In the textile and apparel industry, Outsourcing is one of the toughest decisions to make for many industry players, and vital too. Since decades, 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. Outsourcing 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 a reduction in services supplied internally.
Many apparel businesses find it challenging to find the right outsourcing strategy for their business. They all look for better markets to leverage their products or services, which earns the most profit. This way, Outsourcing has always been generating good wealth for the global economy.
In the competitive era, apparel businesses are struggling to find the right outsourcing strategy. While doing it right is equally challenging. Outsourcing is a key to improve market position on both strategic and functional levels by minimizing additional costs, only if done rightly.
The top two outsourcings booming today’s apparel industry are Nearshoring and Onshoring. Let’s put some light each, one by one.
The term – Nearshoring stands for Outsourcing of business processes, products, or services to nearby countries. Outsourcing in neighboring countries reduces the chances of misunderstanding and facilitates work coordination.
Basically, Nearshoring is offshoring with added restrictions. It’s a subset of offshoring.
Apparel businesses are betting on nearshoring to maximize their business efficiency by traveling and holding more personal meetings to nearby countries, at a lower cost. Along with these, Nearshoring has 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 the Nearshoring.
- Costly than offshoring
- Cultural Affinity
- Fewer Risks
- Different holidays
Little-bit of the language barrier
- Cultural nuances
Nearshoring is the perfect Outsourcing for the apparel businesses who want constant, real-time collaboration with their in-house staff. For businesses looking to explore Outsourcing on a smaller scale before leaning completely in and embracing offshoring, the nearshore option is super appealing!
Onshoring means outsourcing to another city in the same country. Outsourcing involves the relocation of business processes to a lower-cost location inside the country’s border.
Onshoring is domestic Outsourcing.
Onshoring involves transferring a business prospect, products, or services, to the other graphical areas (non-metropolitan cities) in the same countries. The aim of onshoring is to transfer business where the cost of labor and operations are lower. This also offers employees to work from home.
Moreover, the coordination and communication of production are more effective and efficient in onshoring.
Apparel businesses are switching to onshoring Outsourcing to reduce the cultural differences, foreign taxing policies, and to boost the country’s economy, of course. Along with these, onshoring has below-listed advantages.
- Higher quality services
- Low travel costs
- Data/IP security
- Lower management cost
- 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 cost is higher than nearshoring
- High competition over talent
- Creativity and innovation in business
- Little bit of language barrier
Onshoring is the right Outsourcing when considering the relationship between geography and Outsourcing. Apparel businesses hires suppliers to perform within the national border with a reasonable budget. All sizes of businesses should involve onshoring in their outsourcing strategy.
Depending on the organization’s current situation and outsourcing goals, apparel businesses can pick the right Outsourcing for them. There are many small to big size businesses who are preferring Nearshoring and Onshoring over any other.
Most of the apparel businesses hire remote teams in targeted countries or cities to work in coordination with the organization. And it’s easy to manage a remote team at various locations.
To know more about micro and macro-economic factors of major outsourcing destination with statistical analysis, visit TexPro.