A review of manufacturing re-shoring in the context of customer-focused postponement strategies

Abstract

For more than half a century, offshoring has been a trend among many industry sectors and all company sizes which are aiming to expand business by reducing costs and accessing foreign markets. However, in recent years, the evidence indicates that offshoring strategies may no longer continue to provide the same level of benefits for organizations’ manufacturing activities. Companies have begun to establish a better understanding of the total risk/benefit-balance and base their supplier decisions on strategic supply chain issue rather than simply relying on cost analysis. Hence, it is evident that there are tendencies to reverse the offshoring strategy and re-shoring manufacturing activities back to the home country. Despite the significance of this phenomenon to manufacturing, the supply chain literature has focused predominantly on the macro economic analysis, while the literature on the operational aspects of re-shoring is relatively sparse. The first half of this article aims to address the first research question which identifies the operational motivations behind the re-shoring phenomenon. This is done by studying the current literature available on the context of re-shoring. The second half of the article determines the feasibility of a manufacturing strategy, ‘postponement’, as a possible solution for the companies to adjust and cope with the volatile customer demands and new generation of technologies towards more responsive production and customizable products.