There’s been a lot of debate recently about the potential impact of “near-shoring” or “re-shoring” manufacturing activity away from China and the Pacific Rim back to North and South America, along with what the ripple effects of such a shift might mean for the U.S. freight transportation industry.
Now there’s a new survey out that indicates this “near-shoring” shift may be gaining some significant steam.
According to the 4th annual Change in the Supply Chain survey, conducted by IDC Manufacturing Insights on behalf of United Parcel Service, interest in near-shoring has more than tripled in the high-tech industry since 2010.
Globally, IDC’s poll of 337 high-tech manufacturers in North America, Europe, Asia Pacific and Latin America found that 27% of high-tech logistics executives are embracing near-shoring as one strategy to improve their customer service.
When asked globally about the top drivers for near-shoring, 77% said they wanted to improve service levels by bringing production closer to demand and almost 55% cited improving control over quality and intellectual property, noted Ken Rankin, high-tech marketing director at UPS.
“Shifting market dynamics such as end consumer demand, emerging market growth and increased global competition are having significant implications for high-tech supply chains at every stage of the product lifecycle,” he said.
“It’s critical for high-tech companies to align their supply chain strategies to broader business goals and build competencies around each stage of the product lifecycle to achieve greater customer centricity while also improving operational efficiencies and driving growth in new markets,” Rankin (seen at right) explained.
Still, UPS noted in its poll that other high-tech executives, including 82% of those based in the U.S., plan to continue using their existing supply chain strategies, citing the cost benefits of low-cost manufacturing countries and the location of key suppliers as the top reasons for not considering a “near-shoring” shift.
Still, other findings from UPS’s supply chain survey seem to indicate some of the factors favoring “near-shoring” initiatives may be aligning:
So, is the “tipping point” nearing for “near-shoring” activity? Looking at the data right now, it still seems too early to nail down a definitive shift. But if the indicators are correct, the decision point on making such a shift may be a lot closer than many realize.