Although the term “rightshoring” has been around for nearly two decades, it is rather new to us. The concept of manufacturers choosing the most advantageous location, however, is something we are keenly aware of, and have been for the entire existence of our company. It just makes sense.

Manufacturers Are Headed Toward Rightshoring
Rob Spiegel, February 14, 2025, DesignNews.com

Rightshoring is a blend of outsourcing, offshoring, and nearshoring. The goal is to ensure a balance of efficiency, talent, and proximity to markets.

At a Glance

• Rightshoring is the act of locating manufacturing in the most strategic place.
• Labor costs, political stability, tax incentives, and local expertise have grown in importance.
• Rightshoring is a holistic approach designed to maximize overall business efficiency.

The term “rightshoring” has entered our lexicon. The concept isn’t new, and it isn’t the result of the pandemic. Rightshoring is the act of building plants in the most strategic location, whether that’s in a low-cost region or close to major markets.

I first heard the term during the Great Recession of 2008. Manufacturers were struggling with high shipping costs while frustrated at the time it took goods to reach customers. The goal of rightshoring is to optimize the supply chain by selecting locations that best meet business needs and objectives. Labor costs, political stability, tax incentives, and local expertise have come to play a crucial role in location decisions.

At the time the concept first appeared, cost savings were still paramount, so manufacturers tended to move their production to low-cast areas near their markets: East Europe for Europe and Mexico for North America. All bets are off now when it comes to choosing the most advantageous location.

Proximity to markets is key

Unlike traditional offshoring that focused entirely on cost savings, rightshoring is a holistic approach designed to maximize overall business efficiency and effectiveness. “Offshoring refers to relocating manufacturing operations to foreign countries to capitalize on cost advantages, while reshoring brings production back to the country of origin – the mother country. Rightshoring is a more strategic approach,” Todd Bauman, senior director of global supply chain with Ascential Medical & Life Sciences, told Design News. “Rightshoring involves making informed decisions about manufacturing location by analyzing factors such as landed cost and total cost of ownership models. This method ensures that businesses are making the most cost-effective and customer-centric choices.

The importance of proximity to markets has grown over past two decades. For many companies, that means multiple manufacturing locations. “One of the key principles of rightshoring is to position manufacturing and suppliers as close to your customer base as possible. This proximity is critical in reducing costs, minimizing lead times, and lowering the risks associated with supply chain disruptions,” said Bauman. “By focusing on regional supply chains, companies can enhance responsiveness, improve service levels, and create a more resilient and efficient operation that better meets the needs of their customers.”

Click here for the full report, that includes a Q&A with the author with more details of rightshoring decisions.