For instance, many manufacturers with a main customer base residing in the United States and Canada are now establishing factories in Mexico.

There’s a lot more at the article. Read more here.