You're the operations director of an electronics company in Guadalajara. All your production is concentrated in a single distant low-cost hub, and recent scares —shutdowns, tariffs, endless lead times— have the board divided: some want to bring everything back home, others want to move nothing. But reshoring doesn't mean recovering cheap labor —it won't be cheap— it means balancing cost, resilience, and responsiveness. And the optimal point is usually in the middle.
The situation
After decades of offshoring to the cheapest hub, many companies are reconsidering. But reshoring isn't nostalgia for cheap labor —at home it will be expensive— nor ideology: it's a decision about total cost, resilience, and responsiveness. Bringing production closer cuts lead times, tariff exposure, and geopolitical risk, but raises the unit cost. The optimal point is rarely an extreme: it's usually nearshoring —closer than Asia, cheaper than home— and a diversified footprint ("China+1"), like Apple and Foxconn's reconfiguration outside a single country.
Here's the trap, in both directions. Staying 100% in the distant hub is the cheapest per unit, but fragile: a shutdown, a tariff, or a conflict leaves you without product. Bringing everything back home is resilient and fast, but expensive and slow to build, and throws away the competitive cost. The defensible answer is nearshoring and diversification: bring production close enough to gain resilience and responsiveness without paying the full cost of home, and spread it across several sources. Decide by total cost and resilience, not by wages or the flag.