What do we know about manufacturing reshoring?

Abstract

Purpose The aim of this paper is to analyze and classify research that has been conducted on manufacturing reshoring, i.e. the decision to bring back to the home country production activities earlier offshored, independently of the governance mode (insourcing vs outsourcing). Consequently, the paper also aims at providing avenues for future research and to highlight the distinct value of studying manufacturing reshoring either per se or in combination with other constructs of the international business tradition. Design/methodology/approach A set of 57 carefully selected articles on manufacturing reshoring published in international journals or books indexed on Scopus in the past 10 years was systematically analyzed based on the “5Ws and 1H” (who-what-where-when-why and how) set of questions. Findings The authors’ work shows a certain convergence among authors regarding what reshoring is and what its key features and motivations are. In contrast, other related aspects, such as the decision-making and implementation processes, are comparatively less understood. Research limitations/implications As manufacturing reshoring is a “recent” topic, for some of its aspects, only exploratory research is available to date, limiting the authors’ possibility to either characterize it in a more exhaustive way or highlight well-established patterns. Practical implications The paper demonstrates that studying reshoring will indeed contribute to expanding our understanding of internationalization processes and strategies in general and of production internationalization specifically. While past studies have argued that the learning derived from international experience would permit firms to overcome their unfamiliarity with new business environments, reshoring might show that this outcome is not necessarily certain. Rather, firms might not be able to overcome obstacles because of internationalization or they might realize that attempting to do so is not desirable, e.g. because of excessive risk or changes in the firm’s strategic priorities. Social implications From a societal point of view, the present research underlines that reshoring can be part of that re-industrialization policy that many Western countries include in their economic agenda – yet, its impact on employment should not be overestimated, as often relocation is only in regard to some product lines. At the same time, there might be an intimate relationship between reshoring and the various forms of technological innovations applied to manufacturing – which has become popularly labeled as “Industry 4.0”. Originality/value Literature reviews proposed until now usually paid almost exclusive attention to motivations driving this phenomenon. This paper offers a broader and more comprehensive examination of the extant knowledge of manufacturing reshoring and identifies the main unresolved issues and knowledge gaps, which future research should investigate.

Backshoring and nearshoring: An overview

“…As these strategies have been traditionally followed by firms from developed countries moving to less developed ones (with lower production costs and, especially, lower wages), there is abundant empirical evidence describing and analysing the processes undertaken by firms from very different countries and industries (Bardhan & Kroll, ; Bramucci, ; Gray, Skowronski, Esenduran, & Rungtusanatham, ; Lewin & Peeters, ; Martone, ; Rilla & Squicciarini, ). The early 2000s gave rise to the innovation known as backshoring, whereby some firms decided to reverse existing relocations and began, totally or partially, to move their plants and some management services back to their home country (Barbieri, Ciabuschi, Fratocchi, & Vignoli, ; Gray et al, ; Stanczyk, Cataldo, Blome, & Busse, ; Vanchan, Mulhall, & Bryson, ). Concretely, Kinkel and Maloca (, pp.…”

“…Perhaps the most evident example is the South of Italy, a potential destination for nearshoring (NetConsulting, ) because of its relative lower wages (e.g., about 30% below of those of Northern Italy), the availability of a skilled workforce (i.e., about 22,000 graduates in technical domains every year) and number of technical firms (i.e., about 20,000 ICT firms). Nevertheless, manufacturing activities in developed countries still suffer from high‐cost differentials relative to typical destination countries (Ancarani et al, ) which need to be solved through digital transformation and the so‐called “Industry 4.0” (Barbieri et al, ).…”

“…In previous sections, we have shown how offshoring and backshoring have shaped manufacturing activities and the spatial distribution of production worldwide and how, in some ways, backshoring has been considered as a policy strategy for economic crisis recovery (Barbieri et al, ). Although empirical evidence suggests that backshoring is still a limited phenomenon (and nearshoring is even scarcer), it is reasonable to assume that both backshoring and nearshoring will relatively soon increase significantly.…”

“…Despite the huge potential implications of backshoring and nearshoring, up to now public policies have not played a major role in shaping firms' decisions to backshore (Lee, ), which suggests that further efforts are still needed in developed countries (Albertoni et al, ). Among them, it is important to highlight how public opinion in developed countries is increasingly ready to pay a premium prize for locally manufactured products (Barbieri et al, ), a circumstance partially explained by the role of “Made in” effect as one of major determinants for backshoring decisions.…”

Decarbonising Maritime Transport

“…The technology could shift production closer to the consumer allowing for faster prototyping and customisation, which eliminates the need for tools, moulding machines and various assembly steps. 3D printing reduces the cost of demand uncertainty and allows for more production flexibility potentially leading to a reduction of demand for spare parts from overseas suppliers (Barbieri et al, 2017). While the current application of 3D printing is limited to spare parts and certain medical applications, the range of goods is constantly expanding towards more complex industrial components and consumer items.…”