What is ‘Friendshoring’ and Why Should You Care?
Anna McGovern, CPIM, CSCP
Author | Supply Chain & Procurement Executive | Speaker | Advisor | Helping Manufacturing Leaders Build Resilient, High-Performance Supply Chains
Are we at the end of globalization?
My friend, Sarah Scudder - ITAM Nerd , recently introduced #friendshoring to our #whattheduck supply chain happy hour group. We discussed what it is and the pros and cons of such an approach.
Over the past two decades, businesses have relied on offshoring as a cost-effective answer to manufacturing; however, recent events such as Covid-19 and Russian invasion of Ukraine showed how fragile these global supply chains were. As an alternative approach to counter widespread disruption risks posed by international markets, US officials are now proposing ‘friendshoring’ - an idea that emphasizes building relationships with companies in allies/countries more reliable than faraway countries in anticipation of uncertain times ahead. This new concept puts into question our current reliance on global economies while fostering stronger local collaboration for better business continuity outcomes.
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In the wake of a global pandemic, businesses are opting for reshoring and nearshoring to ensure reliable supply chains. Many companies who previously relied on cheap labor abroad have now shifted production back home due to tariffs and disruptions in their sourcing from China; however, the Biden administration notes that it is not always feasible or beneficial for America alone to make every product they need nor do so without support from allies. It will take an intentional effort with our friends around the world if we want resilient collective supply chains moving forward. Supply Chain professionals are leveraging personal relationships to uncover friendshoring opportunities, boosting the efficiency and optimization of supply chain networks.
Embracing the concept of ‘friendshoring’ can be a powerful way to direct manufacturing, sourcing and raw materials within countries that share similar values. By creating links with trusted allies, both nations benefit from secure market access and an enhanced protection for their economies as well as those who form part of established trading partnerships.
If you need help optimizing your sourcing strategy and ensuring supply security, check us out at?Pondview Consulting, LLC.
Supply Chain, ERP, logistics and operations expert producing innovative supply chain solutions
2 年Anna, This topic is and will be front and center for a large number of USA-based manufacturing enterprises. Keep up the great supply chain dialogue!
Founder and CEO | Data Analytics | Finance | Supply Chain | Procurement | Staff Augmentation | ex PwC
2 年Very applicable to the relationship we are building through Inti Consulting Services! Long lasting relationships trump any short term transaction.
Global Supply Chain Transformation
2 年interesting thoughts - and while we are on the subject - something very important that seems to have stayed under the radar of many supply chain experts - and that is the new German Supply Chain Due Diligence Act. This has many indirect implications. Suggest a little digging might be of interest.
Too good to be on the sidelines - passionate about helping people help themselves - born to make a differenceAvailable for work now - WGL2 (What good Looks Like) - Deep research on EV Supply Chains & Indonesia's role..
2 年Spot on Anna, thanks for sharing
Modern IT Asset Management (ITAM). Unlock profitability by delivering data accuracy, automation, and intelligence across your entire technology ecosystem.
2 年Love to see our happy hour crew representing Anna!! Friendshoring allows buyers to get last minute, hard to find supply within days vs. weeks or months. Important risk mitigation strategy to have in place in case your main/core supplier can't deliver.