The Reshoring of Global Supply Chains
Recently, international trade has suffered major disruptions and economic problems so that?many companies are beginning to rethink their supply chain models.?
Global events have forced businesses to reconfigure their overall supply chain process such as the following and many more:?
Reshoring means bringing?production closer to consumers, and, in doing so, reduces the potential for disruption, with shorter delivery terms and better service to end consumers. Localised supply chains will also provide better visibility for the monitoring of supply chain Environmental, Social and Governance (ESG) credentials, while cutting down on the carbon emissions associated with shipping, an industry responsible for 2.5% of the world’s total CO2 emissions.
While many companies are redoubling their efforts to build more resilient supply chains, we are also beginning to witness increased government support for domestic manufacturing. In mid-July, the UK announced its first ever Critical Minerals Strategy in a bid to reduce UK reliance on minerals and fossil fuels sourced far afield. The US government has also outlined plans to invest in domestic manufacturing, in a bid to build more robust supply chains and reduce reliance on China. This is amid ongoing US-China trade tensions.
The reshoring?of supply chains is a significantly expensive and complex solution and many businesses are expected to opt for alternative solutions before contemplating such a change. Therefore, in the short-term, storing more inventory may help to avoid the risks and downfalls of the ‘just-in-time’ model.
In the long-term, diversification will be one of the main solutions for risk reduction; particularly the expansion of existing supplier networks and manufacturing or production facilities.?
To read more about reshoring and what we expect to see happening within global trade, click?here.
Inquisitive Mind |AKFI Executive Director |Cornell U Visiting Lecturer & Instructor |Leading AI and Sustainability Transformation |ISCEA Board of Advisors
1 年Michael Baxter - The ESG Show, thank you! AKFI Industry Consortium analyzed and published a white paper on the sustainability of supply chains, We identified the following challenges - Supplier management - Getting suppliers, especially small ones, to commit to sustainable practices can be challenging—lack of standards, resources, etc. - Cost - Sustainable materials, production processes, certifications etc. can be more expensive. Hard to justify for some companies. - Technology limitations - Lack of systems, data integration, and analytics capabilities to properly monitor sustainability KPIs across supply chains. - Conflicting priorities - Focus is often on cost reduction, speed, and efficiency rather than sustainability. Seen as a secondary concern. - Regulation and policy - Lack of common standards or enforcement mechanisms globally. It is hard for companies to navigate disparate requirements.
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2 年Reshoring is a new concept for me that I learned from this article. It does make a lot of sense!
Client & Distribution Comms Director at the UK's No.1 Fastest-Growing Company and 3rd in Europe - Financial Times FT1000
2 年You can read more on the OCI website - www.oci-group.co.uk/insight
CEO at OCI, the UK's No. 1 Fastest-Growing Company and 3rd in Europe - Financial Times Top 1000 Companies - 2022
2 年Great article exploring how reshoring may help organisations and addressing if change is here to stay...?