#170 – Inside Our Industry – Reshoring improves service while reducing supply chain risk

Posted on | Inside Our Industry

Reshoring continues to be in the headlines for US manufacturers. The following post outlines specific benefits, as well as strategies for manufacturers when it comes to reshoring.

Reshoring improves service while reducing supply chain risk
By Daniel Harms, Optimas, Americas, 10/1/2023

Since the demands on the supply chain during and just after the pandemic heightened the attention on how we manufacture and deliver goods, there has been quite a movement to bring manufacturing and distribution closer together in what is known as “reshoring.”

More than ever before, resource availability has given way to accessibility in the form of localization, which reduces lead time and risk, enhances opportunities for future innovation and boosts the quality of a customer’s final product. Simply put, your supplier is only as good as its ability to source and deliver parts as specified.

There are several benefits that onshore manufacturing offers the opportunity to streamline supply chains and reduce risk:

  1. Access to higher-quality materials when sourcing close to home. – Choosing to source closer to home can give you some peace of mind about the quality of the materials you’re receiving, reducing manufacturing costs and bringing consistency and predictability to your supply chain.
  2. Fewer inventory surpluses. – According to studies in demand and consumer trends, you can improve cash flow by keeping less inventory on-site and making orders more flexible.
  3. Better, more localized customer service. – Hosting production and customer service in the same location means you can provide buyers with more personalized and efficient customer service.
  4. Shorter lead times. – The most significant distinction with onshoring is saving time. You automatically streamline your supply chain when you cut out global shipping times, delays, and customs clearance.
  5. Reduced risk. – Before the pandemic, there was a push toward globalization of materials that allowed for more budget-friendly products due to low-cost manufacturing, making the inherent risk worth it due to the cost efficiency. Sadly, the global pandemic has highlighted how detrimental it was to disregard risks.

So what onshore strategies for more supply chain stability would we impart to other manufacturers?

  • Be flexible … in the materials you use and source them locally.
  • Be agile … with your supply chain and particularly with your suppliers.
  • Be strategic … with the supply chain partners you work with.
  • Plan ahead … the importance of good data is paramount because it allows you to confidently predict aspects of the supply chain and makes you more prepared.
  • Build trust and communication across the supply chain … transparency matters now more than ever.
  • Go with experience … collaborating with an experienced partner that’s been here before carries extra weight.

Optimas is a leading global industrial distributor and service provider specializing in fastening and supply chain solutions for manufacturers seeking to improve efficiency and profitability.

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