Companies that do business across borders took the lessons learned during the COVID-19 global supply chain collapse and began shrinking the transnational networks connecting their economies.
“Nearshoring” and “reshoring” are supply chain strategies intended to bring suppliers and distributors closer together. The goal is to reduce the distance, costs and disruptions in shipping raw materials and finished goods.
COVID-19 highlighted many gaps in the modern global supply chain system. Today, geopolitical turmoil threatens to cause the same supply chain collapse caused by the global economic shutdown during the pandemic. In fact, The Wall Street Journal notes several political relations that could impact cross-border trade. One example is that drought has lowered the level of the Panama Canal, restricting traffic through it. Another is that conflict in the Middle East threatens exports of grain, oil and consumer goods.
Those with an advanced degree in business and global supply chain — like the online Bachelor of Science in Business Administration (B.S.B.A.) in Global Supply Chain Management program from Northern Kentucky University (NKU) — are equipped with the skills and foundational knowledge to utilize nearshoring and reshoring strategies and set the future of supply chain up for success.
What Are Nearshoring and Reshoring?
Nearshoring involves moving far-flung sourcing points to closer countries and regions. The intent is to reduce logistical challenges, shipping costs and lead times while leveraging foreign labor markets and other factors that affect production costs. For example, nearshoring strategies in 2023 promoted Mexico to the U.S.’s No. 1 trading partner and Canada to No. 2. Its long-held top trading partner, China, fell to third.
On the other hand, reshoring aims to repatriate raw material production and manufacturing to eliminate dependence on foreign partners, optimize quality controls, and capitalize on automation and advanced technologies. In fact, “American firms were expected to re-shore nearly 350,000 jobs in 2022, a 25% increase over 2021. If this trend continues, near-shoring and re-shoring could reduce Asia-originating exports to the U.S. by as much as … 40% by 2030,” according to Manufactured.
According to the Bank of England, international trade during the pandemic fell by 8.9%, driven largely by a nearly 350% rise in shipping costs. While factors like labor availability contributed to shipping strikes, the pandemic emphasized to businesses that supply chain operations were a key element to economic success and stability across the globe.
“In the search for greener pastures, most businesses are considering nearshoring to optimize operations and supply chains,” according to SupplyChainBrain.
Why Study Global Supply Chain Management Online in NKU’s Business Administration Program?
Many studies by business organizations have found that nearshoring and reshoring are past the consideration phase and well into adoption. Assembly Magazine‘s analysis of the research, for instance, found that “25 percent of global trade will relocate within three years … [and] distribution of global suppliers will fundamentally shift from being mostly global to mostly local by 2026.”
That tectonic realignment drives demand for global business professionals with expertise in developing and managing emerging supply chain strategies. Graduates of NKU’s online B.S.B.A. – Global Supply Chain Management program are prepared for roles in global marketing, logistics and management strategies for transnational enterprises.
The program’s Supply Chain Management course equips students with high-demand skills in this space. Among other topics, it explores logistics, purchasing, information systems, asset management and more. Additionally, the Global Strategic Sourcing course focuses on global supply chain strategy, commerce relationships and importing goods.
The program’s focus on the international perspective means graduates are suited for management roles in an increasingly uncertain global business environment. Paired with foundational business and supply chain knowledge, this international perspective means graduates can excel in many roles that utilize nearshoring and reshoring strategies. “After a decade of tracking reshoring and nearshoring activities, Kearney’s annual Reshoring Index can confidently declare what was once a strategic theory is today a market reality,” business consultancy Kearney explains.
Learn more about NKU’s online Bachelor of Science in Business Administration in Global Supply Chain Management program.
