Supply Chain Reshoring

The ongoing disruptions in global supply chains have prompted many organisations to reconsider their sourcing strategies and explore the concept of supply chain reshoring. Supply chain reshoring involves bringing back manufacturing or sourcing activities to the home country or closer to the end market. Philip Wessely, Partner at Kearney, will be presenting on this topic at the upcoming Supply Chain Risk and Resilience Forum on 30th May - 1st June 2023. In this article, we will discuss how supply chain reshoring offers not only cost savings but also enhanced resilience.


Traditionally, organisations have offshored their production and sourcing to countries with lower labour and production costs. This approach has resulted in longer and more complex supply chains, which are susceptible to disruptions caused by geopolitical tensions, natural disasters, or unexpected events like the COVID-19 pandemic. These disruptions have highlighted the need for greater supply chain resilience.


Supply chain reshoring presents an alternative approach that offers both cost savings and improved resilience. While reshoring may initially appear as a tradeoff between higher costs and enhanced resilience, a closer examination reveals that it can actually deliver benefits in both areas.


One significant advantage of reshoring is the reduction in supply chain complexity. By shortening the distance between production facilities and end markets, organisations can streamline their supply chains, reducing lead times and increasing responsiveness to customer demands. This enhanced agility helps organisations better manage demand fluctuations and mitigate risks associated with longer lead times.


Moreover, supply chain reshoring enables organisations to improve control and visibility over their supply chains. Proximity to suppliers and manufacturing facilities allows for closer collaboration and better monitoring of quality and production processes. This level of control helps organisations identify and address potential issues more quickly, reducing the likelihood of quality defects or delays in delivery.


Reshoring also contributes to improved risk management. When production is geographically dispersed, disruptions in one region can have a cascading effect on the entire supply chain. By reshoring production, organisations can diversify their sourcing and manufacturing locations, spreading the risk across multiple regions and reducing vulnerability to localised disruptions.


Furthermore, reshoring can result in cost savings over the long term. While labour costs may be higher in certain regions, reshoring can lead to efficiencies in transportation, inventory management, and communication. Proximity to suppliers and customers can also reduce transportation costs and lead to faster delivery times, ultimately improving customer satisfaction.


It is important to note that supply chain reshoring requires careful analysis and strategic planning. Organisations need to evaluate factors such as total landed costs, infrastructure capabilities, and availability of skilled labour in the home country or closer regions. Collaborative partnerships with suppliers, investments in automation and digital technologies, and government support can facilitate a successful reshoring strategy.


In conclusion, spply chain reshoring is not a tradeoff between cost savings and resilience, but rather a strategic approach that offers benefits in both areas. The presentation by Philip Wessely, Partner at Kearney, at the Supply Chain Risk and Resilience Forum on 30th May - 1st June 2023, will shed light on the potential advantages of reshoring and how organisations can leverage this strategy to achieve cost savings and enhance supply chain resilience. By embracing reshoring, organisations can build more agile and resilient supply chains while reaping the benefits of reduced costs and improved customer satisfaction.


To register or learn more about the Forum please check here:

For more information and group participation, contact us: [email protected]