In today’s rapidly shifting global economy, manufacturers are rethinking their approach to production locations. Traditional offshoring—where companies move manufacturing to low-cost countries—no longer provides the efficiency and stability needed to compete. Meanwhile, reshoring, or bringing production back to a company’s home country, isn’t always the most cost-effective solution either. Enter rightshoring, a strategic, data-driven approach that optimizes manufacturing location based on factors like cost, risk, supply chain resilience, and proximity to customers.
What is Rightshoring?
Rightshoring is a blend of offshoring, reshoring, and nearshoring, designed to ensure the best possible balance of cost, talent, supply chain efficiency, and market proximity. Rather than focusing solely on cheap labor or nationalistic policies, rightshoring takes a holistic approach, analyzing factors such as:
- Landed costs (including tariffs, logistics, and taxes)
- Total cost of ownership (TCO)
- Geopolitical and economic stability
- Local expertise and skilled labor availability
- Supply chain resilience and risk mitigation
This model helps manufacturers optimize their supply chains, reducing costs while improving operational flexibility and responsiveness.
Why Proximity to Markets Matters
The past two decades have highlighted the growing importance of regionalized supply chains. Manufacturers that once relied on low-cost overseas production now face rising shipping costs, supply chain disruptions, and longer lead times. Rightshoring prioritizes locating manufacturing and suppliers closer to end markets, offering several key benefits:
- Lower transportation costs and carbon footprint
- Reduced lead times and faster delivery to customers
- Greater flexibility in responding to demand fluctuations
- Minimized exposure to trade wars, tariffs, and regulatory changes
As Todd Bauman, Senior Director of Global Supply Chain at Ascential Medical & Life Sciences, explains, rightshoring is about “positioning manufacturing as close to customers as possible to enhance responsiveness, minimize supply chain risk, and improve service levels.”
Tariffs & Trade Policy: A Key Driver of Rightshoring Decisions
Tariffs and trade policy shifts are reshaping global manufacturing strategies. With increasing regulatory uncertainty, companies must conduct impact analyses to understand how tariffs affect both direct production costs and multi-tiered supplier networks.
For example, Ascential operates within a Free Trade Zone (FTZ), allowing the company to leverage tariff exemptions and optimize regional production based on shifting trade conditions. Companies employing similar strategies can restructure supply chains proactively rather than reactively moving operations when trade policies change.
The Future: Moving Beyond Reshoring to Smarter Supply Chains
While reshoring initiatives have gained political and economic traction, rightshoring presents a more strategic and adaptable solution. Rather than a one-size-fits-all approach, companies are developing regionalized supply chain models that integrate automation, mitigate geopolitical risk, and optimize manufacturing location based on total business impact.
Bauman emphasizes that rightshoring is not just about cost—it’s about long-term resilience:
“Reshoring is an important part of supply chain strategy, but the focus should be on ensuring manufacturers are strategically located near their customers, not just bringing production back home.”
By adopting rightshoring principles, companies can create smarter, more resilient supply chains that respond dynamically to economic conditions, trade policies, and customer demands—ensuring they remain competitive in an unpredictable world. For help implementing rightshoring and other supply chain strategies, contact us today.