What exactly is onshoring? As the name suggests, it’s the act of sourcing and producing material from within a company’s domestic borders instead of looking globally. For many industries (e.g., automotive, aerospace engineering, plastics), onshore manufacturing is an opportunity to create jobs, lift the domestic economies, and embrace greener business practices by reducing greenhouse emissions.
Onshoring provides more than environmental and cost-saving measures in manufacturing, though. The opportunity to streamline supply chains is one of the more significant benefits of onshore sourcing and manifests itself in many ways, including:
1. Access to Higher-Quality Materials
When obtaining materials from the global market, ensuring quality standards can be more challenging because they vary depending on your sourcing location. Choosing to source closer to home can give you some peace of mind about the materials you’re receiving. Sourcing higher-quality materials is an ideal way to reduce manufacturing costs because it allows you to bring consistency and predictability to your supply chain.
2. Fewer Inventory Surpluses
With onshoring, companies don’t need to build stockpiles. According to studies in demand and consumer trends, you can improve cash flow by keeping less inventory onsite at any one time and making orders more flexible. On top of being more versatile and maintaining a more nimble cash flow, transportation loads and delivery times decrease, reducing greenhouse gas emissions and increasing savings.
3. Better, More Localised Customer Service
Hosting production and customer service in the same location means you can provide buyers with more personalised and efficient customer service. For a start, there’s less risk of a poor-quality item being delivered. But you’re also able to relate to customers and solve problems more quickly, an attribute that has become increasingly important to consumers.
4. Shorter Lead Times
What’s the most significant distinction between onshoring and offshoring? Time. You automatically streamline your supply chain when you cut out global shipping times, delays, and customs clearance. This advantage is especially prescient now, thanks to the perfect storm of COVID-19 and Brexit, with 41% of businesses in London and Southeast England experiencing manufacturing delays because of stock lead times.
Choosing onshoring can be one of the cost-saving measures in manufacturing that reduces lead time, enhances customer support, and boosts the quality of your overall product.