Are supply chains ready for nearshoring?

With ongoing complexities in Asia as a major driver, more companies are diverting their manufacturing operations away from China in favor of Mexico and other countries. Despite these efforts to adjust production networks, the question of if companies are “truly ready to change their end-to-end supply chain” remains.

Shifting to a new supply base typically sparks discussion about how companies’ inbound lanes would change, but the conversation is missing the piece on how their supply chain partners are going to change.

Are they ready to respond to this new supply chain that’s going to be set up?

While progress is being made on the labor, technology and establishing manufacturing infrastructure side of reshoring but when you connect the dots, there are so many players which play a role to string things together.

Sometimes your weakest link happens to be the one that hurts you the most, and that’s not being talked about a lot right now. This includes everything from modal changes to customer service.

Although companies are implementing nearshoring and other strategies to navigate supply chain risks, the second half of the year remains volatile and companies will need to know the cost of failure and solutions.

Knowing the cost of failure is critical because you can anticipate how much one is willing to invest in a solution to understand viable likely alternatives. And out of those alternatives, the best could be doing nothing at all. But that allows you to ensure that you are prepared to have options on the table in case disaster does strike.