Are we at the end of globalization?
My friend, Sarah Scudder, 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.
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, contact us and schedule a discovery call with me: https://calendly.com/annamcgovern-pondviewconsulting/30-minute-discovery