Reshoring and Nearshoring: Challenges and Opportunities

BY: REBEKAH MCCARTER

The latest Capterra Supplier Relationship Survey underscores the complexity of today’s global supply chains. This tells us it isn’t as simple as identifying a solution. While 92% of small and mid-size businesses identify nearshoring as a primary strategy for success, the process to do so can be complicated.

What the data tells us:

• 88% of survey respondents have plans to switch some suppliers, while 45% plan to switch ALL of them.
• North America is the clear destination winner as 74% of respondents say North America is the goal.
• 64% indicate an ongoing interest in joining or creating a group purchasing organization or group to help reduce procurement costs (something local shoring could make more possible).

In reality:

• New vendor onboarding takes time and establishing relationships is critical. Trying to verify, validate and onboard new suppliers individually can be complicated. Variables include capacity, capability, price, quality, delivery, legal and regulatory requirements, cybersecurity compliance, etc.
• Expertise producing or reverse engineering components that have been offshored for decades can be challenging. Some components, like semiconductors, require a reinvestment in machinery and capabilities and a renewed focus on training to establish a pipeline of qualified employees.
• Existing supply chain management processes may need to change to address ongoing challenges.

How MEP can help supply chain professionals:

• Refresh your staff with Practical Approach to Supply Chain Management. This two-day course covers supply and demand, and identifies the best approaches to planning, sourcing, make vs. buy, delivering and returning materials.
• Join CONNEX Michigan, a free, online supplier database of verified domestic manufacturers.
• Help prequalify potential vendors to ensure capabilities, financial viability, and capacity.

How MEP can help new and existing suppliers:

• Evaluate and recommend technology deployment to address employee shortages.
• Conduct surveillance audits to independently validate quality capabilities.
• Perform a waste walk to identify operational improvements to increase capacity, improve margins and enhance overall efficiency.

For more information on how The Center can help your company build a stronger, more robust supply chain, contact us at inquiry@the-center.org.
 

MEET OUR EXPERT: Rebekah McCarter, Lead Supplier Scout
Having spent more than 20 years with the Michigan Manufacturing Technology Center, Rebekah views her fundamental responsibility as head cheerleader and advocate on behalf of Michigan’s manufacturing community. Officially, Rebekah is the Lead Supplier Scout for Michigan, part of a national program that effectively identifies domestic suppliers that meet the specifications of OEMs and other U.S. manufacturers, with a special focus on connecting Michigan companies with other Michigan companies. If you are looking to mitigate risk in your supply chain, transition to more local sourcing of raw materials or augment your minority suppliers, The Center can help.

 

Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at www.the-center.org.