Outsourcing Is Changing the Apparel Industry Across the Globe: Nearshoring and Onshoring

In the textile and apparel industry, Outsourcing is one of the toughest decisions to make for many industry players, and vital too. For decades now, Outsourcing has always backed the global textile and apparel industry with numerous economic benefits. Basically, Outsourcing is transferring business operations, products, or services to other areas. It covers everything from selling products or services to shifting an entire business division to different locations. The process involves the transfer of operational activities to value-added suppliers. Outsourcing aims to shorten up the apparel supply chain and see reduction in the costs of services supplied internally.   Many businesses find it challenging to chose the right outsourcing strategy - they all look for better markets to leverage their products or services, which earns the most profit. Moreover, outsourcing has always generated great wealth for the global economy scene. While doing it right is equally challenging, outsourcing is the key to improving market position on both strategic and functional levels by minimizing additional costs. The top two outsourcing options blooming in today’s apparel industry are Nearshoring and Onshoring. Let’s shed some light on each of those.

Nearshoring

  Nearshoring stands for Outsourcing of business processes, products, or services to nearby countries. Outsourcing in neighboring countries reduces the chances of misunderstandings and facilitates work coordination. Basically, Nearshoring is a subset of offshoring. Thus, businesses are betting on nearshoring to maximize their efficiency by traveling and holding more personal meetings to nearby countries, at a lower cost. Along with these, Nearshoring has the below-listed advantages:  

• Communication is easy
• Cost-effective traveling
• Low labor cost
• Identical time zone
• Ability to scale quickly
• Closer-cultural compatibility
• Political similarities
• High-quality talent
• Economic similarities
• Historical Links
• Productivity boost
• Faster problem solving

Along with numerous advantages, a few drawbacks and risks are also involved in Nearshoring:  

• Higher costs than with offshoring
• Cultural Affinity
• Fewer Risks
• Different holidays
• Little-bit of the language barrier
• Cultural nuances

  Nearshoring is the perfect solution for businesses that want constant, real-time collaboration with their resources. For businesses looking to explore Outsourcing on a smaller scale before leaning completely in and embracing offshoring, the nearshore option is super appealing!

Onshoring

  Onshoring means outsourcing to another city in the same country. It involves the relocation of business processes to a lower-cost location inside the country’s border. Onshoring is domestic Outsourcing. The aim of onshoring is to transfer business where the cost of labor and operations are lower. This also offers employees the possibility to work from home. Moreover, the coordination and communication in production are more effective and efficient in onshoring. Apparel businesses are switching to onshoring to reduce the cultural differences, foreign taxing policies, and to boost the country’s economy, of course. Additionally, onshoring also has the following advantages:

• Higher quality services
• Low travel costs
• Data/IP security
• Lower management costs
• No language barrier
• Identical time zones
• No cultural barrier
• Geographical proximity
• More opportunities for development

  Along with these advantages, Onshoring also involves a few disadvantages and risks.

• Labor costs might be higher than for nearshoring
• High competition over talent
• Little bit of a language barrier/dialects

  You can hire suppliers to perform within the national border with a reasonable budget. Businesses of all sizes should benefit and include onshoring in their outsourcing strategy.

Summing up:

  Depending on the organization’s current situation and outsourcing goals, apparel businesses can pick the right Outsourcing option for them. There are many small to big size businesses who try both Nearshoring and Onshoring so they can decide what fits their needs best.

Most of the apparel businesses hire remote teams in targeted countries or cities to work in coordination with their organization. It's easier than it sounds and with the right partner, both you and your business are guaranteed to enjoy the ride and get some glowing results.   To know more about what outsourcing solution and strategy is the best fit for you, visit our contact page and send us a message!