The aftermath of the global pandemic has changed manufacturing companies across the United States. As the world grapples with supply chain disruptions, manufacturing executives have sought ways to secure their distribution channels and keep their firms profitable. An early 2022 survey of C-suite executives also demonstrated that 90% were actively relocating production out of China or had intentions to do so, substantiating the momentum of this trend.
Keystone Private Capital is a guiding light in this chaos, empowering firms in the strategic maneuvers of reshoring and onshoring their supply chains. Spearheaded by leader Angel Gonzalez, the firm has turned these trends into imperatives for companies seeking to regain operational control and ensure unimpeded access to critical goods for Americans.
Reshoring vs. Onshoring: The Crucial Distinction
Reshoring represents a reversal of the widespread globalization trend from the 90s, as it involves bringing back previously outsourced manufacturing and operations to domestic markets rather than relying on international supply chains. This could involve moving production facilities, assembly lines, and other operations back to the company’s home country. Such a reversal was further strengthened post-pandemic, exposing vulnerabilities in global supply chains and highlighting the importance of local production and self-reliance.
Onshoring, while conceptually akin to reshoring, refers to locating business operations or manufacturing facilities within the same country where the company’s headquarters are located. In other words, onshoring involves setting up operations in the domestic market from the outset without going through a phase of offshoring. Similar to reshoring, onshoring has been a focus of US manufacturing firms in implementing resilient supply chains for their operations.
Building for the Future: Warehouse Space and Redundant Inventories
Some manufacturers are also reimagining their warehousing strategies in pursuing resilient supply chains. Redundant inventories have become a priority, necessitating additional warehouse space.
In another reversal of a 90’s trend, in this case, “Just In Time Inventory,” firms have realized that keeping some of their critical inventory on hand is important. While this necessitates more expense, it also gives executives peace of mind that they’ll be able to satisfy their most loyal customers. A recent publication by PWC suggested that firms are pursuing “Targeted Profitable Redundancy” to mitigate their supply chain risks by storing excess supply for premium customers. This trend reversal has also been a significant demand driver for Industrial Real Estate properties.
From Trend to Necessity: The Reshoring and Onshoring Landscape
The pandemic accelerated this shift for manufacturers, emphasizing the need to bring supply chains closer to home. This wasn’t just about economics; it became a matter of national security. The glaring shortages of essential items like semiconductors and medical supplies during the pandemic highlighted the critical nature of this change.
Many manufacturers are now moving their production to Mexico and directing their distribution through the US. By doing so, they benefit from favorable labor conditions and strengthen their North American supply chains. The Kearney Reshoring Index shows a significant trend: a 26% increase in US imports of Mexican-manufactured goods since spring 2020.
Border-adjacent real estate markets with strong distribution networks are reaping the benefits. Prime reshoring destinations like Florida, Arizona, Texas, and parts of the Mountain West now have thriving industrial real estate sectors with low vacancies and strong growth in supply and rent. Keystone Private Capital, with its deep expertise in real estate investment, stands ready to help businesses navigate these shifts and achieve their strategic objectives.
Keystone’s Vision and Strategic Approach
Keystone Private Capital‘s influence extends beyond conventional real estate services. The firm’s proficiency in identifying, managing, and developing properties aligns with the intricate needs of businesses embracing the reshoring and onshoring paradigm. However, pursuing their strategy hasn’t come without challenges, as Industrial Real Estate itself has undergone supply constraints from these emergent trends. The company has resorted to creative strategies such as remodeling old industrial buildings or repurposing other types of buildings to circumvent these challenges.
Gonzalez, the visionary leader of Keystone Private Capital, underscores their commitment to innovative solutions by stating, “With current constraints on the supply of industrial buildings, we often find ourselves looking for creative solutions for our clients.”
Their expertise aligns with their clients’ emerging needs, enabling their firms to secure risk-adjusted returns while achieving strategic milestones. By offering tailored strategies and leveraging their deep industry knowledge, Keystone Private Capital is an indispensable ally for businesses striving to fortify their supply chains and optimize their operations in the new economic landscape. Through these efforts, the company has secured favorable risk-adjusted returns for their clients during this turbulent economic period.
As the imperatives of reshoring and onshoring continue to shape the business landscape, Keystone Private Capital has gained the trust of companies pursuing operational sovereignty and national security. Through innovative solutions, strategic insights, and steadfast partnership, the firm contributes to the resilience of supply chains that underpin the American economy.