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30% of Manufacturing Companies Plan to Increase Localization Within 6 Months

30% of Manufacturing Companies Plan to Increase Localization Within 6 Months [Report]

Ever since the ongoing COVID-19 pandemic began to shut down factories and disrupt supply chain operations throughout North America and Europe beginning in March of this year, reshoring has been one of the hottest topics in manufacturing.

While there was already some traction on the reshoring front before COVID-19 arrived, the pandemic certainly accelerated it. The prospect of having more control over supply chains became rapidly appealing once pandemic-led disruptions developed at an unprecedented scale throughout the spring, leading industrial suppliers looking for ways to future-ready their operations.

In March, Thomas’ Industrial Survey found that 54% of respondents said they were likely to bring manufacturing and sourcing back to North America in light of recent disruptions. That figure grew to 64% in their April survey and 69% in June.

Many manufacturers indicate they plan to pursue reshoring and localization of their supply chains, but few have commented on how soon that will be.

Global market research company Euromonitor International addressed this topic in the results of its new “Voice of the Industry” survey, which found that about 30% of manufacturing respondents plan to increase production localization efforts within the next 6 months as a means of becoming better prepared against future risks.

Euromonitor provided the localization statistic as part of five trends the research firm sees driving the manufacturing industry by 2025:

  1. Transition towards demand-driven supply chains
  2. Embracing digital solutions and automation
  3. Greater flexibility of supply chains
  4. Repurposing manufacturing capabilities
  5. Greater collaboration

Certainly, reshoring is much easier said than done. As Thomas reported on October 22, it would cost Apple at least $4 billion to reshore production of its iPhones to the U.S., and that cost would likely be passed on to its customers.

Naturally, the larger the manufacturer, the longer and more expensive any reshoring process will be. Time will tell if the pandemic actually accelerates manufacturers’ reshoring efforts more than just their interest in it.

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Daisie Hobson

Daisie Hobson is a Director at the Reshoring Institute and an engineer with many years of experience in manufacturing and project management.

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