Environmental sustainability and reshoring in the automotive industry: a multiple cases study

Abstract

Reshoring – the reversal of offshoring strategies – referring to a firm’s decision to bring previously offshored manufacturing activities back or close to the home country has become a key theme in the industrial location literature. This thesis investigates the interdependence between reshoring, environmental sustainability and supply chain reconfiguration through a multiple case study in the automotive suppliers sector. The purpose is to explore the perception of environmental sustainability, to investigate reshoring decision-making and to analyse the need for supply chain reconfiguration in the context of environmental sustainability. Research is far from reaching an in-depth understanding of how reshoring decision-making takes place concerning environmental sustainability particularly in the automotive supplier sector. The thesis gathers qualitative data from 17 interviews with experienced managers from nine internationally-active, mainly Tier-1 automotive suppliers. The level of influence of environmental sustainability on reshoring decisions is not near to the top but on the rise. Issues such as cost and quality, efficiency of operations and qualified employees are more important than environmental sustainability to strengthen competitive advantage. The conventional idea of reshoring does not apply very well to Tier-1 automotive suppliers, since a key concern is bringing manufacturing sites closer to the OEM or to other suppliers in the supply chain regardless of the supplier’s home country. The findings from the study are used to develop models and frameworks of both reshoring and the relationship between reshoring and environmental sustainability. This contribution to knowledge is used to develop propositions for further research. The findings are linked to management theories such as Transaction Cost Economics and the Resource-Based View to deepen the contribution to theory. Some of the models and frameworks, such as the drivers and barriers for reshoring and environmental sustainability, together with the decision-making process and decision criteria for supply chain reconfiguration, have been developed so they can be used by practitioners to assist them with reshoring and supply chain management activities.