Reshoring before and during the COVID-19 pandemic in an advanced economy
Olhager, Jan LU
and Harfeldt-Berg, Magnus
LU
(2024)
In International Journal of Physical Distribution and Logistics Management
55(11).
p.1-22
- Abstract
Purpose: The purpose is to investigate how the coronavirus disease 2019 (COVID-19) pandemic changed relocation behavior in an advanced economy. We compare manufacturing relocations before and during the pandemic to identify differences and similarities over time and between offshoring and backshoring. Design/methodology/approach: We use an exploratory longitudinal trend survey approach with data from two surveys, the first before the pandemic, 2010–2015, and the second during the pandemic, 2020–2022. Both rounds were targeted to the entire population of Swedish manufacturing plants with 50 or more employees. We captured the same set of data for offshoring and backshoring projects in both surveys. Findings: The pandemic did not stop... (More)
Purpose: The purpose is to investigate how the coronavirus disease 2019 (COVID-19) pandemic changed relocation behavior in an advanced economy. We compare manufacturing relocations before and during the pandemic to identify differences and similarities over time and between offshoring and backshoring. Design/methodology/approach: We use an exploratory longitudinal trend survey approach with data from two surveys, the first before the pandemic, 2010–2015, and the second during the pandemic, 2020–2022. Both rounds were targeted to the entire population of Swedish manufacturing plants with 50 or more employees. We captured the same set of data for offshoring and backshoring projects in both surveys. Findings: The pandemic did not stop manufacturing relocations. The extent of offshoring decreased, but the extent of backshoring increased. Labor costs remained a key driver for offshoring, but a trade-off versus lead time, flexibility and risk were observed, suggesting a tension between labor cost and a strive for creating shorter supply chains for offshoring. Lead time, logistics costs, market proximity and risk formed a new backshoring construct, with an emphasis on short supply chains, and that increased significantly in importance. At the same time, the importance of quality decreased, creating a need to balance quality against the pursuit of short supply chains for backshoring. Thus, local supply chains seem to be a desired outcome for any manufacturing relocation, suggesting a move towards a multi-local supply chain setup for the global manufacturing footprint. Originality/value: This is the first longitudinal survey study that captures offshoring as well as backshoring before and during the pandemic. The results offer unique insights into the COVID-19-induced impacts on manufacturing relocations as the same total population was sampled before and after the pandemic, and it provides empirical evidence that neither offshoring nor backshoring are “steady-state” concepts but changes over time.
(Less)
- author
- Olhager, Jan
LU
and Harfeldt-Berg, Magnus
LU
- organization
- publishing date
- 2024
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- Backshoring, Global versus local supply chains, Longitudinal survey, Manufacturing relocation, Offshoring
- in
- International Journal of Physical Distribution and Logistics Management
- volume
- 55
- issue
- 11
- pages
- 22 pages
- publisher
- Emerald Group Publishing Limited
- external identifiers
-
- scopus:85213694436
- ISSN
- 0960-0035
- DOI
- 10.1108/IJPDLM-11-2023-0440
- language
- English
- LU publication?
- yes
- id
- b5294de0-33d3-4767-b68a-c790bad7f98f
- date added to LUP
- 2025-02-25 12:30:00
- date last changed
- 2025-04-04 14:53:47
@article{b5294de0-33d3-4767-b68a-c790bad7f98f,
abstract = {{<p>Purpose: The purpose is to investigate how the coronavirus disease 2019 (COVID-19) pandemic changed relocation behavior in an advanced economy. We compare manufacturing relocations before and during the pandemic to identify differences and similarities over time and between offshoring and backshoring. Design/methodology/approach: We use an exploratory longitudinal trend survey approach with data from two surveys, the first before the pandemic, 2010–2015, and the second during the pandemic, 2020–2022. Both rounds were targeted to the entire population of Swedish manufacturing plants with 50 or more employees. We captured the same set of data for offshoring and backshoring projects in both surveys. Findings: The pandemic did not stop manufacturing relocations. The extent of offshoring decreased, but the extent of backshoring increased. Labor costs remained a key driver for offshoring, but a trade-off versus lead time, flexibility and risk were observed, suggesting a tension between labor cost and a strive for creating shorter supply chains for offshoring. Lead time, logistics costs, market proximity and risk formed a new backshoring construct, with an emphasis on short supply chains, and that increased significantly in importance. At the same time, the importance of quality decreased, creating a need to balance quality against the pursuit of short supply chains for backshoring. Thus, local supply chains seem to be a desired outcome for any manufacturing relocation, suggesting a move towards a multi-local supply chain setup for the global manufacturing footprint. Originality/value: This is the first longitudinal survey study that captures offshoring as well as backshoring before and during the pandemic. The results offer unique insights into the COVID-19-induced impacts on manufacturing relocations as the same total population was sampled before and after the pandemic, and it provides empirical evidence that neither offshoring nor backshoring are “steady-state” concepts but changes over time.</p>}},
author = {{Olhager, Jan and Harfeldt-Berg, Magnus}},
issn = {{0960-0035}},
keywords = {{Backshoring; Global versus local supply chains; Longitudinal survey; Manufacturing relocation; Offshoring}},
language = {{eng}},
number = {{11}},
pages = {{1--22}},
publisher = {{Emerald Group Publishing Limited}},
series = {{International Journal of Physical Distribution and Logistics Management}},
title = {{Reshoring before and during the COVID-19 pandemic in an advanced economy}},
url = {{http://dx.doi.org/10.1108/IJPDLM-11-2023-0440}},
doi = {{10.1108/IJPDLM-11-2023-0440}},
volume = {{55}},
year = {{2024}},
}