Recently, Kimball Electronics Business Development Manager, Brian Graham, discussed and gave a presentation on Near-Shoring in the EMS industry during the 2015 IPC Apex Conference. Brian's presentation centered on the trend we are seeing from OEM's and our strategic customers to outsource smartly to EMS partners with key regional focus.
The term "nearshore" has been taken from the fishing industry and became widely used in the world of EMS outsourcing. It refers to a form of outsourcing other than offshoring. The difference between the offshore outsourcing and the near-shore outsourcing is that in the second case, the partner to which an organization outsources its business is located geographically closer than the one in the case of offshoring.
Lately, more and more organizations are returning to near-shore outsourcing rather than offshore outsourcing. Many countries previously known as low cost destinations for off shore outsourcing are now being reexamined for near-shoring options.
Amid rising wages in many countries, rising fuel costs, and extended supply chain risks, companies that sell into a particular market are actively considering near-shoring EMS outsourcing closer to "home". The top reasons include: lower freight costs, lower inventory (in-transit) costs, and improved speed-to-market. Near-shoring is a good alternative because it offers greater security and constancy along with cost-effectiveness.
Clearly, near-shoring offers the ability to maintain a high level of control while mitigating the cost of doing business. The range of different models that can be attached to a near-shoring with an EMS provider brings flexibility to companies who want to streamline their operations without incurring too much risk.
Near-shoring has become a marketing differentiator for those clients and EMS providers who wish to set themselves apart by servicing their customers in market close to "home".
Kimball Electronics offers six global EMS facilities available for near-shoring:
- North America: Mexico, United States – Indiana, United States – Florida
- Europe: Poland, Romania (under development)
- Asia: China, Thailand
Congratulations to Brian on an outstanding presentation. You can check out Brian Graham's Interview from the IPC APEX Conference with RealTime with…IPC here: http://realtimewith.com/rtwboot/show.php?id=81&vid=3622