For decades, companies have been ‘offshoring’ their production to countries such as China and India. In recent years more and more reshoring has been looked at, the COVID-19 virus has only accelerated this further. Offshoring is currently making way for reshoring: retrieving or maintaining production in Europe.
Reshoring offers financial insight, security of supply, it makes entrepreneurs more flexible and ensures clear, direct communication between the company and its partner. In addition to the benefits for entrepreneurs and companies, reshoring can offer regional opportunities for the economy and employment.
Reshoring in Europe
The US was ahead of us, but now reshoring is becoming part of an ongoing process within Europe as well. More and more Western European countries are taking their production back from low-wage countries, other companies are consciously choosing to keep their production in the Netherlands and Europe and many are thinking about this.
Good for people and the environment
Entrepreneurs are increasingly opting for sustainability and we Europeans take people’s rights very seriously, something that has been a problem in Asian countries for a long time. By 2020, companies can no longer afford to produce products under very poor working conditions.
Opting for reshoring can even contribute to sustainable and social business operations. The large quantities of containers that find their way from Asia to European countries or air transport cause enormous greenhouse gas emissions. This can be demonstrably reduced by opting for reshoring.
Choice of entrepreneurs
Now that labour costs in Asian countries are rising and disappointment about the quality delivered is becoming more and more common, with the result that the high transport costs are no longer worth it, entrepreneurs are looking for a reliable solution.
The choice of entrepreneurs contains a number of important reasons for choosing reshoring:
When opting for reshoring, entrepreneurs have insight into the costs incurred and it also prevents hidden costs. Wages in low-wage countries are getting higher, but transport and failure costs are also often higher.
Production processes are changing. For example, new requirements are set by, among other things, rapid innovations, making cooperation with Dutch suppliers necessary. The market is also changing, demand for tailor-made products is growing and customers expect short delivery times.
In addition, entrepreneurs from the Netherlands and his or her partner in Asian countries may have to deal with difficult communication, due to language barriers or cultural differences, but renewed legislation and regulations can also cause problems for the production process.
Reshoring future perspective
The COVID-19 virus makes it painfully clear how dependent we are on the unsustainable global supply chain. In addition, companies will increasingly see that they want to have important production processes close by. Flexible automation using collaborative robots makes the threshold for companies to start atomizing their processes that can compete with lower wage countries ever lower.