Post-Brexit back-shoring strategies: what UK manufacturing companies could learn from the past?

Abstract

The manufacturing sector in the UK is currently undergoing a significant supply chain transformation and managers are re-evaluating supply chain location decisions to minimise the disruptions caused by Brexit. This entails manufacturing offshoring and back-shoring once again being considered as strategic decisions and companies ought to make informed choices with respect to where they source or manufacture their products. This paper aims to contribute to an improved understanding of the back-shoring phenomenon in the UK. Eight case studies of back-shoring have been analysed and compared using a theoretically informed framework.The results shows that back-shoring can stem from both misjudgements of previous offshoring decisions as well as changes in the demand pattern at the home country. Unlike offshoring decisions being mainly cost-oriented, strategic shift aimed at increasing the value perceived by the customer has a pivotal role in the back-shoring decision. Furthermore, skill shortage is the main barrier for the implementation of back-shoring strategies in the UK and requires companies' attention prior to its repatriation.

Geopolitical disruptions and the manufacturing location decision in multinational company supply chains: a Delphi study on Brexit

“…The UK exiting the single market is expected to reduce the attractiveness of the UK as an export platform due to an increase in cost from tariff and non-tariff barriers when exporting to the rest of the EU (Dhingra et al , 2016a, b). Brexit is also expected to increase the SC complexity of MNCs and impact the coordination costs between their headquarters and local branches (Moradlou et al , 2020). Moreover, the uncertainty surrounding the future trade arrangements between the UK and the EU has already adversely affected the level of FDI in the UK (Moradlou et al , 2020).…”

“…Brexit is also expected to increase the SC complexity of MNCs and impact the coordination costs between their headquarters and local branches (Moradlou et al , 2020). Moreover, the uncertainty surrounding the future trade arrangements between the UK and the EU has already adversely affected the level of FDI in the UK (Moradlou et al , 2020). Therefore, the magnitude of the economic decline is largely dependent on the trade negotiation between the UK and the EU, and the UK's post-Brexit economic relations (Dhingra et al , 2018; Dhingra, 2019).…”

Setbacks, interruptions and turnarounds in the internationalization process: a bibliometric and literature review of de-internationalization

“…For Halse, Nujen and Solli-Saether ( 2019 ), automation is more of a means for achieving the goal of backshoring than a reason in itself. As for the institutional changes in the home country, Ciabuschi et al ( 2019 ) indicate that home country risk should be part of backshoring considerations, while Moradlou et al ( 2021 ) focus on changes to the demand pattern in the home country. Other authors emphasize the relevance of production and professional networks in the home country for the decision to bring some activities back home (Baraldi et al 2018 ; Halse et al 2019 ).…”

“…The nonlinear nature of the phenomenon means that internationalization models do not take into account setbacks, interruptions or turnarounds (Fletcher 2001 ; Vissak 2010 ). Setbacks can result from back-shoring/re-shoring (relocating to the country of origin) or near-shoring (relocating to a nearby country) (e.g., Fratocchi et al 2015 ; Merino et al 2021 ; Moradlou et al 2021 ), or from leaving specific countries or regions for other reasons (Sandberg et al 2019 ). Interruptions can occur because the company reaches a limit where internationalization ceases (Nummela Vissak and Francioni 2020 ) for a period of time or permanently.…”

Information security implications of using NLP in IT outsourcing: a Diffusion of Innovation theory perspective

“…Similarly, several other reasons behind ITO may exist depending on the business priorities or prevailing circumstances. For example, the COVID-19 pandemic, China-US trade-war and UK Brexit have inclined businesses to seek opportunities through ITO (Baldwin and Tomiura 2020;Moradlou et al 2021;Quaglietta and Alvord 2020;Wang et al 2020;Zalnieriute and Churches 2021).…”