Question 1

What are the main benefits of reshoring?

Accepted Answer

The primary benefits include reduced supply chain risk, improved quality control, faster time-to-market for new products, enhanced protection of intellectual property, and positive brand association with domestic manufacturing. For many businesses, the total cost of ownership becomes more competitive when factoring in these advantages.

Question 2

How does nearshoring differ from offshoring?

Accepted Answer

Nearshoring moves operations to a geographically or culturally proximate country to balance cost savings with logistical ease, while offshoring typically involves moving to distant, low-cost countries with a primary focus on minimizing expenses, often at the expense of control and lead times.

Question 3

Is friendshoring just a political trend?

Accepted Answer

No, it is a strategic business response to geopolitical realities. While driven by political alliances, friendshoring addresses tangible business risks like trade disruption, sanctions, and intellectual property theft, making it a growing consideration for supply chain security in strategic industries.

Question 4

Can automation make reshoring more cost-effective?

Accepted Answer

Absolutely. Investments in automation, robotics, and smart manufacturing (Industry 4.0) can significantly offset higher domestic labour costs. This makes reshoring financially viable by improving productivity, consistency, and scalability in a home-country facility.

Question 5

Which strategy is the cheapest?

Accepted Answer

Traditionally, offshoring to low-labour-cost countries offers the lowest direct production costs. However, "cheapest" can be misleading when considering total cost, which must include tariffs, shipping, quality failures, and risks of disruption. Nearshoring or strategic reshoring may offer a better total value.