Onshoring

Extracted Attributes

• Purpose

  To strengthen supply chain resilience, improve quality control, align with local laws and market demands, reduce costs, mitigate risks, and enhance sustainability.

• Benefits

  Lower transportation expenses, reduced import/export requirements, increased quality control, faster response times, improved local business relationships, predictable pricing, easier compliance with domestic regulations, and enhanced intellectual property protection.

• Definition

  The practice of bringing business operations, particularly manufacturing, back to a company's home country.

• Key Drivers

  Supply chain shocks, volatile markets, the desire for local production, and strategic goals like re-industrialization.

• Historical Context

  Was the status quo until the 1980s, followed by a period of globalization and offshoring, with a recent return.

• Impact on Workforce

  Creating a 'New Collar Boom' and addressing the nation's skilled talent shortage.

• Relationship to Offshoring

  Often seen as the reversal of offshoring, which involves relocating business processes to another country.

Timeline

• Onshoring was the standard practice for most companies, keeping manufacturing operations within their home countries. (Source: Thomasnet)

  Before 1980s

• A period of increased offshoring occurred as companies moved production overseas to benefit from cheaper labor and material costs due to globalization. (Source: Thomasnet)

  Post-1980s

• A significant return to onshoring has been observed, driven by factors such as supply chain shocks, volatile markets, and the desire for greater resilience and control. (Source: Thomasnet, Forbes, Caplugs)

  Recent Years

• Onshoring was emphasized as a central theme for the 'Re-industrialization of America' within the AI Action Plan, a strategy to win the global AI Race. (Source: Related Document f2250dc0-a5de-43dc-ae4b-0e945f6a9af7)

  During Trump Administration (2017-2021)

• The Small Business Administration (SBA) updated its policies to allow loans for AI adoption, thereby supporting the onshoring trend. (Source: Related Document f2250dc0-a5de-43dc-ae4b-0e945f6a9af7)

  Recent Policy Update

Offshoring

Offshoring is the relocation of a business process from one country to another—typically an operational process, such as manufacturing, or supporting processes, such as accounting. Usually this refers to a company business, although state governments may also employ offshoring. More recently, technical and administrative services have been offshored. Offshoring neither implies nor precludes involving a different company to be responsible for a business process. Therefore, offshoring should not be confused with outsourcing which does imply one company relying on another. In practice, the concepts can be intertwined, i.e offshore outsourcing, and can be individually or jointly, partially or completely reversed, as described by terms such as reshoring, inshoring, and insourcing. In-house offshoring is when the offshored work is done by means of an internal (captive) delivery model. Imported services from subsidiaries or other closely related suppliers are included, whereas intermediate goods, such as partially completed cars or computers, may not be.

Web Search Results

• All About Onshoring - Thomasnet

  Onshoring is the process of relocating or sourcing a business’ production and manufacturing operations within the national borders of the same country as the company’s headquarters. Until the 1980s, onshoring was the status quo, with most companies keeping their manufacturing operations at home. During the years of globalization, many companies outsourced or moved their production overseas to benefit from cheaper labor and material costs. Recent years have seen a return to onshoring as a way to [...] In summary, onshoring is an attractive option for companies wanting to strengthen supply chain resilience, improve quality control, and align more closely with local laws, business practices, and market demands. While offshoring can offer lower labor costs and access to a diverse talent pool, it often comes with challenges such as cultural barriers, language differences, compliance issues, and high shipping and travel costs. Nearshoring, by contrast, enables companies to operate in a nearby [...] Different countries have varying safety, environmental, and labor standards. Onshoring makes it easier for businesses to ensure compliance, and meet domestic regulations and industry certifications. In addition, intellectual property (IP) theft is a serious concern in some offshore regions. Producing domestically often improves legal recourse and oversight of proprietary processes and designs. Easier to meet regulations – Production standards and regulations vary across the world. By

• Onshoring: Understanding the Concept, Industries that Benefit, and ...

  Onshoring and offshoring refer to different business strategies in terms of their location based on the home country where the original company is situated. It involves either establishing business operations within the company's home country, relocating local business operations within national borders, or outsourcing them to entities located there, ensuring that the outsourcing partner is within the national borders of the hiring company. In contrast, offshoring mainly involves the [...] , and the desire to gain the advantages of local production. In onshoring scenarios, manufacturing enterprises choose to establish or relocate their local production facilities within their home countries to gain proximity to consumers, reduce shipping costs, enhance quality control, and respond quickly to market demands. ### Services [...] outsourcing of business functions or manufacturing processes to third-party service providers or manufacturers located in foreign countries. It is also likely that the foreign operation is owned and managed by the original company.

• Onshoring For A More Sustainable And Secure Future - Forbes

  Offshoring, of course, is when companies move some of their manufacturing and service-related functions to other countries. For example, many U.S.-based companies maintain manufacturing facilities in Asia. Onshoring is the exact opposite and refers to relocating business operations back to the U.S. A closely related business model is nearshoring, when a company locates some of its work in a nearby country or one on the same continent. [...] After the supply chain shocks of the past three years, onshoring and nearshoring have risen to the top of corporate decision planning. The benefits of these strategies are many—lower transportation expenses, reduced import/export requirements and costs, increased quality control, faster response times and improved local business relationships—but the most pressing are risk mitigation and greater sustainability.

• 5 benefits of onshoring | Celonis

  Onshoring is when a company chooses domestic production or manufacturing operations, but isn’t moving from an offshore setup. With companies increasingly deciding to keep things close to home — 94% are planning direct investment in onshoring or nearshoring, according to Accenture — here are onshoring’s five most compelling benefits. ## 1. Lower risk [...] Offshoring, and even nearshoring or outsourcing, increases the number of variables in your operations and therefore invites risk. Covering a greater distance makes order fulfillment take longer and risk delays, failures or shipment losses — ditto reverse logistics. Onshoring is not only more reliable in terms of inventory management and fulfillment, but it can also be quicker to trace anything that goes astray and send out a replacement. [...] Another benefit of keeping operations more contained through onshoring is on the supply chain. The more centralized it is, the simpler supply chain management and continuous improvement become. Bottlenecks and delays are less likely — or are at least easier to spot and act on — when the supply chain doesn’t sprawl over international production, manufacturing and fulfillment centers.

• The Benefits of Onshoring: Building a Stronger Manufacturing Future

  As we are faced with one of the more volatile markets in recent memory, businesses are looking to protect themselves from rising costs and pricing fluctuations in any way they can. Onshoring eases each of these concerns by offering a more predictable pricing structure for materials and products. [...] When manufacturing occurs domestically, teams can monitor manufacturing more closely, through regular communication and can address quality issues before they escalate. When products are shipped, onshoring decreases the chances of shipping issues such as lost inventory, and if something were to happen to a shipped order, a replacement can typically be shipped faster than if it were coming from overseas. [...] Similar to issues with lead times, products traveling great distances can have bottlenecks in their supply chain. Onshoring and reshoring models simplify the supply chain and reduce the chances of experiencing shipping issues like lack of dockworkers, port congestion, waterway closures and extreme weather, to name a few. Regionalized manufacturing makes it easier to “keep tabs” on shipments to see where certain deficiencies may be and allows for improvement with each shipment being made.