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Onshoring

“Onshoring is the new Offshoring.” - The Manufacturer


Definition

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.


History

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;

  • Regulations

  • Problems in ports

  • Wars

  • New war scenarios

  • Pandemics

  • Coups

  • 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.



Opportunities

  • Better quality control

  • Faster response times

  • Quicker delivery times

  • Reduction in inventory costs

  • Contributing to the local economy

  • Better resilience to international crises

  • Improved cooperation

  • Competitive advantage due to time benefit


Risks

  • High labor costs

  • Initial investment costs

  • Supplier dependence

  • 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


In Conclusion...

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.



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