In Praise of Proximity: the Pros of Reshoring and Nearshoring

Globalization is far from over. Still, companies are taking a hard look at their thinly spread, fragile supply chains. (“Making Cents” recently addressed supply chain matters on September 29.) Climate change, a pandemic, war, labor and trade tensions, and freight costs mean the C-suite is starting to favor reshoring (bringing a company’s operations back to its origins), and nearshoring (moving operations to a regional country) to shorten supply chains and beef up resilience. Last year, American companies were expected to reshore nearly 350,000 jobs, up from 260,000 in 2021.

CIO, CDO, and CTO = Your BFFs

If you’re on the struggle bus with your tech stack, at least you’re not solo. Nearly half of CFOs report they lack full visibility into spend data across their company, three in five CFOs consult multiple systems to find decision-relevant data, one third of CFOs lament that the processes are still very hands-on, 36% say no plans exist to recover data in the event of technology failure, and only 37% have a clearly-defined digital investment strategy. Data visibility, speed, automation, and resilience in your tech stack are critical and it’s often tricky to balance maintenance of what you have with the allure of new technologies.

Enlist the help of your Chief Information Officer, Chief Data Officer, and Chief Technology Officer to take inventory and help sort through the advice and options, including outsourcing some functions not in your enterprise wheelhouse. Before you spend that 13.7% above last year’s line-item, assess whether components of your tech stack could be optimized and integrated, where redundancies lie, and which vendors might fill the gaps.

Traditional FP&A matters will always deserve your attention. But find time on your agenda to geek out with any and all available tech stack gurus.

“We’re going to be seeing an increase of companies that used to have 600 or 700 people operating in Asia start to say, ‘You know what, I’m going to keep 100 or 200 in Asia, I’m gonna put another 100 or 200 in Mexico and maybe I’ll bring another 100 into the U.S.'”
–  Joshua Rubin, Vice President of Business Development, Javid Group