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Comparing offshoring and backshoring : The role of manufacturing site location factors and their impact on post-relocation performance

Johansson, Malin LU and Olhager, Jan LU orcid (2018) In International Journal of Production Economics 205. p.37-46
Abstract

The global nature of businesses has increased the geographical dispersion of operations and has made the location decision an important strategic perspective for manufacturing firms. The consensus view is that three major plant location factors must be kept in mind: (1) access to low-cost manufacturing, (2) proximity to market, and (3) access to development competences. Two options for changing the global manufacturing footprint are offshoring and backshoring. This research has analysed the role and relevance of these manufacturing site location factors as drivers for offshoring and backshoring decisions and has investigated these factors’ relationship with operational performance. The study used survey data drawn from Swedish... (More)

The global nature of businesses has increased the geographical dispersion of operations and has made the location decision an important strategic perspective for manufacturing firms. The consensus view is that three major plant location factors must be kept in mind: (1) access to low-cost manufacturing, (2) proximity to market, and (3) access to development competences. Two options for changing the global manufacturing footprint are offshoring and backshoring. This research has analysed the role and relevance of these manufacturing site location factors as drivers for offshoring and backshoring decisions and has investigated these factors’ relationship with operational performance. The study used survey data drawn from Swedish manufacturing plants, including 133 offshoring projects and 99 backshoring projects. The survey instrument used the same set of questions for both relocation directions (for drivers as well as performance benefits), which allowed us to analyse each direction separately as well as to make comparisons between offshoring and backshoring. We applied a theory-testing approach in the study, in that we tested how the three major location factors related to offshoring and backshoring based on confirmatory factor analysis and regression analyses. The results have verified that these three major location factors are relevant for both manufacturing offshoring and backshoring; the results also indicated significant differences in how these factors influence relocation decisions for offshoring and backshoring as well as how they affect performance.

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author
and
organization
publishing date
type
Contribution to journal
publication status
published
subject
keywords
Facility location, Global operations, Manufacturing relocation, Survey research
in
International Journal of Production Economics
volume
205
pages
10 pages
publisher
Elsevier
external identifiers
  • scopus:85053453800
ISSN
0925-5273
DOI
10.1016/j.ijpe.2018.08.027
language
English
LU publication?
yes
id
7b89a69c-689b-4050-bdb4-cbe40ccfee25
date added to LUP
2018-10-09 08:11:02
date last changed
2021-10-06 04:28:02
@article{7b89a69c-689b-4050-bdb4-cbe40ccfee25,
  abstract     = {<p>The global nature of businesses has increased the geographical dispersion of operations and has made the location decision an important strategic perspective for manufacturing firms. The consensus view is that three major plant location factors must be kept in mind: (1) access to low-cost manufacturing, (2) proximity to market, and (3) access to development competences. Two options for changing the global manufacturing footprint are offshoring and backshoring. This research has analysed the role and relevance of these manufacturing site location factors as drivers for offshoring and backshoring decisions and has investigated these factors’ relationship with operational performance. The study used survey data drawn from Swedish manufacturing plants, including 133 offshoring projects and 99 backshoring projects. The survey instrument used the same set of questions for both relocation directions (for drivers as well as performance benefits), which allowed us to analyse each direction separately as well as to make comparisons between offshoring and backshoring. We applied a theory-testing approach in the study, in that we tested how the three major location factors related to offshoring and backshoring based on confirmatory factor analysis and regression analyses. The results have verified that these three major location factors are relevant for both manufacturing offshoring and backshoring; the results also indicated significant differences in how these factors influence relocation decisions for offshoring and backshoring as well as how they affect performance.</p>},
  author       = {Johansson, Malin and Olhager, Jan},
  issn         = {0925-5273},
  language     = {eng},
  pages        = {37--46},
  publisher    = {Elsevier},
  series       = {International Journal of Production Economics},
  title        = {Comparing offshoring and backshoring : The role of manufacturing site location factors and their impact on post-relocation performance},
  url          = {http://dx.doi.org/10.1016/j.ijpe.2018.08.027},
  doi          = {10.1016/j.ijpe.2018.08.027},
  volume       = {205},
  year         = {2018},
}