In recent years, global supply chains have encountered challenges such as trade conflicts, political volatility, natural calamities, and the COVID-19 pandemic. Consequently, numerous companies in the United States have had to reconsider their supply chain approaches. For instance, some are halting decades of outsourcing and offshoring by bringing their production back home or closer to it. The onshoring approach enables businesses to mitigate supply chain risks, enhance flexibility, and bolster resilience in disruptions. In this article, we will explore the concepts of two popular onshoring strategies: reshoring and nearshoring. Differences Between Reshoring and Nearshoring Reshoring and nearshoring are different strategies companies can use to relocate their production operations. Reshoring brings production back to the home country from offshore locations. This approach is often employed to reduce risks associated with global supply chains, such as rising costs and disruptions caused by natural disasters. On the other hand, nearshoring involves relocating production to a nearby country or region. Its objective is to achieve similar benefits to reshoring while capitalizing on the advantages of lower production costs in neighboring areas. It is particularly popular among U.S. and European companies looking to relocate production to other countries, such as Mexico or Canada. Advantages of Reshoring and Nearshoring Businesses can enjoy numerous benefits that help them stay competitive by bringing production closer to home. The following are the most significant advantages of using the two strategies: Reduced Lead Times Businesses can bring their products to market faster by reducing lead times. This can be advantageous in industries where innovation and speed are key drivers of success. Moreover, shorter lead times enable businesses to respond more flexibly to market changes. Increased Inventory Turns Inventory turns refer to the number of times a company’s inventory is sold and replenished within a given period. By using these techniques, businesses can prevent overstocking, reduce the risk of obsolescence, and lower carrying costs. They can also free up capital that may have been tied up in excess inventory. Closer Proximity to Suppliers Closer proximity to suppliers can help businesses more easily collaborate and communicate with suppliers. Reduced transportation cost is also a benefit, as they may be able to use ground transportation rather than air or sea freight. More Local Job Creation Both onshoring strategies can create more jobs locally, as companies often require additional workers to assist with increased production. This can have a range of favorable impacts on the local community and economy. Lower Total Cost of Ownership (TCO) TCO is a calculation that considers all costs associated with owning a product or service over its lifetime. These include initial purchase price, maintenance, repairs, transportation, and disposal. Through reshoring and nearshoring, businesses can reduce transportation costs, reduce or eliminate import and export taxes, and improve lead times. These actions can all lower TCO. U.S. Economic Strengthening One of the advantages of these strategies is that they can increase consumer spending, ultimately boosting the competitiveness of U.S. businesses. Both methods can also lead to increased investment in research and development as companies seek to improve their processes to remain competitive. Trust Jamestown Plastics for Exceptional Reshoring and Nearshoring Solutions! Jamestown Plastics is well-positioned to support companies in their production initiatives. As a local supplier of thermoformed products and packaging, we can provide businesses with high-quality products manufactured in the U.S. We also offer material handling totes and trays to help transport components and goods more efficiently. One of our innovative solutions is the Clamtainer® performance clamshell. This can be an efficient pack-out solution for companies looking to bring bulk products closer to the distribution point. Moreover, using Clamtainer® rather than shipping pre-packaged products from the factory can help companies save on shipping costs and reduce waste. Contact us today to learn more about our capabilities!