According to the Reshoring Initiative, in 2021 reshoring and FDI added more than a quarter of a million jobs — up 46 percent from 2020. This isn’t surprising when one considers the supply chain bottlenecks that came about during the pandemic, with delivery times of products coming out of China going from one month to three or four months.

Of course, reshoring is not without its challenges, and companies considering such a move must tally all costs — not just labor costs — when choosing which supplies/products to manufacture domestically. There’s a lot to consider when moving operations out of China, e.g., employment contracts, retrieval of tooling, IP protection, etc. Dual sourcing is another option, i.e., sourcing half globally and half from a domestic supplier.

If the pandemic has taught companies anything, it’s that they need to be flexible in order to handle disruptive situations. Now added to the mix are sky-high inflation, rising conflicts worldwide, and a variety of trade barriers that companies need to learn to work with. Consequently, businesses will continue to rethink their supply chains. While companies embraced just-in-time (JIT) delivery over the last few decades, the idea of holding more inventory to deal with delays in the supply chain may be gaining traction.

Additionally, some businesses are turning to flexible manufacturing systems (FMS) to replace JIT. FMS allows manufacturers to quickly change the type and quantity of the product they’re manufacturing, so they can easily adapt to customer demands. With FMS the production line can stay the same for each new product. This process also increases automation, reducing production time and labor costs.