US manufacturers plan to increase reshoring to get better value and more security

As a result of challenging economic conditions, US manufacturers are streamlining their operations and costs (47%), incorporating AI into supply chains (38%), and focusing on protecting margins (36%). A further 69% of manufacturers have started to reshore their supply chains - a process in which companies move production from overseas to the countries where goods are sold.

In reality, a whopping 94% of manufacturers engaged in the reshoring process report successful outcomes. A significant quarter of them (23%) are enjoying enhanced value and heightened security. These shifts are attributed to overseas supplier price hikes (27%) and advancements in technology (22%). Additionally, 93% of manufacturers are planning to increase the pace of reshoring within their supply chains over the next two years.

Specialist talent and costs remain key concerns for business leaders as they embark upon reshoring projects, especially as the sector faces subdued growth^[1]. When asked about the biggest barriers to reshoring, business leaders stated it was concerns about rising prices (36%), followed by concerns about the risks of changing suppliers (34%), and rising operational costs (33%).  Manufacturers also said their reshoring plans will mean they will need more specialist staff in the US to help with the reshoring process (58%).

Propelled by the opportunity for a more secure supply chain and lower costs, business leaders are also encouraged by technological advancements, saying AI driven tracking platforms (34%), data analytics for risk management (33%), and Generative AI in supply chain management (32%) are enabling the move towards reshoring. Business leaders have also been encouraged by automation as they expect a shorter payback time between making an investment in automation and seeing a return on that investment - 88% of manufacturers say they expect a fast return on investment due to automation in the supply chain.

As manufacturers start reshoring they expect customers to reap the rewards, with the ability to have the products they want faster (47%), cheaper products as business costs come down (45%), and higher quality products (44%). Producing onshore is also expected to have wider ramifications for how the economy operates at large, as multiple different industries benefit from having production onshore.

Don Holm, Global Vice President, Value Consulting, Medius, says: “In the face of a tougher business landscape, US manufacturers are navigating a maze of challenges, from interest rate hikes to supply chain complexities and consumer demand shifts.

Despite these challenges, a remarkable 69% of manufacturers are reshoring their operations, spurred on by tech advancements and the opportunity of having greater security within their supply chains, without the hefty price tag which used to be associated with onshore production. And it's just the beginning, as manufacturers embrace AI and automation, with the promise of not just surviving but thriving in the shifting economic tides.”

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