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What is reshoring?

Reshoring is the process by which companies bring back production or service activities that were previously located abroad to their own country. It is often seen as the opposite of offshoring, where companies move production or service activities to other countries.

Why do companies choose reshoring?

Companies often choose reshoring because it can offer benefits such as better quality of products and services, better control over production processes, shorter lead times, lower CO2 emissions, and lower costs. Companies have also become more aware of the risks associated with moving activities abroad, such as political instability, changes in regulations, and transportation costs.

The COVID-19 pandemic has contributed to the acceleration of the reshoring trend. The disruption of global supply chains, increasing trade barriers, and dependence on certain countries for essential products have raised alarms for many companies. Companies have learned that they are vulnerable to unforeseen circumstances, and many of them are now considering bringing production or service activities back to their own country.

What factors play a role in the decision to reshore?

Factors that play a role in the decision to reshore include costs, quality of products and services, control over production processes, availability of specialized knowledge and equipment, sustainability aspects, and political and economic stability of the country.

What are the challenges associated with reshoring?

There are several challenges associated with reshoring, such as higher labor costs, lack of specialized knowledge and equipment, higher energy costs, and the need to establish new supply chains. Companies must also consider the time and costs involved in moving activities back to their own country.

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