“Onshoring is the new Offshoring.” - The Manufacturer
Onshoring is the strategy of resolving the entire production process of an institution within the country to make the supply chain more local and controllable.
Countries like the USA and Europe, especially after World War II, placed great importance on Offshoring for many years. This has developed other countries economically and technologically, leading to an indirect technology transfer.
In recent years, the interest in Offshoring has relatively decreased for the following reasons;
Problems in ports
New war scenarios
Problems occurring in sea routes.
For instance, during Trump's time in the USA, there was a tendency to pull many productions from abroad into the country.
Recently, due to the significant impact of the crisis between China and Taiwan on chip production, the topic of Onshoring has gained even more importance.
Better quality control
Faster response times
Quicker delivery times
Reduction in inventory costs
Contributing to the local economy
Better resilience to international crises
Competitive advantage due to time benefit
High labor costs
Initial investment costs
Local regulatory adaptation problems
Lack of skilled workforce
The danger of losing the price advantage
The problem of putting all eggs in one basket
Onshoring vs Nearshoring
Deep-rooted economic and technological changes in recent years indicate that Onshoring will become increasingly important. The above explanations also support this. Of course, providing a one-size-fits-all solution for institutions' operations is impossible. However, it's an approach that should be considered in planning based on the field of activity.