Supply Chain Management

Onshoring and Nearshoring for Sustainable Supply Chains

Optimas | May 12, 2022

The Role Onshoring and Nearshoring Play in Sustainable Supply Chains

Understanding supply chains is vital in the quest to make manufacturing practices sustainable and commit to a net-zero carbon emissions target. While critical to distribution and manufacturing, supply chains can also be convoluted, complicated, and unreliable.

Unfortunately, there’s no easy answer to fixing all those issues or addressing supply chains’ struggles with sustainability. What may be more feasible, however, is attempting to reimagine how these workflows operate — and onshoring or nearshoring could be the answer.

 

How Do Onshoring and Nearshoring Impact Sustainability Measures?

Understanding these approaches’ effect on supply chain sustainability begins with understanding what they mean.

Onshoring occurs when all a project’s supplies come from a manufacturer’s home country. Onshoring increases the control companies have over parts, production schedules, and quality. It also allows companies to better cash in on the advantages of measuring sustainability on a local scale.

Nearshoring is similar to onshoring, except it casts a broader net by sourcing materials from neighbouring countries. It still lowers risk by cutting transport time and enabling closer cooperation between parties.

How does each of those translate to tangible, sustainable results? Here are a few byproducts:

 

1. Localised sourcing leads to reduced transportation.

Parts and materials don’t have to travel as far with onshoring or nearshoring. This reduces the need for multiple forms of transportation, especially those heavy carbon emitters like cargo planes and ships.

Considering that 17% of global greenhouse gas emissions stem from the transportation of goods, localised sourcing is one of the most critical steps we can take to achieve sustainable manufacturing.

 

2. Production becomes more flexible.

How often are products locked into a production schedule because of complex supply chains? The processes necessary for supplying and transporting product parts take a long time to plan and cause chaos if they falter.

According to research by McKinsey, 52% of companies predict shorter lead times post-pandemic. Shortening the supply chain will allow businesses more flexible practices and enable them to research, develop, and pivot if needed.

This more demand-centric model can respond to problems quicker, cut waste, and better serve consumers. These outcomes make it far more sensible to adopt sustainable manufacturing practices.

 

3. Supply chains become more sociable.

One of the major boons of onshoring and nearshoring is that both unite and focus supply chain partners on a common goal with closer communication and collaboration.

This means that the supply chain can become more transparent. Partnerships will be crucial to our ability to turn the manufacturing industry’s carbon emissions around and make the supply chain more sustainable as a whole.

 

Onshore and nearshore sourcing can unlock your vision of building a more sustainable supply chain. Optimas Solutions manufactures high-quality fasteners that would be valuable to OEMs trying to source sustainably.