Part 1: Background and Key Factors To Consider in Developing
Manufacturing Strategy
Nearshoring and Global Supply Chains
Background
In the last half of the 20th century, multinational
corporations, both private and public, have branched out to
far-flung locations hoping to develop largely untapped markets and
reap the benefit of lower costs and the plethora of government
subsidies and tax incentives. For several decades, low-cost country
(LCC) manufacturing strategies proved to be crucial to staying
competitive.
Today, the honeymoon is over, and the enthusiasm for many
faraway low-cost country locations appears to be waning. Markets
are saturated due to new competitors, costs have risen, and
incentives have regionalized to less favorable rural regions. In
addition, the Trump-imposed tariffs that Biden largely held in
place, the COVID-19 pandemic and the geopolitical frictions have
wreaked havoc on supply chains and have exposed the U.S. dependency
on supplies,
