The manufacturing industry is changing how it operates. In many ways, it's not unlike changes we've seen before.
Manufacturers have always focused on being close to suppliers and customers. To accomplish this, and to produce enough inexpensive products to meet global demand, companies have moved around the world to reach larger markets and obtain more raw materials and affordable labor.
US manufacturers have traveled offshore to China and India and near-shore to Canada and Mexico. When energy and costs shifted, they would re-shore.
The change we're seeing now is yet another way to bring supply and demand closer. It's called next-shoring, a concept named in 2014 by a team of McKinsey analysts. Next-shoring focuses on the physical proximity to emerging markets, innovation, talent, and customers.
But here's the key difference between next-shoring and industry changes of the past: Next-shoring transcends geography. Manufacturers aren't moving operations to other countries; they're reinventing their entire ecosystems. Through the use of technology, manufacturers can be close to innovation centers or their customers without moving their main operations.
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