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Nearsourcing; All The Cool Kids Are Doing It…

Are you “Nearshoring?” Should you? For those of you new to the term, Wikipedia defines the term as:

…is “the transfer of business or IT processes to companies in a nearby country, often sharing a border with your own country”, where both parties expect to benefit from one or more of the following dimensions of proximity: geographic, temporal (time zone), cultural, social, linguistic, economic, political, or historical linkages. The service work that is being sourced may be a business process or software development.

Suffice it to say, nearshoring, for most Americans means either utilizing Canadian or Mexican manufacturing rather than Asian. But since Canada’s labor force is still relatively expensive (compared to Mexico’s) Mexico is the trending market.

Rita Gunther McGrath, associate business professor at Columbia Business School, thinks Mexico-based nearshoring can help the U.S. stage a manufacturing comeback. “The cost discrepancies that make the economics of outsourcing manufacturing to far flung places have changed dramatically.” She goes on to say:

As U.S. firms are becoming increasingly concerned about protecting their intellectual property, “nearshoring”—or bringing production closer to the point of use—becomes attractive as the risk of having important intellectual capital stolen is decreased. Having the capability to manufacture close to where customers are located can also increase customer responsiveness and decrease turnaround times, making the supply chain more predictable.

Does your company utilize nearshoring? With Zion Transport’s proximity to the border, we have contacts and contracts in place to help you move forward.

Give us a call today.

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