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.
How should a business apply Nearshoring?
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.
What records support Nearshoring?
Confirm the actual production site, domestic content, route, capacity and transition cost. Some suppliers sell locally but manufacture elsewhere.
Nearshoring: what the sourcing record should show
| 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. |
What is a common Nearshoring 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.
