Implementing reshoring: insights and principles from a longitudinal case study in the e-bike industry

Abstract

In spite of the growing body of literature available on the revision of prior production offshoring decisions, how reshoring is actually implemented remains largely unexplored. This paper responds to this gap by analysing the case of FIVE, an Italian electric bike (e-bike) company that has insourced and relocated to the home country the production activities it had originally outsourced to a Chinese manufacturer. The research combines a design science approach with a longitudinal, single case study method to gather both theoretical insights and practical managerial advice on how to conduct the reshoring implementation. The study captures the dynamic nature of the implementation process, showing how its elements evolve over time. Organizational learning emerges as a driving factor of reshoring, and each of the implementation stages seems to be characterized by the development of a specific organizational process, which provides the know-how required for the tasks to be performed at that particular stage. From a practical perspective, the study develops five reshoring implementation principles and a three-stage implementation process that offer valuable guidelines especially to managers of SMEs who wish to undertake the reshoring decision.

Return to USA: Impact of Reshoring Announcements and Reshoring Risks on Market Valuation

“…insourced reshoring) is "the most drastic two-dimensional movement" (p. 109). As supported by some recent case research, combined reshoring and insourcing decisions are more often associated with fluctuating costs, quality problems, and capacity constraints, suggesting that such reshoring initiatives are more risky and often require more time (sometimes multiple years) to complete (Barbieri et al 2022). Rather than a one-shot shift from "buy" to "make," research suggests that changes in governance mode should evolve slowly alongside strategic relocation (Barbieri et al 2022, Chen et al 2022.…”

“…Firms attempting insource reshoring will likely need additional expertise in setting up and running a new plant locally, which will incur higher production setup costs (Whitten et al 2010), including the costs for candidate searches, personnel replacement, in-house learning, and information transfer, leading to higher uncertainty (Whitten et al 2010, Patrick Van den et al 2014). 6 In particular, reshoring often involves major supply chain restructuring, while insourcing requires the development of specific production processes (Barbieri et al, 2022). Carrying out both plans simultaneously may incur extra risks to firms' operations.…”

“…An OTO reshoring strategy helps maintain firms' sourcing practice and strategic flexibility, preserve their expertise in sourcing and supply chain coordination, reduce the cost of assets, and lower administrative and overhead burdens (Benstead et al 2017, McIvor andBals 2021). Because it does not require expertise in setting up and running new plants, OTO also reduces the firm's operational uncertainty (Barbieri et al 2022). In short, OTO is a reshoring strategy that involves lower levels of capital investment and operational disruptions than other strategies, reducing firm risk.…”

Understanding the manufacturing reshoring decision-making content through the lens of the Eclectic Paradigm: a systematic literature review

“…[97] Supply networks X X [5], [9], [11], [13], [14], [19], [26], [27], [37], [47], [58], [61], [62], [63], [67], [67], [70], [77], [80], [81], [90] Sustainable supply chain X X [5], [7], [26], [27], [31], [40], [41], [47], [54], [58], [60], [64], [66], [70], [81], [82], [84], [88] Technology agglomeration X X [5], [7], [50], [51], [59], [60], [67], [77], [78] Source: Authors' own work The use of hybrid decision factors is a consequence of researchers trying to describe how factors have influenced a manufacturing reshoring decision. The use of hybrid factors can also be used t...…”