Right-shoring: Making resilient offshoring and reshoring decisions

Competitive priorities and capabilities: high-cost country case survey

Purpose

Globalization and the importance of emerging markets have increased the pressure of high-cost manufacturing locations to sustain operations. However, there are still some countries in which manufacturing is prospering despite high costs (like Germany, Sweden and Switzerland). This study examines seven competitive priorities through 24 different capabilities, using a case survey of four manufacturing companies located in Sweden. This study aims to develop a contemporary understanding from vital priorities and capabilities.

Design/methodology/approach

A case survey was conducted in four different-sized manufacturing companies in Sweden during the autumn of 2018. In total, the survey attracted 89 responses. Respondents were mainly middle managers and other management team members.

Findings

In general, companies assess the importance of manufacturing capabilities higher than performance and improvement. The authors’ analysis shows that quality priority through product and process capabilities is ranked highest in terms of importance, performance and improvement. In addition, delivery capability shows a similarity with quality. At the other end, being lowest ranked are typically different flexibility and advertising capabilities. This study demonstrates with correlation analysis that most often capabilities have a positive correlation in terms of their importance, performance and improvement needs. Some capabilities show potential correlations across importance, performance and improvement.

Research limitations/implications

This research is limited to one high-cost environment and to four companies within that environment. Further research should examine the impact of the pandemic era on manufacturing priorities and capabilities.

Originality/value

In general, case surveys have relatively rarely been used in management studies. This research offers an alternative and deeper perspective from high-cost country manufacturing, as the responses are from numerous persons in management positions.

Paradoxical tensions impacting small-series production implementation in high-cost contexts: insights from the EU apparel industry

Purpose

While localized small-series production is a significant opportunity, various tensions challenge implementation in high-cost contexts. This paper explores how managers view and respond to different tensions in small-series production implementation by adopting a paradox-based perspective.

Design/methodology/approach

The paper presents a multiple case study addressing small-series production within EU's apparel industry, as key context to address managerial awareness, and responses to tensions regarding location and supply network configuration decisions. Seven cases were selected for variation in customization and implementation (early/established), ownership, location and company size, to identity commonalities.

Findings

The study highlights performing tensions related to sustainability, and risk, in addition to confirming traditional goal-related tensions predominantly impacting small volume production. With on-demand/custom production, tensions include costs in conflict with process scale, and several process-related tensions (flexibility, expansion/development, risk management). Identified multidimensional responses do not include location or structural decisions, instead focusing on synthesis, through product-operations efficiency, knowledge development and process innovation and supply chain collaboration. Temporal separation is found with customization, including reducing product/process complexity short-term with enhancing process development, which suggests latent learning tensions and limited awareness.

Research limitations/implications

Future research should address the extent to which tensions can be resolved or remain paradoxical, as well as dynamic decision-making and latent tensions.

Originality/value

The paper shows how paradox theory facilitates a deeper understanding of complex network configuration decisions, including reshoring/localization. The findings identify organizing tensions/elements and elaborate upon performing/performing-organizing tensions suggested with small-series production, location decisions and supply chain management.

A hybrid fuzzy-AHP-TOPSIS model for evaluation of manufacturing relocation decisions

Manufacturing relocation decisions are complex because they involve combinations of location modes like offshoring or reshoring, and governance modes like insourcing or outsourcing. Furthermore, the uncertainty involved in the decision-making process makes it challenging to reach a right-shoring decision. This study presents a hybrid fuzzy-AHP-TOPSIS model to support generic relocation decisions. Industry experts were involved in a pairwise comparison of the competitive priorities’ decision criteria. A meta-synthesis of empirical studies is used to generate theoretical relocation scenarios. The presented hybrid model is used to rank the relocation scenarios in order to identify the most pertinent alternative. The resiliency of the solution is presented through a sensitivity analysis. The results indicate that the proposed hybrid model can simultaneously handle all the main relocation options involving governance modes. Based on the input data in this study, the competitive priorities criteria quality, time and cost are shown to have a strong impact, whereas the sustainability criterion has a weak impact on the choice of relocation option. The research presented in this paper contributes to the research field of manufacturing relocation by demonstrating the suitability of the hybrid fuzzy-AHP-TOPSIS model for relocation decisions and the resilience of the results. Furthermore, the research contributes to practice by providing managers with a generic relocation decision-support model that is capable of simultaneously handling and evaluating various relocation alternatives.

An Evaluation of Critical Capabilities and Improvement Areas for Competitive Manufacturing in a Developed-Country Environment

This research evaluates the critical capabilities and improvement areas for competitive manufacturing in a developed-country environment. A multiple-case-study approach is applied, consisting of three manufacturing firms located in Sweden. The case study combines both quantitative and qualitative evaluations of the critical capabilities found in the extant literature. The research reveals fifteen critical capabilities and sixteen improvement areas for competitive manufacturing in a developed-country environment. The results show that the firms develop capabilities in a cumulative manner, starting with cost and quality, continuing with time and flexibility, and finally trying to improve innovation and sustainability. To develop competitive manufacturing operations in developed counties, it is therefore vital to improve capabilities related to time, flexibility, innovation, or sustainability. Irrespective of the targeted capabilities, they must contribute to cost-efficient operations and high quality must always be maintained. The efforts to develop capabilities related to innovation and sustainability may be expensive in the short term, however they can provide better cumulative results and competitiveness in the long term.

Back-shoring vs near-shoring: a comparative exploratory study in the footwear industry

After decades of off-shoring strategies, companies are often critically re-evaluating their earlier location decisions; in doing so, sometimes they implement the so-called relocation of second degree. Among them, back-shoring (i.e., relocation to the home country) and near-shoring (relocation to the home region) are two of the alternatives attracting growing interest from scholars. This paper aims to shed new light on the variables influencing the choice made between these two alternatives. As requested in the extant literature, a contingency approach is adopted, focusing attention on the footwear industry. Given the exploratory nature of the paper, evidence from 41 back-shoring and near-shoring strategies are analysed, comparing data from Spanish and Italian companies. Collected data are adapted to test hypotheses concerning three sets of variables: firms’ characteristics, motivations for the second degree relocation and its barriers. Collected data show that firm’s size directly influences the chosen alternative since larger companies prefer to near-shore instead of back-shore. When considering motivations, while the “made in” effect does not influence the firm’s choice, availability of skilled contractors and/or government aids induces companies to relocate to the home country instead of the home region. Finally, companies fearing encountering barriers, in terms of skilled contractors’ availability and/or (re-)development of internal manufacturing competences, will prefer the back-shoring rather than the near-shoring option. The study is focused on two countries (Spain and Italy) where the manufacturing sector (and the footwear industry within it) is still relevant to the local economy. Findings cannot be generalized to countries/industries where the local industry has been totally dismantled, without a previous in-depth analysis. The findings obtained offer managers useful insights on the elements that should be carefully evaluated when considering back- and near-shore alternatives. Additionally, valuable insights are provided for policy makers that plan to design industrial policies supporting back-reshoring policy initiatives. To the best of our knowledge, this is the first paper in the extant literature addressing variables influencing the choice between back- and near-shoring alternatives.