A network perspective on the reshoring process: The relevance of the home- and the host-country contexts (original) (raw)
Related papers
BRQ Business Research Quarterly, 2019
After a steady growth in global offshoring activities, it appears now a marked flow in the opposite direction with both a partial and full reversal of offshoring decisions. Research on reshoring put less stresses on the operation of dispersed facilities of an intra-firm network manufacturing. The purpose of this paper is to address the relevance of strategic capabilities for the operation of international manufacturing to the reshoring decision. The paper reports on retrospective studies of three European based companies, which have had recent reshoring experience. We adopt qualitative research using a case-based methodology that includes multiple in-depth interviews based on three companies. The study demonstrates that managerial challenges in the operation of dispersed facilities have played an important role in the reshoring decision. The findings allow understanding how the capability dimensions, 'thriftiness' and 'learning' being the most important, connect with the phenomenon of reshoring.
THE ROLE OF INTERDEPENDENCE IN OFFSHORING
In the search for new sources of competitive advantage, companies are replacing a traditionally collocated in-house production with globally configured value networks, which consist of diverse and interdependent affiliates. The purpose of this paper is to investigate the role of interdependence in the process of global dispersion of work. The paper employs a qualitative methodology, which draws on a case study of a Danish company. The case company embarked on a large scale offshore outsourcing initiative in 2005. Since then, the company's operations set-up went through several major re-configurations. The study indicates that the company's offshoring patterns cannot be attributed exclusively to either management decisions or exogenous factors. Among other explanations, interdependence plays a significant role in determining the trajectories and outcomes of offshoring. On this basis, a number of recommendations for managers are developed.
Journal of …, 2010
In the largest sense, global strategy amounts to (1) the optimal disaggregation or slicing of the firm's value chain into as many constituent pieces as organizationally and economically feasible, followed by (2) decisions as how each slice should be allocated geographically ('offshoring') and organizationally ('outsourcing'). Offshoring and outsourcing are treated as strategies that need to be simultaneously analysed, where just 'core' segments of the value chain are retained in-house, while others are optimally dispersed geographically, as well as dispersed over allies and contractors. This amounts to a reconsideration of the nature of the firm that captures the dynamic changes in global configuration and a reconsideration of what constitutes 'core' activities that need to be retained internally. The article proposes a new research agenda that searches for each firm's optimal degree of disaggregation and global dispersion given that further scattering of value chain activities entail benefits as well as increased complexity and costs.
The Strategic Nexus of Offshoring and Outsourcing Decisions
One important effect of the increasing integration of the world economy is the rising importance of possibilities to offshore and outsource value-creating activities. In many industries, firms are able to disaggregate their value chains into smaller parts. This process allows for a less path-dependent approach to the firm’s ideal location profile (through offshoring and relocation) and control strategies (through outsourcing). This article argues that optimal decisions regarding individual processes recognize the linkages of these processes with the firm’s entire value chain. The article explores the magnitude, sequence and dynamics of interdependent decisions regarding the location and control of various parts of the value chain. By using case illustrations from the mobile handset and financial services industries, this article provides a novel perspective on the disintegration, mobility and re-integration of value chain activities in a global context.
International Manufacturing Network : operational issues and reshoring
2018
This dissertation addresses the topic of international manufacturing strategy, especially a focus on operational issues of network manufacturing and reshoring of manufacturing facilities. Manufacturing network is defined as a group of wholly-owned facilities of a firm, as opposed to supply chain management where there are plants belongs to other companies. Research on the importance of the operation of manufacturing networks can help to gain insights into how to manage activities in dispersed facilities and how the network-related advantages are achieved through the network management. Research has validated the contribution of network coordination to attain competitive advantages of international manufacturing. It has also suggested that strategic objectives, such as competitive priorities of manufacturing in globally disperse facilities, are highly important for setting and implementing manufacturing network strategy. However, the impact of such strategic objective/s on network management is still unexplored, Palabras clave: Fabricación global; redes de fabricación; coordinación de red; prioridades competitivas; relocalización; capacidades de red; estudio de caso de investigación; investigación cualitativa.
Tijdschrift voor economische en sociale geografie, 2010
The current massive offshoring of manufacturing represents a significant relocation of employment. Therefore it constitutes an interesting phenomenon from the perspectives of economic geography, geopolitical policy and international small business management. In this qualitative study, we investigate the offshoring decisions in 10 Norwegian small and middle-sized enterprises (SMEs) that have established manufacturing capabilities in low cost countries. The focus lies on their initial motivation for offshoring production, selection of location, choice of entry mode, evolution of foreign production capabilities, and finally, foreign market sales initiation and development. By analysing the findings in this study from different theoretical perspectives we conclude that combining Dunning's eclectic paradigm with behavioural internationalisation models offers valuable insight in the initiation and organisation of offshore manufacturing facilities among small firms. However, to fully understand the external influence on offshore location decisions among SMEs we should incorporate business network theories and theories from economic and social geography.
Journal of Manufacturing Technology Management
PurposeThis paper aims to offer a long-term systematic picture of the evolution of manufacturing offshoring (in terms of intensity, geography and drivers) highlighting the changes in the surrounding context and the resulting transitions points (“points in time”) that have shaped its development path.Design/methodology/approachThree statistical tools were adopted on a dataset of 644 cases. First, the authors resorted to multiple structural change tests to identify the transition points. Second, the authors explored offshoring geography by conducting a network analysis. Finally, the authors adopted gravity models to shed light on offshoring drivers.FindingsResults highlight three offshoring phases: expansion (2002–2006), reconsideration (2007–2009) and rationalization (2010 onwards). During the first phase, characterized by economic growth, firms were mainly interested in economic savings; offshoring to low-cost countries was the prevailing location strategy. Subsequently, during the ...
Viewing engineering offshoring in a network perspective: Challenges and key patterns
The 18th International Annual EurOMA Conference 18, 2018
Companies are increasingly engaging with global engineering networks through offshoring of product development activities. This presents companies with many new challenges. The global engineering network (GEN) framework has been created to address the increasing dispersion of engineering activities across geographical and ownership boundaries. By using the GEN framework in studying engineering offshoring issues, the challenges faced by companies can be explained as a mismatch between the required capabilities and the companies' ability to deliver these capabilities. This paper provides new theoretical insight into both engineering offshoring and global engineering networks theories by extending the GEN framework.
Reshoring: Does home country matter?
Journal of Purchasing and Supply Management, 2019
The role of the country, either home or host, in firms' internationalization has been widely analysed in the International Business field. A large number of studies have shown that home country shapes many aspects of firms' internationalization processes such as investment decisions, location selections, and entry modes. However, these studies mainly focus on the firms' foreign expansion. Little is known about the relations between firms' home country and reshoring processes. This paper aims to analyse whether and how reshoring projects are different across countries, thereby further exploring the underlying home country-related factors contributing to reshoring peculiarities. By using a dataset including 529 cross-industry reshoring projects developed by companies headquartered in five countries (i.e., US, Germany, UK, France, and Italy), the study shows that these projects differ in terms of industry, entry mode, firm size and motivations. Thus, reshoring turns out to be a phenomenon where each country has its own peculiarities. The research further sheds light on the possible institutional, cultural/cognitive and industry/resource-related factors underlying these specificities. This study contributes to both reshoring and international business literature by highlighting how reshoring differs across countries. It also provides policy and managerial implications, at a time when several governments are considering the economic and employment potential of this phenomenon.
What do we know about manufacturing reshoring?
Journal of Global Operations and Strategic Sourcing, 2018
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 d...