Disruptions in the global supply chain have led to a new dynamic for many small and medium-sized manufacturers (SMMs)—the need to be more strategic about “second sourcing” and reshoring. The biggest increase is in what’s referred to as second sourcing, which adds redundancies such as a second source of a supply to minimize risk while increasing options. But supply chain experts also are seeing an interest in relying long-term on domestic supply sources.

In one recent example, a manufacturer was paying $5,000 per roll for material and shipping from China. But delays in shipping forced it to use air freight instead of ocean freight, which raised the cost of shipping alone to $7,500. A traditional tactical approach of reducing shipping costs is not enough to address the potential risk for that manufacturer. The manufacturer is now using supplier scouting to reshore that base material and source it domestically. The SMM realizes that a more integrated approach to its supply chain will help its business planning.

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