When COVID-19 shut down entire cities in China, interrupting supply chains around the globe, many companies began to think about reshoring their manufacturing operations in the U.S. or nearby countries. By July, in fact, two in three (69%) domestic manufacturers were considering bringing production to North America (compared to 54% in February), according to Thomas Insights.
A logical move for some, this nonetheless isn’t going to be a cheap endeavor. In a new report, Bank of America predicts that companies could rack up a $1 trillion bill in the process of reshoring some or all of their operations. And while global supply chains may have been built to maximize returns by optimizing labor cost arbitrage and lower overheads, the pandemic quickly exposed the fragility of these arrangements.
