In Episode 112 Leadership Minute, I explore how companies and governments are jumping on the friend-shoring bandwagon.
Highlights
00:21 — Offshoring involves moving operations to countries with low labor costs or proximity to critical raw materials. The benefits of offshoring have decreased over time and there’s a higher risk to customer service.
00:52 — Technology innovation has reduced the favorable increment from conducting business in low labor cost areas. Reshoring or nearshoring involves moving back to the original country or to a nearby country.
01:24 — There have been recent discussions about friend-shoring, a trade practice where supply chain networks focus on countries regarded as politically and economically safe or low risk. U.S. Secretary of the Treasury, Janet Yellen, mentioned it in a speech, favoring the friend-shoring of supply chains to trusted countries and trade partners.
02:08 — Other governments have leaned into friend-shoring, including Japan, the United States, and the United Kingdom.
02:46 — Companies in a variety of industries are jumping into friend-shoring as well, including Apple and JP Morgan. Healthcare and automotive are two industries that are also turning to friend-shoring.
03:19 — It’s important to consider where your customers are to understand what the logistics opportunities are. While there’s not a one-size-fits-all approach, it’s worth thinking about adding to the equation when evaluating global operations.
