**London**: Rightshoring is gaining traction as businesses strategically position manufacturing closer to markets. This approach shifts focus from cost alone to include factors like political stability and operational resilience, helping companies navigate the complexities of modern economic pressures and tariffs.
The concept of “rightshoring” has gained prominence in discussions surrounding manufacturing and supply chain optimisation. Not a new phenomenon, rightshoring refers to the strategic placement of manufacturing facilities in locations that optimise efficiency, whether that location is in a cost-effective region or in proximity to key markets. The term is being revisited in light of recent global economic shifts, with its roots traceable to the challenges faced during the Great Recession of 2008.
Historically, manufacturers focused on relocating operations to low-cost areas, such as Eastern Europe for European markets and Mexico for North America. However, the shift towards rightshoring represents a departure from purely cost-driven decisions. As Todd Bauman, Senior Director of Global Supply Chain at Ascential Medical & Life Sciences, explained in an interview with Design News, the strategy now incorporates a comprehensive analysis of manufacturing locations that considers factors such as political stability, tax incentives, local expertise, and overall supply chain efficiency.
“Rightshoring involves making informed decisions about manufacturing location by analyzing factors such as landed cost and total cost of ownership models,” Bauman remarked. This approach is intended to help businesses create a customer-centric model that improves operational resilience.
The importance of being close to markets has notably increased over the past two decades, which is leading many companies to adopt multiple manufacturing sites. “One of the key principles of rightshoring is to position manufacturing and suppliers as close to your customer base as possible,” Bauman stated. This strategy aims to reduce costs and lead times while minimising risks associated with supply chain disruptions.
In the present economic landscape, the potential implementation of tariffs on goods adds further complexity to location decisions. Bauman emphasised that managing risk, particularly in terms of cost, is crucial for supply chain leaders in assessing how their operations might be impacted by proposed tariffs. A comprehensive impact analysis across the entire supply chain, including second- and third-tier suppliers, is essential.
Ascential utilises a Free Trade Zone in one of its supply chain regions, which Bauman believes may allow the company to enhance manufacturing capabilities there, thereby mitigating some tariff impacts. With the broader economic context in mind, he suggested that companies must consider whether tariffs are being employed strategically to address issues like trade imbalances or enhance national security.
When asked about the potential for manufacturers to pass on increased costs to customers, Bauman noted that the outcome would depend on various factors, including the results of their impact analyses and the overarching economic situation. He anticipates ongoing uses of tariff measures under administrative directives, particularly as the USMCA trade agreement approaches renegotiation in June 2026.
In considering whether manufacturers might relocate entirely, Bauman addressed the growing focus on landed costs and total cost of ownership while reinforcing the principle of strategic proximity to customer bases as fundamental in driving decisions. He remarked, “This is the core principle driving Ascential’s regional supply chain model,” highlighting the company’s operations that span North America, South America, Europe, and Asia.
The discourse around reshoring and nearshoring also touches on political and resilience considerations. Bauman suggests that concentrating on regional supply chains may provide pragmatic solutions amid current global challenges. He added that this strategy aligns with Ascential’s approach to automating processes within the life sciences and medical device sectors, helping maintain competitiveness.
By maintaining strategically diverse, geographically positioned supply chains, companies like Ascential aim to respond effectively to tariff impacts and geopolitical risks, ultimately striving to enhance operational agility and resilience.
Source: Noah Wire Services
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