• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • SCB YouTube
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » The Benefits of Near-Shoring, Reshoring and 'Right-Shoring'

The Benefits of Near-Shoring, Reshoring and 'Right-Shoring'

July 31, 2015

The first wave of offshoring by U.S. manufacturers was driven by one primary factor: low-cost labor. High tech companies flocked to Asia, especially China, in an attempt to slash production expense and protect market share.
 
The strategy proved effective for a while. Then, complications set in. Longer distances between plant and point of sale increased the chances for supply-chain disruptions. Companies were forced to rely on high-cost expedited transportation, as well as safety stocks closer to end markets, to make up for shipping delays. At the same time, factory wages in China began to rise. As a result, the gap between labor rates in Asia and the Western Hemisphere narrowed. In certain cases, it closed up completely.
 
What’s the optimal shoring strategy now? These days, high tech manufacturers must take into account a number of factors, including company size, product specifications and the intensity of customer demands. There’s no one-size-fits-all solution. The key to a successful strategy is flexibility.
 
To be sure, many manufacturers continue to offshore a significant portion of their production. In UPS’s Fifth Annual Change in the (Supply) Chain Survey, 47% of respondents were still making that choice. Another 35% were planning on near-shoring – the shift of manufacturing and/or assembly closer to the point of consumption. That number is up 25 percentage points from 2010.
 
But 45% of the companies surveyed in the latest UPS survey were pursuing a third option: right-shoring. The term describes the practice of optimizing one’s supply chain to make the most of existing costs, skills and infrastructure. The goal is to achieve the best overall margin performance and highest level of customer satisfaction.
 
The definition of “right,” of course, differs for each company. Yet 70% of the high tech executives surveyed by UPS said improved service levels were the top priority behind their decision to pursue a near-shoring strategy. Better control over product quality and intellectual property, as well as the need for manufacturing diversity, were additional factors.
 
There are pluses and minuses attached to every sourcing decision. Still, a carefully considered strategy that draws on multiple factors, with strong consideration of near-shoring and right-shoring options, can speed up time to market, boost the sustainability of supply chains and help high tech manufacturers to better serve growing global markets.

Learn more about shoring strategies by downloading the Change in the (Supply) Chain Survey.

RELATED CONTENT

RELATED VIDEOS

Product Lifecycle Management Global Trade Management Supply Chain Finance & Revenue Management Supply Chain Planning & Optimization Supply Chain Visibility Technology High-Tech/Electronics
KEYWORDS Global Trade Management High-Tech/Electronics Product Lifecycle Management SC Finance & Revenue Management SC Planning & Optimization Supply Chain Visibility Technology
  • Related Articles

    Near-Shoring Is No Cure-all for the Traditional American Worker

    Globally Local: The New Face of Right-Shoring

    Manufacturers Are Considering Near-Shoring - But Just How Near?

Subscribe to our Daily Newsletter!

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • A WORKER IN A WAREHOUSE, SUPERIMPOSED WITH GRAPHICS SHOWING SUPPLY NETWORK

    Enabling Intelligent Visibility With Supply Chain Analytics

    Data Management (Big Data/IoT/Blockchain)
  • A HAND TURNS A LARGE, LIGHTED DIAL WITH THE WORD RISK ON IT iStock-NicoElNino-1364371014.jpg

    Measuring KPIs and KRIs for Comprehensive Supplier Performance Management

    Technology
  • GSCMS-Promo.png

    Watch: Introducing the Global Supply Chain Marketing Summit

    Education & Professional Development
  • A COMPLEX SERIES OF ROADWAYS AND RAMPS, SEEN FROM HIGH ABOVE, IS PARTLY SHROUDED BY CLOUD

    Supply Chain Visibility Isn’t Just a Catchphrase; It’s an Imperative

    Logistics
  • A MAN IN A SUIT SITS LEANING OVER THE BACK OF A CHAIR IN A WOOD-PANELLED ROOM FULL OF LARGE PHOTOS OF OTHER MEN IN SUITS

    UPS Faces Rising Labor Costs, Strike Risk in Upcoming Union Fight

    Last Mile Delivery

Digital Edition

Scb q1 2023 cover

2023 Supply Chain Management Resource Guide: Packing for a Difficult Year

VIEW THE LATEST ISSUE

Case Studies

  • New Revenue for Cloud-Based TMS that Embeds Orderful’s Modern EDI Platform

  • Convenience Store Client Maximizes Profit and Improves Customer Service

  • A Digitally Native Footwear Brand Finds Rapid Fulfillment

  • Expanding Apparel Brand Scales Seamlessly with E-Commerce Technology

  • How a Global LSP Scaled its Security Program and Won More Business

Visit Our Sponsors

Orderful Yang Ming Alithya
Barcoding Blue Yonder BNSF Logistics
CoEnterprise Data Capture Deposco
E2open GAINSystems Generix
Geodis GEP GreyOrange
Here Honeywell Intelligrated IFM
Infor Inmar Keelvar
Kinaxis Korber Lean Solutions Group 2H
Liberty SBF Locus Robotics Logility
LogistiVIEW Lucas Systems MCA Connect
MPO Nvidia Old Dominion
OpenText ORTEC Overhaul
Parsyl PMMI QIMA
Redwood Logistics Ryder E-commerce by Whiplash Saddle Creek Logistics
Schneider Dedicated Setlog Holding AG Ship4WD
Shipwell Tecsys TGW Systems
Thomson Reuters Tive Trailer Bridge
Vecna Robotics Verity
Verusen
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • On-Demand Webinars
    • Upcoming Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2023 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing