Proactive Relocation Decision-Making in a Multinational Manufacturing Network

Abstract

Recent years have been demanding for manufacturing companies with a global footprint – the constant need to evaluate and re-evaluate manufacturing networks and sourcing due to ongoing crises e.g., coronavirus shutdowns, changing customs tariffs, economic sanctions, inflation, availability issues, and war. A decade ago, everything was more stable in corporate manufacturing networks, and capacity allocation was merely based on cost consideration, competencies, and demand of different regions. Due to the changes mentioned, developed nation companies have started reshoring manufacturing operations increasingly back to developed countries; this is mostly due to hedging uncertainty and assuring availability and deliveries. This research analyses one steel industry case study of a corporate manufacturing network and shows what kind of factors their location decisions are based on in the current environment. The case also illustrates the ongoing process of manufacturing location and relocation with make or buy consideration. The process is implemented in stages, and if triggers are reached, the assessment is completed in a more comprehensive manner. In the end, we propose Information Technology (IT) advances and solutions for this environment, where the assessment period could have better responsivity, quality, and shorter lead time. Furthermore, we propose further changes and research on what decision factors should be included in the proactive relocation decision-making process.