![]() ![]() ![]() Near-shoring is bringing production back to friendly countries not far from the United States so that production does not have long transportation times or suffer from security or safety problems. On-shoring refers to bringing production back to the United States where it is safe from foreign adversaries and subject to domestic health and safety provisions. The disruptions caused by these alterations have led to calls for a greater domestic manufacturing capability through on-shoring or near-shoring. Concerns unleashed by the pandemic and dependence on foreign manufacturers combined to increase risks and raise worries regarding just-in-time practices. 6 That production and distribution system worked as planned until difficulties in the global supply chain disrupted those practices and created problems in terms of supplies, safety, and security. 5 While American manufacturing’s share of overall output remained constant, its labor share declined as firms automated production lines and relied upon emerging technologies. 4Īt the same time, much of the country’s manufacturing capacity shifted abroad as corporate leaders sought low labor and energy cost areas where products could be made inexpensively. Rather, they kept their stocks low and refreshed on an “as needed” basis. That approach saved money because firms did not need to build extended storage facilities or keep a full inventory. Years ago, many companies adopted a “just-in-time” approach to supplies in which they stocked only what they immediately needed and trusted supply chains to deliver other items quickly. Boosting Domestic Capabilities Through On-Shoring and Near-Shoring Making progress in these areas would go a long way towards easing current global supply chain disruptions and putting global trade back on a firmer footing.
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December 2022
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