Checklist for Footprint Strategy

Checklist for Footprint Strategy

Over 60% of European and US companies expect to reshore some of their production activities from Asia back to Europe or the US over the next three years. That is the main conclusion from the ‘Global Reshoring & Footprint Strategy’ survey conducted by Buck Consultants International (BCI Global) and Supply Chain Media earlier this year. The reshoring trend is being further accelerated by the war in Ukraine and the current unity in Europe.

The research results clearly show that reshoring is a hot topic on the boardroom agenda within internationally active companies. The numerous supply chain disruptions in recent years, which have included COVID-19, material and component shortages and steep rate increases for ocean freight, have forced companies to reconsider their manufacturing footprint. 60% of the companies surveyed expect to move some of their Chinese/Asian production back to Europe or the US in the next three years. With fuel prices – and hence transportation costs – now skyrocketing, the ‘make in region, sell in region’ principle will become even more attractive.

Agility and business strategy

The key drivers for the value chain set-up are now agility and flexibility, at the expense of lowest-cost solutions. However, the process of reshoring to Europe is relatively slow because significant obstacles have to be overcome. Higher operating costs in Europe and the US due to lack of scale and the lack of a supplier base in these regions are the major hurdles. Many companies will shift away from country-by-country planning towards integrated global planning and supply chain organization in the next three years.

According to the survey, companies with a Product Leadership strategy are looking to reduce product configuration in order to create more volume flexibility. Businesses with a Cost Leadership and Operational Excellence strategy also want more agility, which makes the supply chain more cost-intensive. Meanwhile, a Customer Intimacy strategy means an even greater focus on faster deliveries than the other two strategies.

Download the checklist for Footprint Strategy

Supply chain consulting firm BCI and Supply Chain Movement have developed a checklist to help you assess whether your company has aligned the supply chain footprint for manufacturing and distribution with the business strategy.