The decision on manufacturing location: Motivations behind the decision to reshore.

摘要

Reshoring, or the reversal of offshoring decisions, is not a new phenomenon. However, the motivations behind these decisions are unclear. This study investigated the motivations behind manufacturing location decisions and added to the work of Ellram, Tate, and Petersen (2013) who explored the factors involved in companies' decisions on where to locate manufacturing. This study asked two research questions. The first research question asked which of the 29 motivational factors, identified by Ellram et al., do manufacturers consider the most important when making manufacturing relocation decisions? The survey data suggested that labor cost was the most important factor when considering manufacturing relocation decisions. The second research question asked which of the 29 motivational factors do manufacturers consider the riskiest when making manufacturing relocation decisions? The survey data suggested that currency stability was the factor considered to provide the most risk. This study also developed two propositions. The first proposed that the dimension of cost, consisting of the sub-criteria switching cost, labor cost, and the stability of labor costs is the most important dimension to manufacturers when making manufacturing location decisions. The survey supported this proposition as the dimension of cost ranked number one among the dimensions. The second proposition postulated that companies consider the dimension of country risk to have the highest level of risk when making manufacturing location decisions. The survey did not support this proposition as input/product ranked the number one risky dimension. In fact, country risk ranked sixth in the perceived risk category, with a relative weight of just over one third of input/product.