...Catania Via A. Doria 5, 95131 CATANIA CT ITALY cdimauro@unict.it 3 Department of Management, University of Bologna Via U. Terracini 28, 40131 BOLOGNA BO ITALY p.barbieri@unibo.it 4 Department of Electric, Managerial and Mechanical Engineering, Via Delle Scienze, 206, 33100 UDINE UD ITALY nassimbeni@uniud.it 5 Department of Management, University of Bologna Via U. Terracini 28, 40131 BOLOGNA BO ITALY andrea.zanoni@unibo.it ABSTRACT Interest in back-reshoring strategies – intended as companies’ decisions to reverse previous off-shoring by bringing manufacturing back home – has gained momentum recently. However, little is known so far about the magnitude of this phenomenon, about its geographical boundaries, and about the underlying motivations. In this paper a characterization of back-shoring as part of the dynamics of firms’ internationalization strategies is offered. Next, building on emerging empirical evidence, open questions are identified and an agenda for research is proposed. KEYWORDS Reshoring Back-reshoring Near-reshoring Off-shoring Internationalization 1. Introduction In the last few years numerous manufacturing companies have announced the return of part of their off-shored production (either in-sourced or out-sourced) to their home countries. Industrial giants such as Caterpillar, Bosch, and Philips are featured among them, but also a plethora of smalland medium-sized enterprises that are reconsidering their international...
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...INTRODUCTION At the height of Henry Ford’s empire, he owned every aspect of the supply chain, from the steel mills, the rubber plantation and the factory. But with diversification of markets and increasing globalisation, companies do not have this luxury. Supply chains have grown longer and require more time and money to delivr, companies need to focus on core competencies while still maintain a control over the supply chain. The polarisation of the global market is important too and is currently characterized by expanding product variety, short life-cycle, shifting customer demand and continuous advancement in technology. HISTORY AND PRESENT Twenty years ago, experts were predicting the death of companies that did not relocate to countries with smaller overheads and costs. The fanatical levels of competition between companies reduced the prospect of success or failure to one absolute: cost. This led to an exodus of companies travelling to production facilities on the other side of the globe. Thus supply chains became long and unwieldy, reducing the amount of control and oversight over it. The influx of wealth in the LEDCs allowed the governments to improve standards , according to the International Labour Organisation, wages in Asia between 2000 and 2008 rose by 7.1-7.8%/ year; this reduced the cost advantage that brought the companies flocking to their doors. Oil and energy prices and consequently transportation costs have sky rocketed, which reduces the cost advantage...
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...stockholder, or a stakeholder. In my opinion, it’s wasted energy and effort to oppose what is already a vital part of the U.S. economy. By no means is it the perfect solution to the employment, environmental, social issues, etc., but it is a vital way ahead for the U.S. to combat those significant issues as well as keep up with technological advances and remain a strong and dominant force in the world economy. “If you're totally illiterate and living on one dollar a day, the benefits of globalization never come to you” is a quote from former U.S. President Jimmy Carter. The money you spend in the U.S. goes toward globalization even if you haven’t recognized it yet. It’s impossible to miss signs of globalization in the U.S. even with the reshoring efforts of the U.S. manufacturing. There are definite signs of more manufacturing returning to the U.S. and it has certainly aided in the economic revitalization of the U.S. from the recession that began in 2007. On the surface it may appear that...
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...grow which is why we are saving companies around £1bn through removing unnecessary red tape, cutting corporation tax, and estabilishing a business bank to diversify the choice of lending to SMEs • The Barometer – 500 Manufacturing SMEs o 56% increased sales in the last 6 months. http://www.mas.businessgrowthservice.greatbusiness.gov.uk/news/mas-barometer-reveals-quality-cost-and-delivery-are-prime-drivers-to-move-production/ • Wages a rising dramatically in low-cost manufacturing bases • Price of logistics continues to escalate • Reshore UK o ReshoreUK Initiative o Run by the UK Trade and Investment (UKTI) and MAS to help manufacturers take advantage of the business opportunities created by reshoring. o SME manufacturers to ensure they are ready to take advantage of reshoring and new investment by providing them with strategic and technical advice, visibility of new supply opportunities and then signposting them to potential funding support to enhance capability to make it...
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...This allows for greater quality control as well as an increased control over production time and a better communication chain between textile suppliers and retailers. Though these are all good things, they come with a higher production bill and a long term investment in the facility. Reshoring is another option, which is just the act of introducing domestic manufacturing to a country again. The benefits of this includes good publicity, an increase in domestic jobs, a higher ability to adapt with consumer needs and lastly, greater quality control. Though these things are good, it would be a more expensive way to product garments, which would need to be considered. Lastly, offshore production would be the third option to consider, which is production somewhere where the company cannot directly oversee it. This is the cheapest option out of the 3, brings trade agreement incentives to the forefront and even provides more fabrics to the company’s disposal (which would be really good for producing higher quality garments), but the...
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...___________________________________________________ | | Research Assignment 7 Brillianc e and Blunde rs in China ’s Supply Cha in (10 pts) Correct answers are based on course-assigned material (text and readings). This week the main topics are competition and supply chain. China is our focus country. We can start with the “Brilliance” part: from diamonds to Eastern Europe to South Africa. And now we have reshoring: back to the US. Last article is about how global supply chain is evolving. 1. China is now the biggest buyer of diamonds from Antwerp, importing $737 M in the first 3 Months of 2010. 2. The Belgian diamonds may have been cut in China to save money. 3. Perhaps surprisingly, China is building low-cost sports-utility vehicles and tractor factories in Eastern Europe. 4. China has become Africa ’s biggest trading partner and Standard Bank estimates that merger and acquisition activity from China to this area totaled 5 billion last year. 5. According to the video, 25 called reshoring. % of manufacturing jobs lost in US have returned in a process 6. As a result of the...
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...Outsourcing vs. Offshoring Once e have seen the reason and downsizes about outsourcing, let’s talk about the implications it implies. Taking what Claudia has introduced, offshoring is a possible way out of outsourcing and the most controversial one. To clear your mind; the biggest difference is that while outsourcing can be (and often is) offshored, offshoring may not always involved outsourcing. Both may save company money, but only offshoring specifically means sending jobs out of the country, typically to a cheaper location. It includes both to the setup of a subsidiary abroad, or to the outsource activities of a company. So the question is, not just when to outsource, but when to do it through offshoring? 1. It depends on the quality you want to ensure to the client? Ultimately, the best solution for your business depends on your needs. If you need a high level of quality and communications, outsourcing locally may be best. If you need low costs and a systematized business, offshoring is often a better solution. 2. Or maybe it depends on the relationship you must have with the client? Activities which can be precisely specified can be offshored effectively. This is why software coding is often done in an offshore location. On the contrary, activities that require direct customer interaction, deep domain knowledge, or deep cultural knowledge should be onshored. Thus, customer service is usually conducted onshore because of the need to be close to customers...
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...The problem to be investigated in this study is the economic importance of the automotive industry. It will explore the social impact it has brought worldwide and how it is affecting the world of commerce. It will also explain the foreign trade and the different automotive industries of each country. The following sub-questions will be evaluated: * What pollution-control strategies each automotive industry are practicing? * What are the latest in automobile safety measures? * How does motor vehicle production affect the economy? * What are the standards of manufacturing efficiency in an automobile? INTRODUCTION The automobile industry is concerned with profits and competition; with consumer demands for styling, safety, and efficiency; and with labor relations and manufacturing efficiency (“,” 2008). About 250 million vehicles are in the United States. Around the world, there were about 806 million cars and light trucks on the road in 2007; they burn over 260 billion gallons of gasoline and diesel fuel yearly. The numbers are increasing rapidly, especially in China and India (“” 2008). In 2008, with rapidly rising oil prices, industries such as the automotive industry, are experiencing a combination of pricing pressures from raw material costs and changes in consumer buying habits. The industry is also facing increasing external competition from the public transport sector, as consumers re-evaluate their private vehicle usage...
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...SHANGHAI – China’s economy is at a crossroads. As 2013 begins, foreign and domestic observers alike are asking which path the country’s economic development should take in the next decade. How can China ensure stable and sustainable growth in the face of significant internal and external challenges, including slowing medium- and long-term growth, rising labor costs, and growing inflationary pressure? After the global economic crisis weakened external demand, which sustained China’s unprecedented economic growth for three decades, the authorities agreed that internal demand, especially domestic consumption, must become the country’s new growth engine. At the Chinese Communist Party’s congress in November, China’s leaders declared their intention to double per capita income by 2020, unleashing 64 trillion renminbi ($10.2 trillion) of purchasing power. Indeed, with roughly 130 million middle-class consumers, China’s domestic market holds significant potential. The Boston Consulting Group estimates that, with an average annual GDP growth rate of 7% in China and 2% in the United States, Chinese domestic consumption will rise to half of America’s by 2015, and 80% in 2020 (assuming that the renminbi appreciates at an average rate of 3% against the US dollar over the next few years). Moreover, the current-account surplus plummeted from more than 10% of GDP in 2007 to 2.8% in 2011, reflecting China’s decreasing reliance on exports to drive economic growth. In 2010, China’s imports ranked...
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...The financial crisis has caused a lot of issues for all types of companies, and particularly for multinationals. One of the key points in the readings was that there needs to be a change in strategy. Many multinationals had a tight approach to their strategy using a more focused strategy. These companies now must adapt and loosen their strategy to a more broad approach. Selling to a specific market segment may no longer be the key, but rather offering products to not only high end markets but to lower markets as well. Companies also need to look at threats to new entrants. Many companies viewed Chine as a major competitor but were not focused on companies in China as competitors. With China and India being responsible for so much of the world’s GDP, many of the multinational companies there should be viewed as intense competitors along with the current competitors the company already has. Multinational companies also must add more diversity into their management ranks. With many companies beginning to open major offices and even a second headquarter in other countries; they must add a mix of diversity into their management. With that comes the need to find better ways to communicate with diverse employees. Since many people decide to ignore a person because they are having trouble understanding their accent, other ways of communication must established. This can be done by using chat rooms and bulletin boards over the Web. Multinationals may also need to refocus...
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...Labor Practices Jonathan Newberry PHL 320 12/1/2014 Wayne Moore Labor Practices According to the US Department of Labor, a “sweatshop” is a factory that violates 2 or more labor laws. Just using this definition, I’d say that using any means of production that is defined as a sweatshop is unethical. The US has a much stricter set of labor laws than many developing countries. We have higher standards for our working conditions, salaries, breaks, etc. Perspectives Manufactures that use overseas factories to make goods are just trying to maximize profit. They want to make the most money that is possible, with the least amount of effort. It isn’t ethical at all, but that is how capitalism works. “Many corporations use contract manufacturing firms to produce their goods. By separating themselves from the production of their goods, they can claim that they are not aware, and consequently not responsible for the conditions under which they were made” (Background). Pretending the problem doesn’t exist just goes to show that in most cases, making money is more important to the company than making an honest product for an honest price. Ethical perspectives here are either pay the people the right wage, or just pretend that they are being paid the right wage and ignore the fact that they are not only getting underpaid, but working in extremely poor and hostile conditions that no one would want to work in. Consumers Customer’s always want the best deal. The companies are always...
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...Contribution of the Automotive Industry to the Economies of All Fifty States and the United States 3005 Boardwalk Drive Ann Arbor, MI 48108 www.cargroup.org January 2015 All statements, findings, and conclusions in this report are those of the authors and do not necessarily reflect those of the Alliance of Automobile Manufacturers. Contribution of the Automotive Industry to the Economies of All Fifty States and the United States Center for Automotive Research Report Prepared by: Kim Hill, Director, Sustainability & Economic Development Strategies Group Director, Automotive Communities Partnership Associate Director, Research Debra Maranger Menk Joshua Cregger Michael Schultz Report Prepared for: Alliance of Automobile Manufacturers 1401 Eye Street, N.W., Suite 900 Washington, DC 20005 January 2015 ©Center for Automotive Research 2015 i ACKNOWLEDGEMENTS The Center for Automotive Research (CAR) would like to thank the Alliance of Automobile Manufacturers for support of this work. This study is the result of a group effort. The authors would like to thank our colleagues at CAR for their assistance with this study, in particular, Bernard Swiecki for his assistance with organizing and conducting interviews and Yen Chen for his input and guidance on economic ...
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...Strategic Management Case Analysis: Southwest Airlines Southwest Airlines Co. (Southwest) is often cited as a success story in terms of strategic management. Southwest is a passenger airline that provides scheduled air transportation in the United States. Primarily, the company offers passengers low-fare, point-to-point air transport services in 72 cities in 37 states all throughout America (MarketLine, 2012). Southwest is headquartered in Dallas, Texas, and has about 45,392 employees as of FY2011. For FY2011, the company generated revenues of $15.658 billion, increasing by 29.4% over FY2010 (MarketLine, 2012). Southwest reported net profit of $178 million in FY2011. It must be noted that the airline industry is famed for its cut-throat competitiveness. However, since its inception in 1971, Southwest has been able to steadily rise to the top of airline rankings due to its Low Cost Leadership strategy (Muduli & Kaura, 2011); Box & Byus, 2009). Southwest also consistently offers on-time arrival that, combined with low-priced fares, makes it highly favorable for passengers. Southwest is able to achieve its strategy by using a linear, point-to-point network and does not have an airport hub (Tierney & Kuby, 2008). As a result, the company’s aircraft are seldom idle while its competitors spend prolonged idle time while passengers switch planes at the hub (Tierney & Kuby, 2008). Because of the impact of this strategy on passengers and the industry as a whole, competitors tend to...
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...Chapter 1: Management Today Take Away 1: What are the challenges of working in the new economy? * Globalization means we can work from anywhere but competing with from from everywhere (pg 4) * Long-term employment can’t be expected in today’s workplace- jobs have to be continually earned and re-earned through performance and accomplishments (4) * High performance companies are better than their competitors at getting extraordinary results from their employees (4) * Intellectual Capital= competency x commitment (4) * Intellectual capital: combined brainpower and shared knowledge of an organization’s employee * Competency: personal talents or job-related capabilities * Commitment: how hard you work to apply your talents and capabilities to important task * Knowledge workers are dominating workplace; someone whose mind is a critical assets to employers (5) * Whole mind competencies will soon dominate the workplace * People who are creative and good with ideas (high concept) and also joyful and good with relationships (high touch) * Technology continuously tests or talents and infiltrates every aspect of our lives (5) * Tech IQ: the ability to use current technologies at work and in your personal life (6) * It is important to keep oneself updated with technology as it continues to evolve * TECH IQ is the baseline foundation for succeeding in a fast-chaining world of technological innovation ...
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...AMBA 640 / AMBA 640 HYBRID COURSE MATERIALS ASSIGNMENTS Acme Mexico City and Application of World-Class Operations and Information Systems Management Techniques and Production Planning and Strategy for Toyota North America (Version 06/01/15) Background Information for Acme Mexico City Acme Home Improvements, Inc. was founded in 1982 in Raleigh, North Carolina, USA. By mid 2015, the company had 125 stores along the US East Coast from Florida to Maine. Its annual sales are currently ~$5,400,000,000 with $280,000,000 net income. The average store is about 100,000 square feet with an additional 10,000 square feet of outside garden center. The stores typically carry 40,000 different products from 5,000 vendors worldwide. Major US competitors include Ace, Home Depot, Lowe's, and TruValue. All four operate already in Mexico. 1 In the interests of seeking greater profits and buffering against downturns in the US market, Acme has determined to follow these and other competitors to Canada and Mexico. In the latter, it has established, in accordance with Mexican law, a joint venture with local interests, known as Acme Home Improvements de México, SA de CV ("Acme de México" or "Acme Mexico City"). (SA de CV = Sociedad Anónima de Capital Variable, a Mexican corporate form.) There are five major product groups within each Acme store: plumbing and electrical supplies, building materials, hardware and tools, seasonal and garden/yard items, and paint, flooring and wall coverings. Each store...
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