Inbound Logistics | May 2022


Reshoring Now: Boom or Bust? Sometimes, the numbers don’t tell the whole story. That’s the case with the 2021 Reshoring Index from global consulting firm Kearney. Released each year, the Reshoring Index tracks trends in manufacturing returning to the United States from the 14 Asian typical low-cost countries (LCCs) and regions where sourcing, production, and assembly have been offshored. Kearney’s 2021 Reshoring Index found that US companies were relying even more heavily on manufacturing operations in LCCs: American imports of manufactured goods from the 14 LCCs totaled 14.5% of US domestic gross manufacturing output, up from 12.95% in 2020, resulting in a negative 2021 Reshoring Index of -154. However, Kearney analysts see strong indications that attitudes and strategies about reshoring and nearshoring are changing. Thanks to the pandemic, trade wars and tariffs, and ongoing resulting supply chain disruptions, American companies are getting more serious about adopting expanded versions of reshoring, according to the Index. CEOs and manufacturing executives of American companies report a positive and growing sentiment for reshoring compared with last year, despite the continuing drop in the Reshoring Index. And, companies are seeking to invest in manufacturing assets in the United States and in Mexico, hoping to eventually build a manufacturing ecosystem here that could rival what exists in China. The report also points to an evolving definition of reshoring, incorporating and leveraging models where, for example, components and materials supplies are nearshored and final automated assembly

Sustainability has long been a buzzword in supply chain and logistics—and the challenge of how to truly determine if sustainability efforts are making an impact remains a key consideration. A new survey confirms that supply chain and logistics executives are indeed struggling to measure their sustainability efforts effectively. Released by Google Cloud and commissioned by The Harris Poll, the study surveyed some 1,500 C-level and VP respondents across 11 industries, including supply chain and logistics. The inability to reliably measure what works and what doesn’t hampers sustainability efforts aimed at curbing emissions, reducing carbon footprints, and encouraging more ethical and sustainable business practices. The research also shows a troubling gap between how well companies think they’re doing, and how accurately they’re able to measure it. Here’s how responses from supply chain and logistics executives stack up: • Only 10% of respondents are capturing the impact of programs that have been put in place (compared to 19% global average). • Only 12% are acting on measurement findings to make their program stronger (compared to 17% global average). • 65% of organizations have overstated their sustainability efforts (compared to 58% globally). • 51% say their companies are making an effort to offset carbon footprint (compared to 45% global average). • 49% conduct research into business partners to actively support green vendors (compared to 44% globally).

and testing is done in the United States. Key findings from the survey include:

• 92% of executives express positive sentiments toward reshoring. • 79% of executives who have manufacturing operations in China have already moved part of their operations to the United States or plan to do so in the next three years. • Starting in Q4 2020, U.S. reliance on China diminished as the other Asian LCCs started to recover from the pandemic and American companies began to again diversify away from China as they had begun to do before the pandemic.

Source: Kearney analysis

24 Inbound Logistics • May 2022

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