Friendshoring: Rethinking global partnerships!
- Erik Esly
- May 9
- 3 min. reading time
Updated: Sept. 18
Shipping, with its numerous merchant ships and warships, was of decisive importance for the strength and superiority of the Greeks and Romans.
This complex system, consisting of building materials, captains, sailors, merchants and port facilities, was extremely sophisticated and was a decisive factor for strength, stability and growth.
Even in ancient times, the following was true: "A chain is only as stable as its weakest link." This principle, which was of crucial importance back then, applies all the more today and can be transferred one-to-one to our modern, global supply chains."
Is friendshoring a possible alternative strategy for strengthening the resilience of today's supply chains and what is it actually?
Time and again, today's sophisticated supply chains are disrupted, as the case of Apple impressively demonstrates, and how companies can benefit and overcome challenges by strategically realigning their supply chains.
The technology giant, which has long been heavily dependent on production facilities in China, recently decided to relocate part of its production to India in order to reduce its dependence on China and focus on more stable markets.
However, despite initial hopes, the new Indian production facilities are facing considerable quality problems, prompting Apple to relocate some production back to China.
Given these challenges, it is clear how complex and dynamic the implementation of friendshoring (also known as allyshoring) can be. While relocating to India is a way to diversify risks in a tense geopolitical situation, the problems highlight the need for careful decisions when selecting partner countries.
Friendshoring refers to the strategic relocation of supply chains to countries with stable political and economic conditions. This approach is particularly relevant as it offers a response to the challenges posed by geopolitical tensions, such as the trade conflict between the USA and China or the situation in Ukraine, as well as economic uncertainties. The term allyshoring is often used synonymously to emphasize the business focus on friendly and trustworthy countries.
This method involves the targeted relocation of procurement and production processes to politically stable and economically trustworthy countries. The aim is to minimize risks, increase efficiency and build strategic partnerships.
Why is friendshoring a smart choice and what are the benefits?
The targeted selection of stable partner countries significantly reduces the risk of supply chain disruptions. In addition, considerable cost savings can be realized. The relocation of production facilities from China to Vietnam, for example, has enabled many companies to significantly reduce both production costs and delivery times.
A classic example is a car manufacturer that relocates its suppliers from unstable regions such as some countries in Eastern Europe to Canada. Canada offers political stability, well-developed infrastructures and is globally connected through close trade relations.
Another example is provided by the fashion industry. Some fashion companies have started to relocate their production from Asia to Portugal and Spain. These countries are closer to the main sales markets in Europe and at the same time offer high standards in terms of labor law and environmental regulations. This not only ensures a more steady flow of goods, but also strengthens the brand image through sustainable and fair production conditions.
Friendshoring is also relevant in the technology sector. Consider a software company that used to outsource to countries with more favorable but unstable conditions. Now it relies on cooperation in countries such as Estonia or Ireland, which not only offer a stable political environment, but also have access to highly qualified specialists and advanced digital infrastructures. This results in fewer project execution risks and promotes innovation.
By friendshoring, companies can not only minimize the risk of supply chain disruptions, but also strengthen their market position. They benefit from more reliable partners, stable production conditions and good political relationships. Overall, this means a more stable, efficient and resilient supply chain in the long term that is better able to cope with modern challenges.
Gain the ability to act. Reduce risks
In view of the ongoing geopolitical developments, the importance of friendshoring will continue to grow. Experts are forecasting an annual increase
of 15 % in the coming years.
Between geopolitical risk and pressure to be efficient, friendshoring offers a pragmatic path to greater capacity to act: partner countries with stable framework conditions, suppliers with reliable quality, contracts and KPIs that ensure controllability.
The difference lies in the approach: first data, then decisions; first pilot, then scaling; first governance, then speed. This allows you to reduce dependencies, improve service levels and achieve sustainability goals faster - without any operational surprises. The decisive factor is success monitoring that makes progress visible and enables corrections to be made at an early stage.
ERIKESLY Advisory & Consulting is your partner for the next step towards a resilient, efficiently managed supply chain - from analysis to implementation.