The popular press has begun to pay attention to the phenomenon of reshoring. The task of supply chain management researchers with regard to this phenomenon should be to clarify what it is; to explore whether it is really a new phenomenon; and, paraphrasing (Simon, 1967; p. 1), to conduct research into the reshoring phenomenon so as to contribute not only to the science but also to the practice of reshoring. This essay is a starting point for our efforts in that direction. We make a number of informed assertions about reshoring-assertions that are juxtaposed in relevant literature and that aim to (a) define what reshoring is and is not; (b) explain why the reshoring phenomenon should not be examined in isolation but rather as a reversion of a prior offshoring decision; (c) describe how the reshoring phenomenon might evolve as societies, worldwide, place increasing emphasis on the environmental impact of business decisions; and (d) articulate a plausible scenario in which reshoring eventually hampers employment in Western nations. We hope these assertions will, in turn, jumpstart an intellectual discourse, through scientific research, into the what, how, when, where, and why of the reshoring phenomenon.
Small to medium‐sized enterprises (SMEs) are moving their manufacturing operations from low‐cost countries back to high‐cost countries, reversing earlier offshoring decisions. These reshoring decisions cannot be completely explained by changing location‐related costs. To better understand why SMEs are reshoring, we evaluate nine product‐line decisions – six to reshore and three to remain offshore – and codify four empirical observations. We then integrate these observations with relevant literature to develop and analyze a system dynamics model of SMEs' offshoring and reshoring decisions. Synthesizing the above, we articulate propositions regarding SMEs’ reshoring decisions. We conclude by discussing these decisions through the lens of the heuristic decision‐making literature, providing managerial and policy implications.
The popular press has begun to pay attention to the phenomenon of reshoring. The task of supply chain management researchers with regard to this phenomenon should be to clarify what it is; to explore whether it is really a new phenomenon; and, paraphrasing (Simon, 1967; p. 1), to conduct research into the reshoring phenomenon so as to contribute not only to the science but also to the practice of reshoring. This essay is a starting point for our efforts in that direction. We make a number of informed assertions about reshoring-assertions that are juxtaposed in relevant literature and that aim to (a) define what reshoring is and is not; (b) explain why the reshoring phenomenon should not be examined in isolation but rather as a reversion of a prior offshoring decision; (c) describe how the reshoring phenomenon might evolve as societies, worldwide, place increasing emphasis on the environmental impact of business decisions; and (d) articulate a plausible scenario in which reshoring eventually hampers employment in Western nations. We hope these assertions will, in turn, jumpstart an intellectual discourse, through scientific research, into the what, how, when, where, and why of the reshoring phenomenon.
Firms are increasingly sourcing innovation from their supply chain partners. Meanwhile, supply chains have evolved into complex networks, which complicates the role that supply chain partners play in innovation and financial performance of firms. Previous research has mainly focused on the direct effect of innovation on a firm's financial performance, overlooking the innovativeness and complexity of supply networks. In this research, we focus on a firm's supply base, defined as the first tier of a supply network, and investigate the relationship between the intensity of R&D within the supply base and the financial performance of the focal firm. We also examine the moderating role of three aspects of supply base complexity-Number of suppliers, differentiation, and interrelationships among suppliers. Utilizing secondary data from Bloomberg and Compustat, we find that the R&D intensity of a firm's supply base is positively associated with the firm's financial performance. Further, all three aspects of supply base complexity negatively moderate this relationship. These findings make important contributions to the literature by establishing a direct, positive relationship between supply base R&D and firm financial performance, which is attenuated by complexities within the supply base.
While opportunism has been a focus of transaction cost economics, perceived opportunism, where one party is perceived to be acting opportunistically when there is no opportunistic intent, can also lead to increased transaction costs in an exchange. In this study, consistent with forms of opportunism observed in our context of manufacturing outsourcing, we examine two different forms of perceived opportunism-perceived poaching and shirking. As narratives of the hidden costs of outsourcing discuss concerns of suppliers in emerging economies engaging in poaching and shirking, we examine if the level of economic development where a supplier operates affects perceptions of supplier poaching and shirking and also examine if the supplier's competitive priorities moderate those perceptions. To empirically test these relationships, we combine archival data of location characteristics with a dyadic primary dataset that captures perceived supplier opportunism, self-reported supplier opportunism,
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