Bringing resilience closer: Strategies to reduce risk
Organizations are strengthening supply chain resilience by moving production and critical inputs closer to home. Three key strategies are onshoring, nearshoring, and friendshoring.
Onshoring
Means bringing production or critical inputs back to the home country. This approach increases control, visibility, and quality while reducing reliance on high-risk or distant locations. It improves oversight, political predictability, and compliance, and shortens lead times, although it often involves higher direct costs.
Onshoring is most used in the transport and construction sectors.
Source:
Gallagher
Nearshoring
Involves moving production or key inputs to nearby countries or regions. This strategy shortens supply chains, reduces logistics risk, and improves responsiveness. Nearshoring increases speed, flexibility, and collaboration while maintaining access to lower-cost or specialized capabilities within a closer
geographic footprint. Food and agriculture businesses and energy organizations rely heavily on nearshoring.
Friendshoring
Relocates activities to suppliers in politically and economically aligned countries. It reduces exposure to sanctions, export controls, and national security risks by shifting away from single-country dependencies. Friendshoring helps build supply networks based on stable, strategic alliances. This strategy is preferred in the wholesale and agriculture sectors.
