For three decades, the logic of global supply chains was simple: manufacture where labour is cheapest, ship to where customers are. China, Vietnam, Bangladesh—wherever costs were lowest, that's where production went. Transportation was cheap. Delays were acceptable. Resilience wasn't really a consideration.

That model is breaking. Not completely, not everywhere, but significantly enough that every supply chain professional needs to reassess assumptions that seemed permanent just a few years ago.

What Changed

The pandemic was the obvious shock. Factories shut. Ports clogged. Ships queued. Products that had always been available suddenly weren't. Lead times measured in weeks became lead times measured in months, if you could get products at all.

But the pandemic accelerated trends that were already emerging. US-China trade tensions had already made some supply chains politically risky. Climate consciousness was already raising questions about transportation emissions. Consumers were already asking where products came from.

Then came further disruption. The Suez Canal blockage showed how fragile single-route dependencies were. Energy price spikes revealed the true cost of long-distance logistics. Geopolitical instability added new uncertainties to established shipping lanes.

Together, these forces are driving a fundamental rebalancing. Not abandonment of global sourcing—that would be impractical and foolish—but serious reconsideration of where "just in time" makes sense and where "just in case" is wiser.

The Resilience Calculation

The old calculation optimised purely for unit cost. Labour rates, material costs, and shipping were plugged into spreadsheets, and the lowest number won. This worked well when everything ran smoothly.

The new calculation includes resilience—the ability to maintain supply when things don't run smoothly. What happens if your sole-source Chinese supplier can't ship for three months? What's the cost of that disruption compared to the saving from choosing them in the first place?

For many organisations, the honest answer to that question is uncomfortable. The supply chain disruptions of recent years have cost billions in lost sales, emergency expediting, and reputational damage. Those costs dwarf the marginal savings from optimising for cheapest unit price.

Resilience has a value. Quantifying it precisely is difficult, but ignoring it entirely is clearly wrong. The question becomes: how much resilience, and how do you build it?

The Nearshoring Trend

Nearshoring—moving production closer to end markets—is one response. European companies sourcing from Turkey, Morocco, or Eastern Europe rather than Asia. North American companies sourcing from Mexico or Central America rather than China.

The advantages are straightforward. Shorter shipping distances mean faster response times and lower transport emissions. Time zone proximity enables easier communication. Fewer handovers reduce complexity and risk. Political and regulatory alignment may be stronger.

The disadvantages are equally clear. Labour costs are typically higher. Manufacturing capability may be less developed. Scale economies may be smaller. For some products, nearshore alternatives simply don't exist at required quality or volume.

The calculation varies by product category. Fashion, where speed matters and trends change quickly, benefits significantly from nearshoring. Heavy industry, where scale economies dominate and products change slowly, may benefit less.

For UK businesses specifically, options are somewhat constrained. Post-Brexit complexity makes European nearshoring less straightforward than it once was. Turkey offers capability but requires careful quality management. Morocco has growing manufacturing sectors but limited scale. The perfect nearshore answer doesn't always exist.

Dual-Sourcing and Redundancy

An alternative to nearshoring is building redundancy into existing supply chains. Rather than single-source from the cheapest option, dual-source from geographically diverse suppliers.

This approach accepts higher costs during normal operations in exchange for continuity during disruptions. If your primary Chinese supplier is affected by lockdowns, your secondary Vietnamese supplier maintains supply. If shipping through Suez is blocked, your backup supplier routes through Panama.

The cost of redundancy is real—you're deliberately not optimising for lowest price. But the insurance value is also real. Companies with dual-source arrangements weathered recent disruptions far better than those with concentrated supply chains.

Implementing dual-sourcing requires careful thinking about which categories warrant the investment. Critical components with long lead times and limited alternatives are obvious candidates. Commodity items with multiple interchangeable sources may not need formal redundancy.

The Inventory Question

"Just in time" was gospel for decades. Holding inventory was waste. The ideal was zero stock, with supplies arriving exactly when needed. This approach assumed reliable, predictable supply chains that delivered on schedule.

That assumption has proven fragile. Many organisations are consciously accepting higher inventory levels as a form of resilience. "Just in case" is replacing "just in time" for critical items.

The calculation here is financial. What's the carrying cost of additional inventory versus the cost of stockouts? For items with high stockout costs—production line stoppages, customer delivery failures, safety risks—holding more inventory is often justifiable.

This represents a genuine strategic shift, not just temporary adjustment. Companies are building warehousing capacity, investing in inventory management systems, and accepting working capital implications that would have seemed unacceptable a decade ago.

The Carbon Dimension

Supply chain carbon emissions—Scope 3 in sustainability accounting—are increasingly scrutinised. For many organisations, transportation of goods represents a significant portion of total carbon footprint.

Nearshoring has obvious carbon benefits. Shipping from Turkey to the UK generates a fraction of the emissions of shipping from China. Road freight from Poland produces less carbon than sea freight from Vietnam, even accounting for the efficiency differences in transport modes.

This creates interesting alignments. Decisions made for resilience reasons often also improve carbon performance. The commercial case for nearshoring is reinforced by sustainability imperatives. Regulators and customers pushing for Scope 3 reduction are, perhaps unintentionally, also pushing for supply chain reconfiguration.

For some organisations, carbon considerations are becoming primary rather than secondary. Choosing the lower-carbon option, even at higher cost, reflects genuine strategic commitment to sustainability. For others, carbon is a useful supporting argument for decisions that make commercial sense regardless.

The Honest Reality

None of this is simple. Global supply chains exist because they deliver real value. Low-cost manufacturing in Asia has enabled products that wouldn't otherwise be affordable. Specialised capability in specific regions has driven innovation and quality.

The rebalancing isn't about abandoning global trade. It's about questioning assumptions, accepting trade-offs, and building resilience into systems that had optimised purely for efficiency.

For most organisations, the answer will be hybrid. Some products nearshored, others remaining globally sourced. Some categories dual-sourced, others accepting single-source risk. More inventory for critical items, lean inventory for others.

The days of simple decisions based purely on unit cost are over. Supply chain strategy now requires genuine strategic thinking—balancing cost, resilience, carbon, capability, and risk in ways that match organisational priorities.

That's more complex than plugging numbers into a spreadsheet. But it's also more honest about the world we actually operate in, rather than the predictable, stable world we once assumed.