Reshoring manufacturing: Challenges and opportunities 

Reshoring – the process of bringing manufacturing operations back to domestic soil has become a hot topic in the industry. With global supply chain disruptions, geopolitical uncertainties, and an increased focus on self-reliance, more manufacturers are considering reshoring as a viable strategy to boost efficiency, reduce risk, and regain control. 

According to Hexagon’s 2025 America’s State of Manufacturing Report, while reshoring presents significant opportunities, it also comes with a unique set of challenges. Labor shortages, infrastructure gaps, and economic pressures often hinder businesses from making reshoring a reality. But manufacturers who can tackle these obstacles head-on stand to gain a competitive edge in the marketplace. 

This blog explores the biggest hurdles in reshoring and outlines actionable steps to overcome them, setting your business up for long-term success. 

Why reshoring makes sense

Before we dig into the challenges, it’s important to understand why so many companies are exploring reshoring in the first place. The key benefits driving reshoring efforts include the following:

• Supply chain resilience: By reducing reliance on overseas suppliers, manufacturers can avoid delays, high shipping costs, and geopolitical risks. 
• Improved quality control: Domestic production enables better oversight and more rigorous quality standards, aligning closely with customer expectations. 
• Faster lead times: Manufacturing closer to end markets reduces production and delivery timelines, improving customer satisfaction. 
• Economic incentives: Several governments are offering tax breaks, grants, and other incentives to encourage reshoring, sweetening the deal for manufacturers. 

While the benefits are evident, making reshoring a reality is easier said than done. 

Challenges manufacturers face when reshoring

For businesses considering reshoring, certain roadblocks can make the transition costly and complex. Here are the top challenges identified in Hexagon’s research and real-world insights. 

1. Labour shortages

One of the most significant challenges to reshoring is the lack of skilled labor. Manufacturing roles often require technical expertise in areas like CNC programming, machine maintenance, and inspection processes. However, the industry is facing a growing gap in available talent due to factors like retirements, fewer people entering trade careers, and insufficient training opportunities.  

The report highlights how labor shortages not only limit capacity but also reduce a manufacturer’s ability to adapt to advanced production technologies required for reshoring success. 

How to address it:

• Partner with educational institutions: Collaborate with trade schools and technical colleges to establish apprenticeship programs and pipelines of skilled labor. 
• Invest in workforce reskilling: Modernise training programs to prepare existing employees for reshoring-specific challenges, such as operating advanced machinery. 
• Make manufacturing appealing: Elevate the industry’s reputation with outreach campaigns showcasing career opportunities and success stories. 

2. Infrastructure gaps

Successful reshoring requires robust infrastructure, including factories, transportation networks, and advanced technology. Unfortunately, the U.S. manufacturing sector has faced decades of underinvestment in these areas, leaving gaps that make reshoring costly or logistically impractical. 

For instance, outdated facilities may not support large-scale production, while inefficient transportation systems can hinder the smooth movement of goods. These bottlenecks often discourage businesses from shifting operations domestically.  

How to address it:

• Upgrade existing facilities: Invest in retrofitting or renovating manufacturing plants with energy-efficient systems and flexible layouts that can adapt to varying production needs. 
• Leverage government incentives: Tap into local, state, or federal programs that provide tax breaks or grants for infrastructure improvements. 
• Adopt compact and modular systems: Utilise advanced technologies that allow manufacturers to scale production based on space and resource availability. 

3. Higher production costs

Manufacturing in the U.S. often involves higher labor and overhead costs compared to overseas operations. These challenges directly impact pricing competitiveness, especially in cost-sensitive industries. 

While reshoring may increase production costs initially, manufacturers who focus on efficiency gains can mitigate these expenses over time. 

How to address it:

• Focus on process automation: Invest in automation technologies that reduce manual labor needs and improve efficiency. For example, inspection systems supported by AI can cut down quality checks by half without compromising accuracy. 
• Streamline supply chains: By producing locally, manufacturers gain more control over their supply chain, eliminating many hidden costs like tariffs, delays, and currency fluctuations. 
• Adopt lean manufacturing: Reduce waste and optimise production flows to improve profitability despite higher labor costs. 

4. Changing OEM relationships

For tier suppliers, reshoring may disrupt existing relationships with overseas OEMs. However, the trend toward local partnerships is growing as more OEMs seek suppliers who can deliver quicker turnarounds and more reliable quality. 

How to address it:

• Develop proximity partnerships: Build relationships with nearby OEMs to strengthen collaborative opportunities. 
• Highlight the advantages: Showcase how reshoring can improve quality and reduce lead times, making your business a high-value partner. 

5. Resistance to change

Change always comes with friction, and reshoring is no exception. Internal teams and external stakeholders may question the ROI, integration challenges, or operational disruptions that reshoring could bring. 

How to address it:

• Create a clear plan: Develop a detailed reshoring strategy with milestones, investment justifications, and expected outcomes. Communicate this plan to all stakeholders. 
• Showcase pilot successes: Start with smaller-scale reshoring projects to prove feasibility before scaling efforts across your operations. 
• Engage teams early: Include employees in planning discussions to build buy-in and reduce resistance. 

Opportunities to lead the future of reshoring

Despite the challenges, reshoring presents a wealth of opportunities for manufacturers willing to adapt. Businesses that successfully bring operations back to domestic soil often see significant long-term rewards, including improved operational control, heightened customer trust, and sustainable growth. 

Reshoring can also position manufacturers at the forefront of innovation. Technologies like modular inspection systems, predictive analytics, and adaptive CNC programming tools are empowering smaller facilities to deliver the same efficiencies as large-scale plants with fewer resources and less disruption. 

Manufacturers that prioritise workforce skilling, infrastructure upgrades, and process optimisations are more likely to thrive as reshoring aligns with the industry’s future trajectory. 

Prepare your business for reshoring success

Is your manufacturing operation ready to overcome these challenges and take advantage of reshoring’s opportunities? Hexagon’s 2025 America’s State of Manufacturing Report dives deeper into the barriers and strategies for reshoring, offering a roadmap for manufacturers looking to modernise, adapt, and lead in an increasingly competitive marketplace. 

📥 Download the full report here to gain actionable insights and start planning your reshoring success today.