The Global Phenomenon of Reshoring

Reshoring is on the rise globally. The US may have started the trend, but it’s catching on in the UK, among other countries. This recent analysis from Manufacturing Digital has a number of useful anecdotes and survey data that suggest that the interest in building localized supply chains will only increase in the coming years.

According to the story, “almost a third of senior British manufacturing decision-makers who currently use overseas suppliers say their business plans over the next five years include sourcing more components from the UK.” The reasons for the shift are almost identical to the ones we hear in the US. To wit, “among the widely cited reasons were rising costs overseas, simpler logistics and the UK becoming a more attractive production destination.”

The other major reason we see in the US for bringing production back onshore is concern over IP protection. This is less of a concern for foreign-headquartered manufacturers who do not have the same exposure to China from a global sourcing perspective as many domestic companies. Compared to the US, a much greater percentage of the low cost sourcing activity within the EU and UK has centered on Eastern Europe.

The strength of localized supply chains with certain UK brands and markets will no doubt continue as well. After all, we just can’t see something as distinctly English as a Barbour jacket or a Mini being produced anywhere else. Yet perhaps the biggest change in both the apparel and manufacturing sector will come from a resurgence of lower-tier supply sources coming from onshore. But the rhetorical consumer branding question remains to be answered, namely, will that make these brands more “English”?

Voices (3)

  1. Harry Moser:

    All of the factors listed and many more are included in total cost. One key for convincing companies to manufacture locally is to help them decide based on total cost instead of purchase price. The not-for-profit Reshoring Initiative provides a free online Total Cost of Ownership (TCO) software that helps companies calculate the real offshoring impact on their P&L. In many cases companies will find that, although the production cost is lower offshore, the total cost is higher.
    The Initiative tracks all U.S. reported and some private cases of reshoring and concludes that about 80,000 manufacturing jobs have been reshored since Jan. 1, 2010. If companies consistently evaluate all of the costs and risks, about 500,000 more manufacturing jobs would come back today. Current research shows many companies can reshore about 25% of what they have offshored and improve their profitability.
    The same logic works in every country. Readers can help bring back jobs and increase profitability by asking their companies to reevaluate offshoring decisions. Suppliers can use the TCO software to convince their customers to reshore.
    You can reach me at

  2. Navdeep Sidhu:

    The more global your supply chain is the more logistics you have to keep track of. More vendors, more suppliers, different laws and regulations, more emergency situations and so forth. Reshoring cuts way back on a lot of those logistics.

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