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Companies looking to solve various supply-chain problems by sourcing goods or raw materials closer to home are finding that nearshoring is easier to talk about than to implement, says The Wall Street Journal.
The strategy of shifting production from Asia to North America has accelerated in the wake of the COVID-19 pandemic and growing geo-political tensions. The approach has also brought new costs and logistics hurdles for supply chains that are adding a new twist to globalization.
Automotive-parts supplier Premium Guard started manufacturing in Mexico in 2020, helping it avoid many of the bottlenecks that hit international shipping. But the company has also had to develop new suppliers, and its factory struggles to compete with Chinese prices because the range of raw materials available in Mexico is limited and more expensive than in China.
Still, many companies say shorter transit times and other benefits offset the complications.
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