90% of companies see nearshoring as key way of safeguarding supply chains

90% of companies see nearshoring as key way of safeguarding supply chains

• Nearshoring and reshoring remain enduring trends for participants of the latest INVERTO Nearshoring Study.
• Eastern Europe is viewed as a key region for nearshoring activities.
• Geopolitical tensions now a major consideration for companies restructuring their supply chains.

LONDON– The results of the INVERTO Nearshoring Study reveal a resounding consensus among participants, over 90 percent of who see nearshoring and reshoring as key ways of safeguarding their supply chains.

The study conducted by supply chain experts INVERTO, part of Boston Consulting Group, show that companies see the relocation of orders to neighboring countries as the most suitable restructuring option to increase efficiency, improve flexibility, and shorten delivery times.

Two thirds of the companies surveyed plan to restructure their supply chains in the next 5 years. Notably, 67% of industrial companies intend to increase regionalization, with plans to relocate procurement capacities to more politically stable areas. 42% of all companies surveyed rate regionalization as the primary approach to restructuring their supply chain.

Eastern Europe, a major nearshoring hub

Eastern European countries are seen as the most common option. 57% of the companies surveyed already source goods from the region, while 32% plan to relocate their activities to Eastern Europe in the coming years. In contrast, only 9% of companies plan to relocate to Western Europe.

91% of the study participants state that they take geopolitical tensions into account in their decision-making – and only 11% were optimistic that politics alone can solve global tensions.

While geopolitical tensions remain a major motivation for nearshoring, production costs were also rated as a strong or very strong influence for 82% of companies restructuring their supply chains.

Reconsidering procurement strategy and geographical focus

« Nearshoring can unlock potential in three dimensions – increasing resilience, accelerating lead times, and making progress in sustainability, » explains Sushank Agarwal, Managing Director at INVERTO.

« In order to capture the full spectrum of opportunities, companies should rethink their sourcing strategy and expand their geographical scope when evaluating nearshoring potential, » advises Agarwal.

To do this, companies should first create transparency throughout their entire supply chain. This foundational step enables a comprehensive « total cost of ownership » analysis, identifying primary products suitable for nearshoring and friendshoring, as well as determining the most viable supply regions.