We asked the nation’s blue-collar workers what matters most to them. Join our webinar on May 19th to find out what they said! Click here to read more.

close

Questions? 1-877-894-7778

The benefits of "boomerang businesses"

4/26/2022

The benefits of "boomerang businesses"

The concept of boomerang employees became widely discussed following the pandemic, as many companies saw former staff members coming back to rejoin the workforce. Another growing trend that came about after global crises — such as the war in Ukraine — is that businesses are "reshoring" their supply chains, known as "boomerang businesses." This is primarily because of the impediments incurred by a global crisis, causing significant disruption to international supply chains. There are various reasons for companies to consider partnering with boomerang businesses across the U.S. in many industries, but what are they and how could they improve your company's supply chain?

Offshoring, nearshoring or reshoring?

Many U.S. businesses began offshoring elements of their supply chain in the 1990s to reduce operation costs. This involved moving supply and manufacturing to international facilities — particularly in Asia — improving bottom-line figures, even with the higher transportation costs. This trend of globalization continued to expand for decades.

Conversely, as defined by SupplyChainDive, reshoring is "the process of bringing manufacturing and part or all of the supply chain back to the home country from a foreign country." Somewhere in between is the concept of nearshoring. Nearshoring refers to moving operations to a location near your home country. In the case of U.S. businesses, this usually refers to Mexico.

Reshoring or nearshoring can both be considered as forms of boomerang business practices, as either involves bringing operations back to a location closer to home.

The challenge of globalized supply chains in the 21st century

According to insights from Deloitte, "80% of industries experienced supply chain disruptions because of the pandemic" in 2020. The volume of complications to a globalized supply chain can prompt organizations to reconsider their partnerships with international operations, and rightly so. In many industries, customer expectations are shifting toward reliability and quality over affordability, as well as paying much more attention to environmental friendliness. Maintaining an offshore supply chain can potentially lead to increased expenditure and reduced client satisfaction.

Top reasons to reshore your supply chain with "boomerang businesses"

There are many good reasons to consider bringing some, if not all, aspects of your supply chain back to the U.S., but here is a list of some of the strongest arguments to explore these options.

Financial

The costs of international shipping and couriering are rising. This is partly linked to the prices of fuel and insurance, which are forecast to continue increasing. Additionally, factories and warehouses in formerly more affordable regions are beginning to inflate costs, making local alternatives more attractive.

Efficiency

As the consumer market expectations for swift, reliable production and provision have increased, supply chains can sometimes fall behind when relying on offshore operations. The lengthier and more complicated processes of international resourcing and shipping can be significantly reduced and simplified by reshoring aspects of the supply chain.

Environmental

By bringing supply chain operations back to more localized, domestic businesses, there will be a reduction in your company's carbon emissions. While this may not have a massive impact immediately, it will improve the public perception of the organization. As ethical and environmental matters become of greater concern to consumers, this makes sound strategic sense for any company.