What is Friendshoring or ally-shoring?
The trend of offshoring – basing processes or services overseas to take advantage of lower costs – was followed by reshoring aka onshoring, moving operations from overseas back to the country it is originally located. From offshoring came nearshoring, which refers to the practice of moving operations to a nearby country, still with lower production or labor costs than its original country, rather than one farther away.
Ally-shoring, more widely known as friendshoring, is adjacent to nearshoring in that it calls for the movement of outsourcing to countries with shared values in the hopes of creating more resilient supply chains.
Friendshoring aims to deepen economic integration with a large number of trusted trading partners that we can count on. And it seeks to build in supply-chain redundancies to lower business risks, allowing us to achieve economic resilience and realize economic efficiencies simultaneously.
As the last few years have exposed vulnerabilities in critical global supply chains, the call for resiliency in the face of economic uncertainty and pandemics alike comes as no surprise.
But who, exactly, are these “friends”?
Like the proverb goes, “don’t put your eggs in one basket.” The goal of friendshoring is to diversify from concentrated supply chains, not to limit trade to a small group of countries.
What it Means for Businesses
Having a big circle of friends has, historically, proven to be a sound strategy in life as well as business. Only time will tell what specific results friendshoring will bring about, but the theory is sound. For now, the best move for business would be to diversify among several suppliers without cutting your main supplier down to zero. This limits the risk that a friendly country today becomes less reliable tomorrow, and, in theory, will redirect economic opportunities to more developing countries.
EPIC’s Proven Nearshoring Model
The heart of EPIC Software Development lies in Costa Rica – not just for its talented and well-educated workforce but also for the economic and political stability of its democratic government. This, in combination with our highly skilled workforce and local team of experienced project managers, make it possible for us to provide long-term strategic planning and execution at reduced costs.
Contact us today to discover how EPIC can deliver the best possible outcomes and long-term value for your software development projects.