Nearshoring moves or places supply with a country geographically closer to the buyer or end market. The aim is usually shorter transit, easier coordination or reduced exposure to distant routes.
The operating decision
Compare the nearby option with the current supply base using landed cost, replenishment time, minimum order quantity, capability and resilience. Geography alone does not make a supplier suitable.
Evidence to retain
Confirm the actual production site, domestic content, route, capacity and transition cost. Some suppliers sell locally but manufacture elsewhere.
| Area | What to record |
|---|---|
| Decision | Compare the nearby option with the current supply base using landed cost, replenishment time, minimum order quantity, capability and resilience. Geography alone does not make a supplier suitable. |
| Evidence | Confirm the actual production site, domestic content, route, capacity and transition cost. Some suppliers sell locally but manufacture elsewhere. |
| Watch point | Nearshoring may raise the unit price while reducing inventory, urgent freight and response time. The business case should show both sides of that tradeoff. |
A common sourcing mistake
Nearshoring may raise the unit price while reducing inventory, urgent freight and response time. The business case should show both sides of that tradeoff.
Related definitions: strategic sourcing, supplier prequalification, landed cost.
