Rising oil costs are very likely to cause manufacturers and distributors to move their facilities closer to population centers as a cost-cutting measure. Proctor and Gamble has announced that they are developing strategies to do exactly this, using some of their Chinese facilities as a test-bed. The company has already noted that this is only the first step in moving toward a more decentralized and customer-market-oriented manufacturing and distribution location strategy.
Likewise, Wal-Mart recently announced a new strategy for sourcing food products for its mega centers. As part of a larger initiative to broaden its offerings, the retailer is moving toward buying more of its produce directly in local markets and from local farmers. In addition to providing more local flavor to the food offerings, this also gains the company a host of cost and product-safety advantages.
In sum, some measurable advantages have evolved for locating more manufacturing and distribution in close proximity to the direct zones of consumption. Even so, it's important to note the sensitivity of these decisions to environmental and economic changes. Certainly, we did not foresee the circumstances that would push for on-shoring even a short five years ago. Given the compelling dynamics outlined above, it is important to remember that times change, and remaining flexible is the best strategy.