Reshoring Is Real — But the Smart Money Is on Diversification and AI

Reshoring has been a major trend in American manufacturing over the past five years, and the headline numbers back it up.

But the same data tells a more complicated story — one where reshoring and global diversification are running in parallel, not in opposition.

Diversification Is Not the Opposite of Reshoring

The report found that 81% of leaders want to increase U.S. manufacturing and 59% want to grow North American production — yet 49% still plan to diversify their global operations. Those goals coexist within single sourcing strategies:

"The United States ranks as the top preferred sourcing region at 89%, but Canada (47%), Mexico (39%), and the European Union (36%) all feature prominently in the same strategies."

Geopolitics is driving the hedging. The share of leaders who see geopolitical instability as a significant factor in long-term supply chain strategy has climbed to 71%. The workforce picture adds pressure from the other direction: a projected 3.8 million skilled-worker gap threatens the next decade of growth, which makes single-region concentration a risky bet.

The report's stated aim captures the shift:

"The goal is to keep building resiliency into sourcing decisions."

AI Moves From Pilot to Operating Layer

A diversified network is harder to run than a concentrated one — and that is precisely where the survey shows AI moving in.

"A diversified, multi-region network generates far more decisions—more suppliers to weigh, more routes to model, more scenarios to run—than any procurement team can process manually."

The adoption numbers are striking:

"95% of leaders now say implementing AI is vital to their company's future success, and 97% say it is already embedded across core manufacturing and supply chain workflows."

The returns are becoming quantifiable. Per the report, citing McKinsey's analysis:

"McKinsey's analysis puts AI-driven logistics cost reductions in the 15–20% range and inventory reductions anywhere from 10% to 35%, largely through better demand forecasting and real-time management."

Notably, leaders frame automation as a workforce multiplier, not a substitute — the report describes AI and automation as helping address workforce shortages "while being clear-eyed that these tools augment specialized expertise rather than replace it."

The Hidden Tax on Engineering Time

The report also quantifies a cost most engineering teams will recognize: procurement overhead eating design capacity.

"83% of engineers now spend four or more hours a week on procurement-related workflows, and 93% of leaders say productivity climbs when that administrative load is offloaded."

That is engineering talent spent chasing parts instead of designing them. The report's respondents point to digital tooling as the relief valve:

"97% of leaders in our survey called digital manufacturing platforms essential to production."

Where the Expansion Demand Is Concentrated

The push to expand U.S. production is not evenly distributed across sectors:

"The demand is concentrated exactly where you would expect: among the leaders we surveyed, 90% of EV companies, 87% in climate tech, 82% in MedTech, and 69% in robotics are moving to expand U.S. production."

The takeaway from the data is not that reshoring is fading — it is that reshoring alone is not a strategy. As the report puts it:

"The demand for resilience is outrunning the tools most teams have to deliver it."

And its conclusion sets the bar for who comes out ahead:

"The winners will be companies that design for flexibility, treat AI as core infrastructure, and build globally intelligent supply networks that let them keep making things no matter what the world throws at them."