3 tips to help you with your nearshoring or reshoring strategy

Are you seeking to rely less on imports and source more locally? You're not alone. With the ports experiencing severe backups and lengthy delivery days, it comes as little surprise that businesses are diversifying their supply chains, whether by returning them to where they used to be through reshoring, or to a country that's closer to them (nearshoring). Indeed, nearly 85% of manufacturers intend to reshore within the next few years, according to a survey conducted earlier this year by Thomas. That's up from 54% in a similar survey that was performed prior to the pandemic's arrival.

While nearshoring and reshoring may help to resolve many of the issues producers continue to face in the aftermath of the coronavirus, a 2020 report shows that numerous companies were localizing their supply chains well before COVID-19 entered into the public consciousness. Indeed, according to the ReShoring Initiative, nearly 1,400 companies in 2018 alone reshored elements of their production operations. That marked the largest uptick in reshoring activity in the history of the Reshoring Initiative tracking this measure, rising 38% compared to 2017.

It's one thing to want to reshore; it's quite another to go about it effectively. Here are a few tips that can help you reshore or nearshore successfully so you can better compete with those organizations that have taken similar supply chain measures:

1. Consider turning to a nearshoring alliance for help with recruitment
A major factor that goes into nearshoring is finding labor, which can be a Herculean task when you don't know much about the host location aside from the basics. To help with this you may want to turn to a nearshoring alliance for assistance. According to Forbes, a nearshoring alliance can save you a considerable amount of time and money when it comes to finding individuals who have experience in your line of work. Additionally, it can help lower the costs of operation if you find talent in parts of the country where the cost of living is more affordable.

Reliable and clear communication is critical to nearshoring.

2. Establish crystal clear communication lines
Regardless of your industry, the most important aspect of bringing your supply chains closer is ensuring that everyone is on the same page. This is particularly important if you're opting to nearshore. As noted by Future Processing, if it makes more sense to produce goods in a country that's nearby, but workers there speak a foreign language, that's bound to create problems. It's important to be mindful of this before it manifests itself by seeking potential solutions, be they through translation software, video conferencing tools or other workarounds. 

3. Let your goals determine the appropriate host country
Maybe you're not sure which nation will be your nearshoring destination. That country should be determined by what your goals or objectives are. For example, if you're looking to hire qualified workers and your industry is IT, Mexico is ideal, according to Forbes. However, if your business is engineering, the talent pool is deeper in several South American countries, such as Chile, Brazil and Argentina.

With the proper vision, preparation and planning, nearshoring or reshoring can help to bolster your supply chain and set you up for success moving forward.