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The Benefits of Onshore Supply Chains

Benefits of onshore supply chains



by Staff Contributors

This is a guest blog from our partner Tealbook written by Nia Balbo, Senior Content Marketing Specialist

While companies have capitalized on globalization over the last few decades, the COVID-19 pandemic exposed a number of weaknesses within supply chain and procurement industries. According to the Institute for Supply Management, 75% of companies noticed disruptions in their supply chain network that were the direct result of the Coronavirus.

This has led many companies to consider diversifying their networks to include more onshore suppliers in order to reap the benefits of having a supply chain that’s a bit closer to home. 

Avoid the Instability of International Supply Chains

International markets typically boast lower production and shipping costs, but they also come with several drawbacks that companies may not experience with onshore suppliers. Factors such as longer supply chains and reliance on long-distance shipping and freight operations can create big problems when disruptions, such as the Coronavirus pandemic, come about. 

Additionally, trade wars between the United States and China have caused procurement leaders to take note of weaknesses within their supply chains and reconsider their reliance on outsourcing.

By discovering suppliers closer to home, your company has a better chance of avoiding longer lead times, shipping delays, and more in the event of a disruption, allowing for more resiliency over time. 

Greater Control Over Your Operations

In many cases, international markets have different environmental and ethical regulations when it comes to how suppliers operate and treat their employees. For example, The United States-Mexico-Canada Agreement (USMCA) requires local manufacturers to abide by certain rules that ultimately allow you to have greater control over the quality of products being used in your supply chain, as well as the environmental impact your network is having.

Due to these regulations, certain onshore suppliers are less likely to use a lesser quality product than you originally wanted or less ethical labor practices within their manufacturing processes. This gives you greater control over the details involved in your supply chain.

With many consumers placing more emphasis on buying from companies that work to improve the planet and lower their carbon footprint, having onshore suppliers that use sustainable practices can improve communication and with your consumers.

Potential Cost Savings in Labor Production

While China once dominated the global supply chain, partially due to its low labor costs, its economy is growing, and labor costs are rising even higher than those on our own shores. Depending on your products and needs, moving your network onshore and taking advantage of automation of labor-intensive practices can help balance out the cost of relocation. 

Overall, while relocating may be an investment at first, many procurement leaders agree that the benefits of having a supply chain closer to home are worth it. However, leaders recognize that, in order to find those new suppliers to allow for reshoring efforts, they need to have the right data. In fact, 199 out of 200 procurement leaders surveyed say their company has planned or implemented improvements to their supplier data and intelligence. 

Tealbook Helps Improve Supplier Data

If you’re considering reshoring your supply chain, having the right data can make all the difference. Tealbook uses machine learning and AI to help you reach millions of suppliers using the accurate, refreshed data you need in order to make the best decisions for your business. Contact us today to schedule an industry-specific demo.

Tealbook is a proud sponsor of Ivalua NOW 2021. If you’d like to chat more with their Ivalua implementing experts, register today:

Blog - Staff Contributors

Staff Contributors

Contributing writers from inside and outside Ivalua occasionally add items and information to this blog. We are a team who share an interest and curiosity about procurement and spend management.

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