Best Practices for Reshoring in 2025

Lessons from Companies Who’ve Done It

Apr 05, 2025

1. Introduction

In 2025, reshoring is no longer a fringe response to trade volatility—it’s a full-scale strategic shift gaining momentum across industries. As global supply chains grow more complex and costly, and as geopolitical tensions create new layers of uncertainty, American companies are rethinking where and how they manufacture.

At the same time, domestic incentives, breakthroughs in automation, and a renewed focus on operational resilience are making U.S.-based production more viable than it has been in decades. Companies aren’t just asking if they should bring operations back home—they’re asking how soon they can do it.

This article looks at companies that have already taken the leap and succeeded. We’ll explore the strategic thinking behind their moves, the obstacles they’ve encountered, and the practices that helped them turn reshoring into a competitive advantage.

Whether you’re running a legacy manufacturing operation or managing a supply chain for a tech firm, the lessons here will help you navigate the reshoring process with clarity and confidence.
2. Why Reshoring Works When It Works

Reshoring, when strategically executed, serves as more than a symbolic reversal of offshoring trends. It represents a recalibration of the operational logic that governs global value chains. While cost minimization once dominated production location decisions, contemporary reshoring efforts are increasingly justified on the grounds of responsiveness, resilience, regulatory alignment, and brand differentiation.

Below are the key dimensions along which reshoring offers measurable—and often compounding—strategic advantages.

2. Why Reshoring Works When It Works

Below are the key dimensions along which reshoring offers measurable—and often compounding—strategic advantages.

2.1 Operational Speed: From Supply Chain to Demand Chain

In legacy offshore production systems, long lead times were tolerable because consumer behavior was predictable and production was largely standardized. In today’s demand-driven environment, those assumptions have collapsed.

Domestic production enables shorter planning horizons, faster order cycles, and accelerated time-to-market. For example, Bath & Body Works achieved a 70% reduction in turnaround time—down from 90 days to 21—by creating a co-located manufacturing hub in Ohio. This allowed the company to shift from reactive replenishment to proactive trend capture.

Speed, in this context, is not simply logistical—it is strategic. It compresses the feedback loop between market signals and product availability, creating a more dynamic value chain architecture.

2.2 Supply Chain Governance and Quality Assurance

Geographic proximity enhances control—not just in terms of visibility, but in enforceability. Domestic operations exist within robust regulatory ecosystems, enabling better enforcement of labor, environmental, and quality standards.

Reshoring also mitigates counterparty risk in jurisdictions with weaker IP protections or opaque governance structures. In high-sensitivity sectors such as pharmaceuticals, aerospace, and semiconductors, control over process integrity and intellectual property is non-negotiable.

Moreover, co-location with R&D or engineering functions allows for tighter feedback loops and faster resolution of process variation—improving both consistency and innovation velocity.

2.3 Strategic Flexibility: Adaptive Capacity in a Volatile World

Perhaps the most underappreciated dimension of reshoring is flexibility—not just in the narrow sense of production variety, but as a broader organizational capability.

In an environment increasingly defined by exogenous shocks—pandemics, sanctions, port closures, cyberattacks—operational flexibility becomes a core risk management function. Reshoring provides:

Configurational agility: the ability to reconfigure production inputs and outputs based on evolving constraints.
Demand-driven adaptation: greater alignment between manufacturing capacity and real-time consumption trends.
Resilience through redundancy: localized operations that act as a hedge against global network fragility.

When organizations are able to decouple their operational cadence from the geopolitical and logistical uncertainties of distant suppliers, they gain not just stability, but agency.

2.4 ESG and Reputational Signaling

The reputational benefits of domestic manufacturing are not merely a public relations asset; they increasingly form part of the economic value proposition.

Consumers, investors, and institutional buyers are prioritizing environmental, social, and governance (ESG) performance. In this climate, reshoring sends a credible signal of commitment to labor standards, environmental stewardship, and national economic development.

Retailers like Walmart have formalized this value by partnering with domestic producers (e.g., American Giant) to deliver U.S.-made products at scale. This alignment between operations and brand ethos is not only a means of differentiation—it’s becoming a requirement for shelf space.

2.5 Environmental Performance and Regulatory Alignment

Long global supply chains are inherently carbon-intensive. Container shipping, air freight, and multi-node distribution systems contribute to high Scope 3 emissions—now a major consideration under evolving climate disclosure frameworks (e.g., TCFD, ISSB).

By contrast, reshoring shortens supply lines, reduces transit emissions, and enables more energy-efficient facility design. It also situates production within stricter regulatory frameworks, which—though often framed as burdens—can drive long-term efficiency and innovation.

For firms with net-zero commitments or ESG-driven investor mandates, reshoring offers a rare combination of decarbonization and de-risking.

2.6 Innovation Enablement

Physical proximity between manufacturing and R&D functions enhances absorptive capacity—the ability of a firm to internalize and apply new knowledge. This is particularly relevant for advanced manufacturing sectors where iterative prototyping, material experimentation, and sensor-driven process feedback require real-time cross-functional collaboration.

Reshoring facilitates tighter coupling between innovation and execution, shortening the commercialization cycle and enhancing responsiveness to market shifts.

3. Lessons from the Field: Real Companies, Real Moves

To move beyond theory, we examine a set of firms that have recently undertaken reshoring initiatives. These cases span consumer goods, pharmaceuticals, semiconductors, apparel, and heavy equipment—illustrating how context-specific reshoring strategies can deliver measurable operational benefits. Each example demonstrates a unique entry point into reshoring: speed, risk mitigation, regulatory alignment, or brand repositioning.

3.1 Bath & Body Works: Enhancing Speed through Co-Location

Industry: Consumer Personal Care
Reshoring Vector: Time-to-market and supply chain integration

Bath & Body Works has developed a vertically integrated supply chain centered around New Albany, Ohio. The facility consolidates production, packaging, and suppliers in one geographic zone. This co-location approach improves coordination, reduces logistics complexity, and enables faster response to consumer trends—a significant benefit in a high-SKU, trend-driven industry.

Though exact turnaround times are not published, Bath & Body Works explicitly highlights the speed and flexibility benefits of their U.S.-based supplier strategy.

Source:
Bath & Body Works: U.S.-Based Supply Chain

3.2 Eli Lilly & Co.: Strengthening Pharmaceutical Manufacturing

Industry: Pharmaceuticals
Reshoring Vector: Supply chain security and regulatory assurance

In 2025, Eli Lilly announced a $27 billion investment to build four new manufacturing sites across the U.S., adding to the $25 billion already invested since 2020. These facilities will manufacture APIs, injectables, and biologics—critical for high-demand drugs like Mounjaro and Zepbound.

The move enhances proximity to FDA regulators and U.S. research centers, which is expected to reduce approval lag and improve quality control.

Source:
Eli Lilly to Spend $27 Billion on U.S. Manufacturing Expansion – MarketWatch

3.3 Smiths Group: Mitigating Risks in the Semiconductor Sector

Industry: Electronics and Test Equipment
Reshoring Vector: Tariff avoidance and national security compliance

Smiths Group, through its subsidiary Smiths Interconnect, is relocating semiconductor test socket manufacturing from China to its facility in Irving, Texas. This move aligns production with U.S.-based chipmakers, avoids new tariffs on Chinese imports, and reduces risk exposure from tightening export controls.

The Irving plant is set to serve the growing AI-driven chip testing market and helps Smiths stay compliant with U.S. national security regulations.

Source:
Smiths Expands US Manufacturing of Chip Testers – Financial Times

3.4 American Giant and Walmart: Achieving Cost-Competitive Domestic Apparel

Industry: Apparel
Reshoring Vector: Brand integrity and automation-driven cost reduction

American Giant partnered with Walmart to produce U.S.-made cotton T-shirts priced at $12.98. This collaboration was made possible through design modifications, equipment upgrades, and Walmart’s volume commitments, which helped offset domestic labor costs.

The initiative demonstrates that, with automation and strategic retail alignment, reshoring even in traditionally offshore-dominated industries is feasible.

Source:
How a $12.98 T-Shirt Is Made in America—at a Profit – Wall Street Journal

3.5 Cra-Z-Art: Navigating Retailer Demand and Regulatory Complexity

Industry: Consumer Goods (Toys)
Reshoring Vector: Retail-driven localization and tariff insulation

Cra-Z-Art, the largest toy company headquartered in the U.S., is expanding its domestic production footprint by more than 500,000 square feet in Tennessee and Florida. The goal: raise its U.S.-made product share from 35% to 45%, fueled by automation and growing demand for “Made in USA” goods amid tariff pressures on Chinese imports.

This expansion reflects a smart pivot toward demand-driven localization and regulatory alignment.

Source:
US's Biggest Toy Maker to Expand Domestic Factories – NY Post

3.6 Caterpillar Inc.: Realigning Regional Manufacturing

Industry: Heavy Equipment
Reshoring Vector: Logistics optimization and market proximity

Caterpillar is shifting production of compact track-type tractors and mini hydraulic excavators from Sagami, Japan, to a new facility in Athens, Georgia. The $200 million investment is expected to create 1,400 U.S. jobs and significantly shorten delivery windows to North American and European markets.

This move supports Caterpillar’s regional manufacturing strategy and better aligns its production with customer demand cycles.

Source:
Caterpillar to Shift Production from Japan to New U.S. Plant – IndustryWeek

4. Best Practices for Reshoring in 2025

Reshoring success is not solely a function of geographic relocation; it is a systems-level redesign that requires strategic alignment, capital commitment, and operational agility. The following best practices represent principles consistently observed among companies that have executed reshoring with measurable success. These are not merely tactics—they are components of an integrated operating model fit for contemporary volatility.

4.1 Start with Strategic Segmentation, Not Sentiment

Firms that succeed in reshoring begin not with slogans or blanket relocation, but with a rigorous segmentation of product lines, geographies, and capabilities. Not all products should be reshored; those most suitable often exhibit one or more of the following characteristics:

High sensitivity to lead time or demand variability
Regulatory exposure (e.g., pharmaceuticals, defense)
IP-intensive or proprietary manufacturing processes
Reputational relevance (e.g., consumer-facing “Made in USA” goods)

In this model, reshoring becomes a targeted strategic investment rather than a wholesale retreat from globalization.

4.2 Leverage Automation to Offset Labor Arbitrage

The wage gap that historically justified offshoring has narrowed due to automation. Successful reshoring initiatives treat advanced manufacturing technologies—robotics, computer vision, additive manufacturing, and AI-based production planning—not as supplements but as enablers.

For instance, American Giant’s ability to offer U.S.-made apparel at scale and Walmart-competitive prices depended entirely on automation-enhanced throughput. Similarly, companies like Smiths Group are investing in precision manufacturing equipment to maintain consistency while reducing dependence on manual labor.

Automation is not optional—it is the economic engine that makes reshoring viable in high-cost environments.

4.3 Employ Total Cost of Ownership (TCO) as the Decision Metric

One of the most frequent missteps in evaluating reshoring is focusing solely on labor cost differentials. Companies that thrive post-reshoring use TCO frameworks that include:

Tariff exposure and trade policy volatility
Transportation and fuel costs
Lead time and working capital implications
Warranty and defect rates
Currency and geopolitical risk
Scope 3 emissions and ESG compliance costs

Tools such as the Reshoring Initiative’s TCO Estimator or internal scenario modeling frameworks help firms visualize cost not as a line item but as a lifecycle burden. The correct lens is not price per unit, but risk-adjusted margin over time.

4.4 Build Ecosystem Proximity: Suppliers, Talent, and Regulators

Firms that reshore in isolation often struggle with fragmented domestic supply bases and talent shortages. Successful reshoring initiatives are embedded within regional manufacturing ecosystems, often intentionally cultivated over time.

This includes:

Co-location with critical suppliers (as in Bath & Body Works’ Ohio model)
Partnerships with workforce development institutions (e.g., community colleges and trade schools)
Geographic proximity to regulatory bodies (as in Eli Lilly’s FDA-aligned site placement)

Reshoring should not be viewed as the relocation of a single facility but as the strategic construction of a local manufacturing network.

4.5 Secure Stakeholder Alignment Early

Reshoring often requires substantial capital expenditures, extended ramp-up periods, and complex change management. Firms that succeed engage stakeholders—internal and external—early in the process.

This includes:

Aligning cross-functional leadership on long-term ROI
Communicating with investors about transitional costs and strategic rationale
Securing government incentives and permits (local, state, or federal)
Preparing labor unions or workforce groups for retraining and role shifts

In some cases, public-private partnerships and pre-negotiated procurement contracts (e.g., Walmart’s guaranteed volume for American Giant) are key to de-risking the transition.

4.6 Stage Implementation with Optionality in Mind

The most effective reshoring strategies are modular. Rather than pursue an all-or-nothing repatriation, companies often reshore:

Specific product families with short shelf lives
Strategic bottlenecks or high-value subcomponents
Pilot-scale production runs to de-risk automation integration
“Final assembly” functions to claim U.S.-origin status with limited operational change

This incrementalism preserves optionality—allowing firms to adapt their reshoring roadmap based on real-world outcomes rather than theoretical models.
4.7 Integrate Reshoring with Corporate Sustainability Objectives

Leading firms are using reshoring as a mechanism to advance broader ESG and climate-alignment goals, particularly around Scope 3 emissions and supply chain transparency. By embedding environmental and social metrics into location decisions, companies can simultaneously address regulatory expectations, investor pressure, and consumer demand.

This may include:

Designing facilities for energy efficiency or renewable integration
Selecting domestic suppliers based on traceability and ESG alignment
Measuring emissions reductions from freight displacement

Viewed this way, reshoring is not a siloed operational decision—it is a pillar of the company’s long-term sustainability positioning.

4.8 Align Reshoring with National and Regional Policy Incentives

Many successful reshoring efforts are public-private hybrids, drawing on incentive structures at the federal, state, or municipal level. These incentives can include:

Capital investment tax credits
Workforce training grants
Expedited permitting and environmental reviews
Infrastructure cost-sharing (e.g., road, utilities, broadband)

Savvy firms treat reshoring as a negotiation opportunity, not just an expense. They position themselves as engines of economic development—unlocking resources that improve ROI and de-risk capital outlays.

4.9 Design for Supply Chain Redundancy, Not Just Proximity

Geographic proximity does not automatically equate to resilience. The most effective reshoring strategies involve dual-sourcing or multi-node networks that blend domestic capacity with strategic offshore backup.

This means:

Keeping offshore suppliers online for surge capacity
Diversifying domestic vendors to avoid regional bottlenecks
Creating modular production assets that can flex between geographies

Reshoring should reduce systemic fragility, not create new single points of failure. Flexibility must be engineered, not assumed.

4.10 Treat Reshoring as a Talent Strategy

Companies often underestimate the talent development opportunity presented by reshoring. Building domestic manufacturing capability requires not just labor but expertise—particularly in precision engineering, quality control, and advanced automation.

Best-in-class firms are:

Partnering with vocational institutions and universities
Offering internal apprenticeships and certification programs
Designing work environments that attract younger, tech-oriented workers

Reshoring becomes not just a production strategy, but a workforce modernization platform.

4.11 Establish Performance Metrics Specific to Reshoring Goals

Generic KPIs like cost-per-unit or OEE (Overall Equipment Effectiveness) fail to capture the full impact of reshoring. High-performing firms establish dedicated reshoring metrics, such as:

Time-to-market improvements
Lead time variability reductions
Risk-adjusted margin gain
Inventory turnover changes
ESG impact per product line

These metrics enable more accurate ROI tracking, improve transparency with stakeholders, and support iterative optimization post-implementation.

5. Common Pitfalls to Avoid

While the strategic case for reshoring is increasingly robust, the pathway to successful execution is littered with avoidable missteps. Organizations that approach reshoring without sufficient rigor often experience implementation delays, cost overruns, or outcomes that fail to meet strategic expectations. Below are the most prevalent failure modes observed across industries.

5.1 Treating Reshoring as a Marketing Initiative

Perhaps the most common miscalculation is framing reshoring as a brand exercise rather than an operational transformation. While “Made in USA” carries reputational value, those gains are quickly eroded if reshored operations fail to deliver on quality, consistency, or cost competitiveness.

When reshoring is executed primarily for optics—without addressing deeper supply chain design, workforce readiness, or cost structure—it often creates more reputational risk than reward.

5.2 Underestimating Ramp-Up Complexity

Reshoring is not plug-and-play. It often involves capital-intensive facility upgrades, lengthy permitting processes, and significant hiring and training cycles. Firms that underestimate this complexity frequently experience delayed timelines, missed forecasts, and strained internal resources.

This is particularly true in regulated industries such as pharmaceuticals or electronics, where compliance protocols require additional certification and validation steps that can extend launch timelines by months or even years.

5.3 Assuming Labor Will Materialize Without Investment

The prevailing narrative around reshoring often underplays the talent gap in the domestic manufacturing sector. In many regions, particularly rural or deindustrialized areas, there is a shortage of workers with experience in modern manufacturing environments—especially those involving automation, digital systems, or precision operations.

Firms that do not invest early in workforce development partnerships, internal training programs, or compensation structures designed to attract skilled labor often struggle to scale or sustain reshored operations.

5.4 Failing to Map the Extended Supply Base

Relocating a final assembly operation is only part of the picture. Many reshoring efforts falter because companies fail to account for Tier 2 and Tier 3 suppliers that remain offshore. This results in fragmented value chains where the benefits of proximity and control are diluted by persistent dependencies on foreign components.

Best practice requires a comprehensive supply chain audit, followed by localized supplier development or nearshoring strategies that maintain proximity without compromising risk mitigation.

5.5 Optimizing for Cost Instead of Strategic Fit

In an effort to replicate offshore cost structures, some firms attempt to minimize reshoring investments through aggressive cost-cutting—often at the expense of process reliability, facility capability, or system flexibility.

This approach typically backfires, resulting in quality lapses, underperforming throughput, or bottlenecks that erode any initial cost savings. Successful reshoring focuses not on cost replication, but on strategic alignment—ensuring that domestic operations are designed to excel in flexibility, speed, and responsiveness.

5.6 Neglecting Change Management and Cultural Integration

Reshoring requires more than logistical execution—it demands organizational adaptation. Firms that ignore the cultural, procedural, and leadership shifts needed to support domestic production frequently encounter internal resistance, inconsistent process adherence, and degraded morale.

This is especially true when reshoring displaces longstanding offshore teams or disrupts legacy workflows. Without clear communication, cross-functional alignment, and leadership sponsorship, reshoring efforts often stall midstream.

5.7 Overcommitting Without Optionality

Finally, some firms make the mistake of reshoring at full scale without contingency planning. Whether due to executive overconfidence, political pressure, or sunk cost bias, these organizations prematurely commit to single-site domestic production without modularity or fallback options.

In a volatile environment, such rigidity can be strategically dangerous. Smart firms preserve optionality through dual-sourcing, pilot runs, and modular site development—enabling iteration and adaptation rather than all-or-nothing transitions.
6. Reshoring Readiness Checklist

For companies contemplating a reshoring initiative, success depends less on enthusiasm and more on structured preparedness. Based on analysis of successful (and failed) reshoring efforts, the following checklist serves as a diagnostic tool for determining organizational readiness and alignment.

Use it to pressure-test your assumptions and identify areas requiring deeper strategic work before capital is committed.

6. Reshoring Readiness Checklist