For more than three decades, outsourcing followed a simple logic, moving work to lower-cost locations to reduce expenses and gain efficiency, writes Material Handling & Logistics (July 24, 2026). That model delivered real benefits, but the business environment has changed. Organizations now face pressure to innovate faster, strengthen resilience, protect worker safety, and meet increasingly complex regulations.
Instead of focusing solely on low-cost offshore outsourcing, organizations are adopting to a best-shore strategy, an approach that evaluates the nature of the work and places it in the location that delivers the greatest overall business value. The best-shore model recognizes that cost matters, but so do collaboration, speed, resilience, compliance, talent availability, and operational continuity.
Supply chain disruption, cybersecurity threats, geopolitical uncertainty, workforce shortages, regulatory change, and rising customer expectations have created new challenges that traditional outsourcing models were not designed to address. The lowest-cost location is now not always the lowest-cost solution.
A manufacturing plant cannot afford prolonged downtime because a critical engineering issue must wait until another region wakes up. A logistics operation cannot delay responding to a cybersecurity incident due to communication barriers.
Under the best-shore approach, organizations leverage a combination of offshore, nearshore, and onshore resources, assigning responsibilities based on business requirements rather than geography alone. Best-shore models incorporate three complementary delivery layers.
Offshore: Scale and Cost Efficiency Offshore delivery remains an essential component of global operations. Countries with large technical talent pools offer access to skilled professionals at competitive costs. Offshore teams often provide the scale necessary to support large transformation programs, application development initiatives, engineering projects, testing activities, data management, and managed services.
Nearshore: Speed and Collaboration Nearshore delivery helps bridge the gap between cost efficiency and operational responsiveness by locating teams in similar time zones and cultural environments. Teams can collaborate during the same business day, participate in real-time meetings, respond quickly to changing priorities, and engage more directly with business stakeholders.
Onshore: Governance and Business Alignment Certain activities benefit from being located close to the business itself. Executive engagement, regulatory compliance, stakeholder management, strategic planning, safety oversight, and customer relationships often require local presence and a deep understanding of business context.
Recent years have demonstrated how vulnerable organizations can become when they depend too heavily on a single geography, supplier, or operating model. A diversified best-shore model helps reduce concentration risk.
Classroom discussion questions:
- Summarize the differences between best-shoring and off-shoring.
- Provide an example of a firm that has best-shored.
Alongside Mac mini production, Apple is ramping up output of advanced AI servers at the Houston site, an initiative that began in 2025. The expansion reflects Apple’s growing investment in AI infrastructure, an area that has become central to both consumer devices and cloud services.
Prof. Jon Jackson is Associate Professor of OM at Providence College. He created AI classroom exercises–appearing in our Instructors Resource Manual– for every chapter of the text.
A common fear associated with automation is job loss. Sharpie’s story shows an alternative path. Rather than cutting staff, Newell retrained workers for higher-skill roles such as robotics support, maintenance, and technical troubleshooting. These new roles led to average wages increasing by nearly 50%.
Unlike Apple, Samsung doesn’t rely on China for smartphone production. The South Korean giant closed its last phone factory in China in 2019. The vast majority of its smartphone manufacturing takes place in South Korea, Vietnam, India and Brazil.
For more than a decade, US manufacturing has achieved growth in employment, output, the number of manufacturing establishments, and investment to expand or construct new facilities. This strong growth was driven by a desire to derisk supply chains and establish facilities closer to US customers. Increased supply chain volatility in recent years has led organizations to shift their supply chain strategy from cost minimization to a focus on balancing cost with resilience.
Reshoring 
like many of the most valuable U.S. companies, isn’t a major manufacturer. It designs products, writes software and creates chip blueprints, but outsources much of its production and markets the results.
Supply-chain relocation has benefited investment in Mexico, where there has been an unexpected increase in the demand for industrial warehouses. Foreign direct investment (FDI) is now over $18 billion and has been vital to technological advances and has strengthened the trade relationship with the U.S., Mexico’s leading trading partner in manufacturing.
Manufacturing has always been an integral part of American life. Paul Revere opened a foundry that produced bells and cannons following his famous midnight ride. Ford’s assembly line made cars affordable to the masses. And U.S. industrial might helped win World War II, when nearly half of private-sector employees worked in factories. That portion plunged after the war, thanks to automation and U.S. companies seeking lower costs overseas.
