Study Predicts Near-Sourcing Will Increase

Lisa Anderson, president of LMA Consulting Group, conducted a proprietary research study to better understand outsourcing, near-sourcing, and insourcing trends for U. S.–based manufacturers. Pending further analysis, Anderson reports on a preliminary finding that shows that 70 percent of responding executives expect near-sourcing to increase within the next five years.

Survey data was collected from August–October of 2016 and the U. S. presidential election may have an impact on this trend toward near-sourcing.

"I've seen that manufacturers were already considering insourcing to the U.S. and near-sourcing options to Mexico and other closely located countries because of the Amazon effect--the need for rapid response to customer needs. Thus, the industry was already moving in that direction prior to the U.S. presidential election," said Anderson. "However, since tariffs are likely to increase and bad publicity could easily occur, the impact will probably steer some of those companies towards the U.S. instead of Mexico.

In addition to the Amazon effect, I've witnessed a number of companies who poorly planned their outsourcing and off-shoring efforts. They now have experience and data to make better decisions.

Since the total cost of importing non-commodity products from Asia is equalizing with what can be achieved in the U.S. or Mexico, near-sourcing becomes a no-brainer when the customer and cash impacts are added to the cost equation. It is also far easier and more successful to communicate and manage when manufacturing is closer to the markets served."

With an uptick in manufacturing and continued concerns of the lack of skilled resources to fill new manufacturing jobs, Anderson is now initiating a new Skills Gap Survey to assess the necessary skillsets for manufacturing positions.

The data will be used to uncover new issues as well as compare and contrast results from 2013. Take the survey here.

To receive the final report or participate in an Anderson-led webinar on outsourcing, near-sourcing, and insourcing, enroll here.

For further questions, contact Lisa Anderson.

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