The results of the INVERTO Nearshoring Study has revealed a resounding consensus among participants, over 90% of whom see nearshoring and reshoring as key ways of safeguarding their supply chains.
The study conducted by INVERTO, part of Boston Consulting Group, shows that companies see the relocation of orders to neighbouring 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 five years. Notably, 67% of industrial companies intend to increase regionalisation, with plans to relocate procurement capacities to more politically stable areas. Fourty-two percent of all companies surveyed rate regionalisation 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. Fifty-seven percent 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 nine percent of companies plan to relocate to Western Europe.
Ninety-one percent 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,” explained 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,” advised Sushank.
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.
Methodology
Around 95 companies, mainly from the DACH region, took part in the nearshoring study. More than half of the respondents came from the manufacturing industry. In addition, contact persons from the service, construction, process industry and trade sectors also took part.
Around 50% of respondents have an annual turnover of over €500m. The survey period was May to July 2023. Interested parties can download the study results here: https://www.inverto.com/en/publications/nearshoring-study-results-2023/
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