Nearshoring and reshoring decisions should never rest on a labor-cost comparison, because labor is only one line in a much larger ledger. The workable method, supported by both academic modeling and supply chain consulting practice, is a Total Cost of Ownership (TCO) framework that adds tariffs, freight, inventory carrying costs, disruption risk, and quality outcomes to the direct costs of production, then pairs that quantitative view with a structured assessment of geopolitical and resilience factors. This article lays out that two-part framework so a strategist can run the comparison for their own chain, rather than adopt any single strategy as a default answer.
The Shifting Landscape of Global Supply Chains
The once-dominant offshoring model—sourcing goods from distant, low-cost countries—is under scrutiny from rising tariffs, supply chain disruptions, and political instability, as OPSdesign's analysis of location strategy notes. Averitt's industry overview traces the same momentum to geopolitical tensions, trade wars, and the COVID-19 pandemic, which exposed the vulnerabilities of long, complex supply chains. Mexico's manufacturing role, for instance, builds on groundwork laid as early as 1965 with the Maquiladora Program, showing that the alternatives are not novel but newly urgent.
Perspectives gathered from supply chain executives by Kestria point to the same pressure points. Jaro Caban, a global supply chain operations executive at ProffiZON in Belgium, describes the appeal as mitigating "disruptions, delays and uncertainties impacting supply chain networks and manufacturing footprints." The strategic question is therefore not whether to react to disruption but how to evaluate alternatives in a disciplined, comparable way.
