Reshoring Decisions for Adjusting Supply Chains in a Changing World: A Case Study from the Apparel Industry.

Pourya Pourhejazy,Alison Ashby

doi:10.3390/ijerph18094873

Abstract

Global conditions for manufacturing are evolving rapidly and the myopic financial factors that once made overseas locations attractive for offshoring are now in favor of revising it. Besides, the COVID-19 pandemic has highlighted the need for restoring the previously offshored competencies. As a strategic decision, reshoring requires a balance of short- and long-term financial and non-financial considerations. This study extends the reshoring literature by exploring the underpinnings of the decision. For this purpose, the extended fuzzy Decision-Making Trial and Evaluation Laboratory (DEMATEL) is used to study the interrelationship among the decision criteria and explore the sequential effect of the prominent criteria on reshoring decisions. Data from the UK apparel industry is used as a baseline to provide insights for other industry situations. Findings are supportive of the supply process complexity as the prominent considerations with the highest potential impact on the financial criterion. Along with supply process complexity, environmental sustainability appears to have had the highest influence on cost-efficiency as the major driver of past offshoring decisions. Overall, the research findings provide insights for deeper analysis of the manufacturing location decisions for a globalized setting.

Highlights

This study aims to extend the limited body of reshoring literature to explore supply chain operational, competitive, and sustainability criteria within a broader organizational and inter-organizational context
It is observed that the power of suppliers, product quality management, environmental sustainability, social responsibility, as well as uncertainty criteria have the highest potential to increase the supply process complexity
Supply process complexity and the issues pertinent to environmental sustainability impose the highest influence on cost-efficiency, should be observed when revising the offshoring decisions

Summary

Introduction

Myopic offshoring decisions—the offshoring sins—include relocating the wrong activities, selecting the wrong vendors, putting poor contracts in place, lack of consideration of problems that may occur at the supplier, e.g., strikes, loss of control over the offshored activities, overlooking the hidden costs, and failing to plan an exit strategy [7] These collected risks, issues, and implementation challenges are encouraging companies to bring part or all of production/services and supply bases back home or in closer proximity [5,8]; the reversion of a previous offshoring decision is typically framed as reshoring.

Objectives

Results

Conclusion