What does "onshoring" or "reshoring" mean?

Onshoring (also called reshoring) is the practice of bringing manufacturing and production operations back to a company's home country, rather than outsourcing to foreign countries. Companies do this to reduce supply chain risks, decrease transportation costs, improve quality control, and respond faster to market changes. In recent years, many North American businesses have accelerated onshoring efforts due to global disruptions and increased awareness of supply chain vulnerabilities.

What is "friend-shoring" in supply chains?

Friend-shoring means working with suppliers and manufacturers in politically friendly or allied countries, rather than regions that might be politically unstable or have conflicting interests. It's a middle ground between complete onshoring (bringing everything home) and traditional global sourcing. This approach helps companies reduce geopolitical risk while still maintaining some cost benefits of international production. For example, a US company might choose to manufacture in Canada or Mexico rather than across distant oceans.

Why are resilient supply chains becoming more important for investors?

Resilient supply chains have become a crucial investment factor because global disruptions (like pandemics, trade wars, and regional conflicts) can severely impact company performance. Businesses with vulnerable supply chains may face production delays, increased costs, and inability to fulfill customer orders. Companies that have built robust, localized supply networks often demonstrate more consistent earnings, better operational continuity during crises, and long-term competitive advantages. For investors, this resilience can translate to more predictable returns and potentially reduced downside risk during global disruptions.

What is Market Cap and why does it matter?

Market capitalization (Market Cap) is the total value of a company's outstanding shares, calculated by multiplying the share price by the number of shares. It indicates a company's size and is typically categorized as large-cap (over $10 billion), mid-cap ($2-10 billion), or small-cap (under $2 billion). Market cap matters because it often reflects company stability and risk levels - larger companies tend to be more established but might grow more slowly, while smaller companies may offer higher growth potential but with increased volatility. When investing in supply chain stocks, market cap helps you understand if you're buying an established industry leader or an emerging player.

15 handpicked stocks

Fortified Supply Chain

These carefully selected companies build resilience by keeping their operations close to home. Professional analysts have identified these businesses for their secure supply lines, which create a competitive advantage and protect against global disruptions.

Han Tan | Market Analyst

Updated 2 days ago | Published at जून 17