For decades, companies have relied on offshore manufacturing and supply chains in low-cost regions such as China, India and Southeast Asia. The appeal of these regions is obvious: they have cost advantages, expansive labor pools and well-established industrial ecosystems. However, shifting geopolitical landscapes and fluctuating trade policies are prompting many organizations to rethink their supply chain strategies.
In fact, a survey of 250 senior U.S. executives from KPMG found that 69% of U.S.-serving supply chains are expected to be based in the Americas within the next few years, marking a 10% increase from current levels.
Nearshoring and reshoring bring supply chains closer to home, reduce dependencies on distant markets, and help mitigate geopolitical risks, but they also introduce new challenges like greater competition for suppliers and higher operational costs. A key to successfully navigating these complexities and building resilience lies in leveraging technology. Digital platforms, artificial intelligence (AI), and data analytics offer advanced insights that strengthen supplier relationships and optimize supply chain processes, giving companies a competitive edge.
In times of disruption, this becomes more evident as companies can swiftly navigate challenges with increased visibility. During these periods, companies can reduce risk by creating time to receive or time to survive models, which can help prepare for any potential issues. By layering these roadmaps into software when nearshoring, businesses can strengthen their supply chain and ensure long-term success in an increasingly competitive and dynamic market.
The challenges of regionalized supply chains
As companies pivot toward nearshoring and reshoring, they must be prepared for certain challenges. For many sectors, it may mean a scarcity of suppliers. If supply chain management teams fail to position themselves as preferred partners, they risk losing access to high-quality local providers and services that can enhance productivity and ROI.
If a U.S. or Western country lacks sufficient domestic manufacturing capacity in a key industry, companies operating in that sector may struggle to find local suppliers with the same scale and expertise as previous foreign options. This could lead to inventory deficits and dips in revenue.
Moving production closer to home often equates to taking on greater overhead expenses. In North America and Latin America, for example, higher labor costs and infrastructure gaps make manufacturing more costly. According to a study from the Hackett Group and sponsored by SAP, the top priority for procurement executives in 2025 is to reduce spend, likely due to an uncertain economic outlook.
Organizations need to balance these financial implications while ensuring supply continuity and operational efficiency. And while regional supply chains can offer protection from tariffs and other fallouts of geopolitical conflicts, they remain vulnerable to different external disruptions, like natural disasters, economic instability and regulatory changes.
Leveraging digital platforms for supplier resilience
To thrive in this evolving landscape, businesses must harness the power of digital platforms. Advanced supply chain management technologies offer critical tools to mitigate risk, enhance supplier relationships, and ensure long-term resilience.
Digital platforms equipped with AI and predictive analytics analyze historical data, market trends and geopolitical developments to anticipate potential disruptions and provide real-time insights into supply chain performance. Yet, it’s crucial to ensure all platforms are powered by information from across the enterprise. When companies have access to end-to-end data, including from enterprise resource planning (ERP) software, they can make more informed decisions and adapt quickly to any threats.
This enhanced visibility empowers teams to proactively address issues, maintain supply continuity and reduce risk. Companies can monitor supplier reliability and secure alternative sources before major delays occur, and they can develop contingency plans for expected changes in demand due to tariff-induced cost fluctuations. For example, manufacturing companies can navigate the 25% tariff on steel and aluminum imports by immediately identifying new importers that comply with organizational requirements.
Digital platforms also foster stronger collaboration by facilitating seamless communication between buyers and suppliers. Cloud-based supplier management systems enable real-time updates, performance tracking and collaborative planning. This can transform supply chain management processes as strong supplier relationships are vital to guarantee priority access to goods and materials — especially in a constrained market where multiple companies are competing for the same resources.
Automation is another key benefit of digital platforms. Manual processes can be time-consuming and prone to error but implementing automation enables companies to streamline tasks like sourcing, contract management and supplier onboarding. And with automated workflows reducing administrative burdens, supply chain management teams can spend more time building strong relationships with suppliers and improving strategic decision-making.
Preparing for the future
The anticipated tariffs could impact global supply chains, prompting many companies to explore nearshoring and reshoring strategies as a proactive approach to mitigating disruptions and managing costs. But in today’s volatile trade environment, technology is a requirement for operational continuity and success. Organizations that embrace digitization will not only survive but thrive — because cutting-edge tools like digital platforms, AI and data analytics equip businesses with actionable insights that empower agility and flexibility. And in times of uncertainty, the ability to pivot with precision is the ultimate advantage.
