For 20+ years, the low cost offshoring model worked for many OEMs. Whilst lower wage and raw material costs were the initial attraction, many of these top-line benefits have eroded; superseded by delivery on demand. In comparison to the off-shoring wave, it’s now evident that OEMs are no longer influenced on price and labour costs alone. Production skills, capacity, and the space to hold inventory are all equally important factors to consider when looking to de-risk supply chains.
Academics suggest that rightshoring – blending offshoring and reshoring – offers a balanced mix to achieve the optimum level of manufacturing efficiencies and productivity.
