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Nearshoring and managing global uncertainty

December 13, 2024 / 4 min read

In WardsAuto, Mark Barrott and Alejandro Rodriguez discuss how nearshoring decisions are typically made without 100% of the information and why suppliers should be aware of their propensity for risk as they chart their course forward.

Major global disruptions have exposed vulnerabilities in the automotive supply chain in recent years. From natural disasters and geopolitical conflicts to semiconductor shortages, many concerns have heightened industry uncertainty. Efforts to tame that uncertainty have sparked a rising trend toward regionalization and subsequent interest in nearshoring.

Nearshoring, the process of moving production and supply chains closer to their primary destination market, was once considered solely a cost-reduction tactic. Today, it’s increasingly appreciated for its ability to enhance supply chain resilience and mitigate risk. Still, it’s not without its own set of drawbacks. Like any strategy, suppliers must carefully balance the pros and cons.

When assessing nearshoring options, suppliers should carefully consider several key factors.

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