Moving mountains of metal: Managing the complexities of reshoring and near-shoring 

In recent years, the impact of geopolitics has seen countless businesses diversify their production risks by changing where they make their goods – with countries in South Asia and Southeast Asia among those reaping the rewards. 

However, says Prakash Sriraman, General Manager of Sales at FM Logistic in India, relocating a production line as part of a reshoring or near-shoring strategy involves challenges that many businesses underestimate. For a start, he points out, moving machinery across national or state borders typically involves navigating a web of customs and tax regulations, as well as factoring in the physical risks of transit.

“From start to finish, it’s a massive exercise. Even before moving anything from A to B, businesses must decide where they will manufacture. Among the many considerations, they must determine the costs of leasing or building a new factory, of assembling their infrastructure once it arrives at the location, and of course recruiting and training new employees,” Sriraman says. “All these challenges incur a high level of costs.”

The pre-production work does not end there. Starting afresh means firms need to build a new supplier network, integrate vendors into their enterprise resource planning (ERP) software, map new transportation routes and, after that, commence production, though likely at a reduced volume initially. Crucially, he says, firms must also ensure they avoid what is called “failure at the edges” – for instance, where a single missing part or permit can halt an entire assembly line for days or weeks.

“And there are considerations around trade such as tariffs, currency fluctuations and trade rules,” he says. “These are just some of the biggest challenges that come from relocating.”

In short, there is much to consider, and laying the foundation for success starts with a well-orchestrated, end-to-end strategy. That is where using a reliable logistics provider makes the difference.

Take the most obvious part of moving a production line: Getting the machinery from the original factory to the new one. If businesses are to mitigate the paperwork and physical risks involved, they must get the correct documentation in place, and must ensure key specialised steps are taken to prepare that machinery – such as draining oil or other fluids from units, securing high-value parts against vibration and buying comprehensive insurance.

“Additionally, there must be the use of rigorous, detailed pre-dispatch checklists to ensure every component is physically checked and matched against the bill of materials,” Sriraman says. “Success also requires using specialised packaging that is fitted by dedicated teams who also know how to maximise container fill ratios. And their logistics provider should offer real-time tracking so the client can see where their shipment is at all times – as we do with our Control Tower solution.”

The right logistics provider, therefore, should act as a single point of contact between the manufacturer, the transporter and government officials – with all permits and documents verified in advance. In that way, the machinery will be moved safely and legally, will arrive on time using optimised routes, and with any specialised handling equipment necessary, such as forklifts and cranes, already in place. That will help to overcome three key obstacles. 

“One of those is customs delays, and that’s generally because of a paperwork error or due to a tariff policy change or new regulations,” Sriraman says. “That’s why we prefer digital documents over using manual paperwork, because this means we can track the document and see its approval status – and even go for pre-clearance before the cargo reaches its destination so it doesn’t get held up but is cleared on a priority basis.”

Port congestion is another common issue that can be resolved by using an off-peak arrival time to offload the cargo or to divert to another port. The third issue is the weather, “and while we can’t control that, of course, we can predict any weather impacts and build in a contingency route if needed.”

That gets the machinery to the factory on time and in good order. But, says Sriraman, this is just the first of the two major steps. Once inside, it is vital to optimise internal movement at the factory, where parts might move through a maze of sub-assembly lines or even go to external subcontractors before returning for final assembly.

By using a warehouse management system (WMS) or an RFID-tracked bin system, firms can optimise the movement of parts and enjoy significant productivity gains. At one factory, Sriraman says, FM Logistic recommended the use of hand pallet units and simple conveyor belts to move freshly heated tiles. That increased output threefold and made the facility safer.

“With these simple changes in the infrastructure, they increased output from 700 units per hour to 2,500 units,” Sriraman says. 

The other consideration is to minimise equipment downtime once the production line is running. By deploying pre-assembled service kits for rapid on-site repairs and by using a centralised Control Tower to get that all-important real-time visibility, supply chain teams can collaborate immediately to resolve disruptions and source emergency parts long before production is forced to stop.

At the same time, the logistics provider can set up quality inspection points directly into critical production areas where defects are most likely, and can implement a logging and tagging system that quarantines defective parts before they are evaluated by a quality control team as reworkable, recyclable or scrap. That keeps the production line running smoothly and minimises the chance of line stoppages.

Ultimately, says Sriraman, shifting a production line across a state border or halfway around the world is a major undertaking with numerous complexities that businesses often do not fully appreciate.

“Which is why when we handle this type of movement, we don’t treat it as a regular logistics exercise – we view it from a supply chain project angle,” he says. “In that way, we ensure that the move happens in a systematic manner with a master schedule that means the right tools are in place across the entire process.”

Ultimately, says Sriraman, although relocating heavy industrial machinery does require navigating a labyrinth of regulatory, financial and operational hurdles, it should never amount to a leap in the dark.

“By partnering with the right logistics provider that can deliver meticulous end-to-end planning, specialised physical handling and real-time visibility, businesses can safeguard against costly delays and get on with what they do best – producing what their customers want in their new manufacturing hub,” he says.