UPS study finds more European companies are adopting “right-shoring” strategies

A new study conducted for UPS has found that more than half (56%) of European companies now see “right-shoring” as part of their strategy. “Right-shoring,” explained UPS, “balances a number of factors to determine the proximity of sourced materials to production, warehousing and distribution. These factors could include cost, quality and the time it takes to recover from any operational failures.”

UPS also found that “near-shoring”, which moves manufacturing or assembly closer to the location of demand, continues to gain in popularity as companies aim to “improve service levels, reduce inventory in transit and seek greater control over product quality and intellectual property”.

“There is a clear trend to move manufacturing and assembly closer to demand,” said Scott Aubuchon, vice president marketing at UPS Europe. “Thirty five percent of high-tech logistics decision makers in Europe are planning on near-shoring – up 9 percentage points from 2013 findings. Fifty four percent of respondents in Europe moved manufacturing closer to demand two or more years ago and 34% moved assembly closer to demand this year.”

However, UPS added that while it did see a continuing rise in both “near-shoring” and right-shoring, it is nevertheless the case that “off-shoring”, which moves manufacturing or assembly to countries with low labor costs, remains the most common strategy. “Fifty nine percent of European survey respondents say they currently off-shore,” added UPS.

What the survey does show is that companies are continually changing and fine-tuning their supply chains to meet their manufacturing strategies – and this will of course have a significant impact on transport and delivery players.