As global changes reshape the electronics industry, many manufacturers are moving production closer to home through reshoring and near-shoring. Advanced software solutions are essential in this shift. Our software development experts at Fidelity Solutions explore how these technologies transform the electronics industry.
Reshoring vs Nearshoring—What’s the Difference?
Reshoring and nearshoring are sometimes used interchangeably but aren’t the same strategy.
After outsourcing manufacturing overseas, reshoring brings it back to the company’s home country. An American electronics company might reshore by moving production from Asia back to the U.S. so it can respond faster to market changes and enforce better quality control.
On the other hand, near-shoring (also called regionalization or friend-shoring) moves manufacturing closer to the company’s home country. Outsourcing to a nearby country is the middle ground between offshoring and reshoring—it still saves money while avoiding the supply chain complications of overseas production. For example, a U.S.-based electronics manufacturer might nearshore to Mexico or Canada for easier shipping and similar time zones.
7 Reasons Electronics Companies Are Reshoring & Near-Shoring In the US
Reshoring and near-shoring production to the U.S. are becoming more popular among electronics manufacturers. Here are seven reasons driving this shift closer to home:
COVID-19 Pandemic: The pandemic disrupted supply chains worldwide and revealed severe weak points in offshore manufacturing, causing delays and component shortages. Reshoring their production made them less reliant on overseas supply chains they couldn’t easily control.
Political Tensions & Trade Policies: Tensions between the United States and Chinese manufacturing facilities created concerns over tariffs, trade restrictions, and potential disruptions to the supply chain. As a result, the U.S. government enacted trade policies that provided incentives for improving American infrastructure and reshoring manufacturing to the U.S.
Natural Disasters: 2023 marked a record-breaking number of severe, billion-dollar natural disasters worldwide, from wildfires and floods to earthquakes and storms. Concentrating manufacturing in overseas countries most hit by natural disasters created bottlenecks and halted production across multiple industries, including electronics.
Rising Costs: According to Supply Chain Digest, higher wages in China, increased automation, fuel and shipping costs, and new trade policies (like tariffs and tax incentives) mean offshoring manufacturing to Asia is barely cheaper than reshoring and near-shoring.
Quality Control Concerns: It’s challenging for electronics manufacturers to meet strict quality standards across offshore facilities due to a lack of direct oversight and multiple time zones. Delays in communication, different manufacturing practices, and local regulations mean defects aren’t caught until after the products have shipped.
Demand for Faster Delivery: Consumers and businesses expect their products to be delivered fast. Bringing production closer to their customers means electronics manufacturers can shorten delivery times, keep an eye on inventory levels, and monitor customer needs.
Cybersecurity Concerns: Intellectual property (IP) like patents, trade secrets, and proprietary technologies drive competition among electronics manufacturers, so protecting it is critical. There’s a much higher risk of IP theft in offshore manufacturing. Reshoring or near-shoring production helps manufacturers secure sensitive data and track unauthorized access.
Top 6 Software Solutions Making Reshoring & Near-Shoring Possible
The following advanced software solutions are critical in the success of reshoring and near-shoring of electronics manufacturing:
Cloud-based ERP and MES Systems
Quality Management Systems
Digital Twins and Simulation Software
AI-Driven Predictive Analytics & Machine Learning
Logistics Management Software
IP Management Software
1. Cloud-Based ERP & MES Software
Cloud-based Enterprise Resource Planning (ERP) and Manufacturing Execution Systems (MES) manage every aspect of production in one central platform. Systems hosted in the cloud synchronize operations across multiple locations with easy access to production metrics, supply chain updates, and inventory levels. As a result, manufacturers can flexibly manage reshored or nearshored facilities to scale up or adjust to new locations.
Contact Fidelity Solutions if you want to streamline your reshoring operations with a cloud-based ERP or MES system.
2. Quality Management Systems (QMS)
Quality Management Systems (QMS) enable electronics manufacturers to follow strict quality controls across all stages of production, which is especially important in reshored facilities that must meet high standards to compete with overseas production. Tracking, inspecting, and reporting on product quality helps manufacturers comply with regulations and quickly address defects or issues.
Fidelity Solutions can help you keep top-notch production standards with a QMS tailored for reshoring. Contact us to learn how.
3. Digital Twins & Simulation Software
Digital twins virtually mimic production and test adjustments without affecting manufacturing. Electronics manufacturers can examine the layouts of facilities, workflows, and equipment needs before committing to reshoring or near-shoring.
Optimize your reshoring plans with digital twins and simulation software from Fidelity Solutions. Reach out today!
4. Predictive Analytics & Machine Learning
AI and machine learning help electronics manufacturers forecast customer demand, predict equipment maintenance, and optimize production schedules. Anticipating equipment breakdown and supply shortages reduces downtime in reshored or near-shored facilities. Electronics manufacturers can make informed decisions about inventory and workforce needs to streamline the reshoring process.
Connect with Fidelity Solutions to discover how our AI-driven predictive analytics solutions can keep your reshoring projects on track.
5. Logistics Management Software (LMS)
With logistics management software, reshoring manufacturers can efficiently manage transportation and distribution. This is especially useful when switching from international to local shipping. LMS tools optimize delivery routes, manage costs, and streamline communication with carriers to support faster and more reliable delivery.
Learn how Fidelity Solutions can help you deploy logistics management software that makes your reshoring or near-shoring operations successful.
6. IP Management Software
Protecting Intellectual Property (IP) is critical in the electronics industry. IP management software secures sensitive data and restricts unauthorized access, protecting reshoring or near-shoring manufacturing operations against IP theft.
Fidelity Solutions offers IP management solutions that keep your data and patented tech safe—contact us to get started.
Partner with Fidelity Solutions for Custom Software Tailored to Reshoring & Near-Shoring
Advanced software solutions drive the shift from offshoring to reshoring and near-shoring in electronics manufacturing. If you’re ready to explore how Fidelity Solutions can help your company harness the tools to make the shift successful, contact us today!
Comments