Homeward bound: nearshoring continues, labor becomes a limiting factor, and automation takes root

January 1, 2017
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Many of the labor-cost advantages that initially spurred companies to move their manufacturing offshore have eroded—most notably in China. Yet as companies bring manufacturing capacity back, they face a new challenge: not all local labor markets are sufficiently deep.

At a glance

  • As the companies relocate production closer to home, some are facing mounting labor challenges— especially when it comes to finding people to fill key manufacturing roles
  • Those shortages may lead to higher-than-expected labor costs and other ramifications that could make nearshoring less attractive.
  • Robotics and automation have evolved to the point where they’ve become a cost-effective way to augment many manufacturing processes.
  • Yet a more automated manufacturing environment does not eliminate the need for talent. Instead, it changes the critical skills that workers need to have.
  • Companies will have to invest to develop that internal talent and gain a competitive edge.

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