What does Backshoring mean?

Reshoring is the process of returning the production and manufacturing of goods back to the company’s original country. Reshoring is also known as onshoring, inshoring, or backshoring.

What are the benefits of Backshoring?

A number of benefits are also associated with backshoring, including higher quality, improved innovation by keeping manufacturing close to R&D, reduced inventory and transportation costs, improved coordination of operations, higher productivity, being closer to customers, and having access to skills and knowledge ( …

What is offshoring in manufacturing?

Production offshoring, also known as physical restructuring, of established products involves relocation of physical manufacturing processes overseas, usually to a lower-cost destination or one with fewer regulatory restrictions.

What are the two types of offshoring?

They are mainly of two types: Product Offshoring: When the main product is manufactured elsewhere and is imported for sale in the domestic market. Service Offshoring: When the product is manufactured in the domestic market, whereas services like customer service, IT, marketing, human resources are outsourced.

What industries are reshoring?

The top three re-shoring industries electrical equipment/appliance, transportation equipment and manufacturing, and apparel have all seen a rise in sales (reshoring research study).

What is Backshoring business?

Consequently in the forthcoming sections of the paper, based on Dachs and Zanker’s (2015) proposition, backshoring is understood as a relocation of firm-owned value-adding activities from abroad to the home country of the firm.

What does Rightshoring mean?

Right-shoring refers to locating a business’s manufacturing operations in localities and countries that provide the best combination of cost and efficiency. The advantages of offshoring are eroding, which is leading to more companies bringing manufacturing operations closer to home.

Why do companies offshore manufacturing?

The main motivating factor for companies to move their production offshore is to save money. No surprise here. By outsourcing assemblies and other expensive manufacturing processes, you can dramatically cut the costs of your products and pass those savings on to your customers, increase your margins, or both.

What are examples of offshoring?

However, offshoring is when a company sends in-house jobs to be performed in another country. An example of offshoring is for a United States-based company to produce their goods in Mexico. Both of offshoring and outsourcing ultimately save companies money but they reduce costs in very different ways.

Why is Apple reshoring?

COVID-19 and Beyond Apple reported component shortages and shipping delays as well as postponed the release of the iPhone 12. Some commentators believe that the devastating events of 2020 will be enough to kill off global supply chains and trigger mass reshoring.

What is the literature on manufacturing backshoring?

Stentoft, J., Olhager, J., Heikkilä, J. and Thoms, L. (2016), “Manufacturing backshoring: a systematic literature review”, Operations Management Research, Vol. 9 Nos 3/4, pp. 53-61. Strom, M. and Levy, M. (2013), Going Beyond Reshoring to Right-Shoring, PwC, London.

Are hightech firms backshoring more frequently?

From a theoretical angle, the critique of the “error-induced backshoring mode” (e.g. Fratocchi et al., 2014, Fratocchi et al., 2016) needs to be questioned. This paper contributes further to theory. It is shown and explained that hightech firms are backshoring more frequently, as superior products and quality are inevitable for these firms.

What is backshoring or reshoring?

This reverse movement, that is, moving manufacturing back, is now referred to as backshoring ( Kinkel, 2012, Kinkel, 2014, Canham and Hamilton, 2013 ), or reshoring ( Gray et al., 2013, Ellram et al., 2013, Tate, 2014, Fratocchi et al., 2016 ).

How important is production relocation in backshoring?

Production close to or in the market as well as time-to-market are also significantly more important in backshoring contexts when comparing the “backshorers” and the “offshorers”. However, the plants that have relocated production in both directions have a neutral view on these two factors.