Impacts of Reshoring on the Organization and Its Supply Chain Network

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Given the difference in attitudes towards social and environmental factors such as child labor and carbon consumption in different geographical regions, it is likely that with the redesign of the supply network relevant processes can be controlled and monitored more closely in order to meet contextual legal and social thresholds and expectations. In recent years, news broke out that Primark and Apple were dealing with outsourcers who opt for use of sweatshops and child labor in their production process in China and Bangladesh (BBC, 2014; Guardian, 2008), giving them bad publicity.

Discussion and Implications:

The objective of this study was to evaluate possible impacts of re-shoring on supply chains. The paper first provided discussion of outsourcing and offshoring strategies to lay a foundation for the introduction of reshoring and its implications. Typical drivers such as hidden costs, political stability, and flexibility were then discussed before moving on to analyze factors influencing the impact of re-shoring on supply chain activities including product characteristics, cost drivers, and future trends. Analysis of the likely impacts was then provided and findings showed effects on the supply chain resulting from re-shoring include redesign of the supply chain network, flexibility and control, and changes in supply chain risk and disruptions. This was further supported by examples from business press, academic journals, and other literature relating to location decision-making.

One limitation of this paper might be found in the empirical evidence regarding re-shoring and its impact, this is due to the limited literature available regarding this topic. Further more, for simplicity and convenience purposes, the analysis of the impact is based on the assumption that proper assessment of the factors influencing the effects of supply-chain has been carried out and that the results proved that re-shoring is indeed an efficient decision for the organization. In practice, accurate assessment of these factors can prove to be difficult and hence lead to different outcomes.

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