Keeping inventory offshore exposes your business to various risks that can disrupt your supply chain, including geopolitical instability, natural disasters, transportation slow downs, and even port closures – all of which can result in significant delays in getting products to customers.
When inventory is held overseas, it can also be harder to manage quality control, which can lead to customer complaints and product recalls.
In addition, longer delivery times and currency fluctuations can increase inventory carry costs, tie up working capital, and reduce your profit margins. And intellectual property risks, such as counterfeiting, piracy, and theft, can result in lost revenue, legal fees, and damage to your company's reputation.
So why isn't everyone rushing to bring their inventory back home?
"Reshoring" or "onshoring" means bringing inventory or production back to a domestic market from an overseas location; it can involve establishing new production facilities in your home market, changing your supply chain partners, and even changing your product design so you can produce goods domestically instead of offshore.
For most companies, a decision to reshore inventory will have many downstream ramifications and should not be made lightly. Yet there are good reasons to give it serious thought.
Reshoring can reduce your company's dependence on offshore suppliers, for example, which can minimize supply chain disruptions and significantly reduce transportation costs. And moving operations closer to home can make it easier to maintain consistent production standards. Investing in domestic manufacturing can also create new jobs that can lead to positive economic benefits for local communities.
Over the past few years, there has been a growing trend among aviation companies to move their supply chains closer to their manufacturing and assembly plants.
By reshoring inventory, they can minimize costs and ensure that parts and products meet consistent production standards and regulatory requirements. This level of control is essential in an industry where safety and reliability are paramount. Other aviation supply chain problems to be avoided include:
According to Supply Chain Quarterly, a resilient supply chain combines high capacity and a diverse supplier network with highly accurate forecasting, "system thinking," and a culture of continuous improvement.
A decision to reshore inventory and production could be just the motivation you need to fundamentally change your logistics operations to become more resilient and ensure future success.
To determine if you’re ready, ask yourself the following questions and then call us to chat further!
At Cura Group, we specialize in helping companies build, operate, and manage resilient point-of-use distribution centers to bring essential parts and products close to where they're needed.
Talk to us if you're considering reshoring overseas inventory, or just looking for a smarter way to manage your domestic warehousing and distribution facilities here at home.
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