The landscape of global business expansion is undergoing a fundamental transformation. For decades, offshoring was the go-to strategy for companies looking to cut costs, but rising geopolitical risks, supply chain fragility, and evolving workforce dynamics have exposed the limitations of this approach.
Enter New-Shoring—an evolution in global strategy where businesses prioritize stability, innovation, and operational resilience over mere cost savings. According to a survey, 76% of executives now recognize New-Shoring as a long-term strategic shift, not just a financial decision. However, the real challenge isn’t just recognizing the need for change—it’s executing it effectively.
This article provides a structured roadmap for organizations looking to implement New-Shoring, drawing insights from real-world case studies, industry best practices, and SRKay Consulting Group’s extensive research.
Understanding Shoring Strategies: Moving Beyond Cost Arbitrage
The shift toward New-Shoring encompasses a range of strategic approaches, including onshoring, nearshoring, and friendshoring, each offering distinct advantages based on cost, risk mitigation, and supply chain agility. As businesses navigate an increasingly volatile global market, selecting the right shoring strategy has become critical for ensuring long-term resilience and competitiveness.
1. Onshoring (Reshoring) – Bringing Operations Back Home
Onshoring refers to the relocation of manufacturing and business functions back to a company’s home country, ensuring greater supply chain security, IP protection, and quality control. For example, General Electric reshored appliance manufacturing to the U.S., leading to higher product quality and reduced lead times.
While onshoring strengthens resilience, it often brings higher labour and operational costs. To offset these, companies are investing in automation, robotics, and AI-driven supply chain optimization to remain competitive.
2. Nearshoring – Optimizing Cost and Proximity
Nearshoring involves relocating operations to neighbouring countries to balance cost efficiency and supply chain agility. For instance, Whirlpool established production facilities in Mexico, cutting logistics expenses and improving delivery efficiency.
Mexico has emerged as a nearshoring hub, favoured by 55% of executives for its USMCA trade benefits, lower labour costs, and industrial growth.
3. Friendshoring (Ally Shoring) – Strengthening Global Alliances
Friendshoring expands operations in politically stable and economically allied nations to reduce exposure to geopolitical risks and trade restrictions. The U.S. has embraced this strategy, forming alliances to protect critical sectors like semiconductors and pharmaceuticals.
With 35% of CEOs ranking political stability as the top factor in New-Shoring decisions, choosing secure locations has become paramount.
Steps to Execute a Successful New-Shoring Strategy
1. Aligning Business Objectives with Market Realities
Companies must align New-Shoring strategies with long-term goals.
- India (75%), Vietnam (70%), and Mexico (55%) lead as attractive destinations due to talent, regulation, and infrastructure.
- Case Study: Apple’s iPhone production expansion in India reflects a shift toward risk-diversified New-Shoring.
2. Conducting a Data-Driven Cost-Benefit Analysis
Organizations must go beyond traditional cost comparisons and consider long-term risk.
- China’s labour costs have risen by 15% annually.
- 83% of North American and 90% of European firms are diversifying post-pandemic.
- Best Practice: Use AI to assess risk, infrastructure, and workforce scalability.
3. Evaluating Supplier Networks & Trade Agreements
Identifying reliable local partners and understanding trade frameworks is essential.
- 70% of executives cite cybersecurity and cloud compliance as key concerns.
- Trade frameworks like USMCA, CPTPP, and PLI provide competitive advantages.
- Case Study: Tesla nearshored EV production to Mexico, leveraging USMCA benefits.
4. Leveraging Digital Transformation & Automation
Technology is key to operational efficiency:
- AI & Analytics for site selection and risk evaluation.
- Automation & Robotics to reduce manual effort.
- IoT & Blockchain for supply chain transparency.
- Cybersecurity to protect IP across locations.
- Case Study: Tesla’s Gigafactories in Mexico and India use AI and automation to boost efficiency and cut costs.
Workforce Development: Addressing Talent Challenges in New-Shoring
1. Investing in Local Talent & Skills Development
Building strong local talent pipelines is crucial.
- India’s GCC workforce is projected to grow to 4.5 million by 2030.
- Vietnam is focusing on STEM and industrial training.
- Case Study: Goldman Sachs’ GCC in India is a fintech innovation and upskilling hub.
2. Hybrid Workforce Models for Maximum Agility
75% of businesses now integrate remote and on-site teams.
- Best Practice: Partner with universities and training institutions to build capabilities in AI, cybersecurity, and automation.
Overcoming Challenges in New-Shoring Execution
Despite its promise, New-Shoring comes with challenges:
- Regulatory & Legal Complexities – Understand local laws, taxes, and compliance.
- Supply Chain Risks – Build multi-location redundancy.
- Cultural Integration – Ensure effective cross-border engagement.
- Case Study: Levi Strauss nearshored in Latin America to reduce lead times and improve inventory management.
New-Shoring as the Future of Global Business Expansion
New-Shoring is more than a trend—it’s a strategic imperative. As companies navigate complex global dynamics, those that invest in digital transformation, resilient supply chains, and skilled talent will lead the future.
With AI-driven automation (22%) and geopolitical shifts (25%) influencing decisions, businesses must proactively adapt to stay competitive. Companies that leverage data analytics, automation, and ESG frameworks will gain lasting advantages and ensure sustainable growth in an uncertain world.