Nearshoring Picks Up Steam

Nearshoring Picks Up Steam

All of the global supply chain snafus that have taken place over the past two years have caused many manufacturers to reexamine their supply chain and production networks. The question they all seem to be asking is: Should we bring production closer to consumption? A new report from Accenture indicates that answer is “yes.”

Gathering responses from more than 1,000 executives at companies with U.S. operations and revenues greater than $1 billion, the report finds companies are shifting their manufacturing back onshore, nearshore, and to new “friend-shoring” (countries that are allies/friends of the United States) locations. The reasons cited for doing so include the pandemic, trade wars and tariffs, rising labor costs, tech innovation, the war in Ukraine, the climate crisis, and changing customer expectations.


Here’s a closer look at the key findings:

  • 94% of companies are planning direct investment in onshoring or nearshoring.
  • 85% want their factories and incoming material sources to be in the same hemisphere, while 78% want their factories to be within four time zones of the customer.
  • 54% say manufacturing closer to home is key to survival.
  • 1% say they can continue to grow with their current manufacturing footprint.

To make these nearshoring plans work, survey respondents report a focus on large-scale digital transformations of their supply chains as well as a switch to “smart” factories. These executives also say a new type of workforce will be required and that companies will need many more automation and robotics technicians.

“There is still such a great deal of untapped potential in the circular economy. Supply chain leaders can use the inflationary environment as a catalyst to reshape their relationship with materials. Instead of losing materials out of the economy in the form of waste, the circular economy helps capture value.”

—Sarah Watt, VP Analyst, Gartner Supply Chain Practice