For improving ROI and expanding the business footprint, the basic thought process revolves around reducing manufacturing costs and enhancing production efficiency, which is insufficient in current circumstances. Businesses need to reconsider their logistics segment in this era of uncertainty, where the U.S.-China trade war, COVID-19 pandemic, and Russia-Ukraine war have partially and, in some cases, completely devastated the existing global supply chains. In addition, a brand’s reputation is at stake if a delay is observed in the supply of raw materials and final products usually, which is an indicator of an inefficient supply chain. Rather than depending upon sole manufacturers & suppliers established overseas, an enterprise should eye upon more diversified or local supply chain solutions to tackle global supply chain disruption. Indeed, reshoring or bringing operations and manufacturing back to their respective native countries help businesses enhance their supply chain connectivity. Besides reinforcing, other compelling reasons behind localizing the supply chain are elucidated below: –
Logistics is cost-intensive, especially for a globally operating business. In 2021, the US business logistics costs (USBLC) touched $1.85 trillion. Hence, ineffective supply chain management can further augment the financial burden on businesses.