At this point, it’s nearly impossible to know the global results of COVID-19. It could take years before the US and the rest of the world know. After working from home has become the norm for many, and the other untold ways our lives have changed, the way people and businesses operate has really been different from 2019. Reshoring is helping to change this reality.
One of the ways this has happened in the business world is in the domestic supply chain. One of the most noticeable ways this is happening is with reshoring. Reshoring, also known as onshoring, is when companies bring their manufacturing process back on American shores. In recent years outsourcing, sending jobs and manufacturing processes overseas, was on a trajectory that seemed like it would never stop or slow.
The delicate balance that has existed built has been smashed. A prime example of this is with China. China was the central hub for manufacturing and factories. It was common to send out the manufacturing process of certain businesses to China due to the low, cost. After COVID their desirable position is now changing.
Various countries have decided to take their manufacturing out of China and back to their shores. It is nothing short of a reshoring initiative. Whether it be Japan or the USA, countries are beginning to look at bringing their manufacturing back to local hands.
A recent piece in Logistics Management Magazine states that:
Over the past 25 years, globalization, lean manufacturing, improved inventory control, and customer service have revolutionized supply chains. And as supply chains have become global and more tightly stretched, the consequences of supply chain failure have grown exponentially.
To balance risk with the quest for eliminating waste and investment in inventory, companies should take a more comprehensive view of the true amount of risk in their supply chains. This involves not only considering inventory levels, but also supplier risk. With the future landscape changing companies really need to find ways to simplify their process and make it less risky. With certain applications of the Lean manufacturing processes and exploring reshoring opportunities the future looks bright.