Strategic Reshoring: A Literature Review
1 Mar, 2021
When offshoring was motivated by cost-savings and access to new markets, and when these initiatives perform poorly, companies are more likely to relocate them. Management, logistical, and operational costs have, in some cases, made offshoring unprofitable. The cost of coordinating, monitoring, and communication between parent companies and distant affiliates can be greater than initially envisioned. Early in the offshoring wave, companies copied the behavior of their competitors, thinking primarily of the “out of factory costs” and not the full cost of production For many firms, capturing the benefits of offshoring are tied to firm-specific resources.