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How do companies decide where to locate their manufacturing? This study uses insights from manufacturing company executives collected by means of in-depth interviews with 50 manufacturers in the United Kingdom to develop an understanding of manufacturing location decision making. The findings indicate that companies derive competitive advantage from organizing manufacturing in different ways. Retaining or reshoring manufacturing to a company’s home country can enhance new product development, control of quality, product customization, delivery performance, and cost leadership. On the other hand, companies can enhance new product development, customization, and delivery performance for new markets, if production facilities are offshored to or in proximity to these locations. In addition, some companies use a hybrid approach of offshoring the production of some components or products for cost arbitrage while retaining or reshoring other components or products for advantages from value chain integration. Based on the findings of this study, a set of key manufacturing location questions are developed that should be considered by firms pondering onshore, offshore, reshore, or hybrid manufacturing location decisions.
Stakeholder relations and sustainability practices of US small and medium-sized manufacturers
(2012)
Purpose: The purpose of this paper is to investigate the adoption of sustainability practices by small and medium-sized manufacturing (SMM) firms, the ways these firms work with their stakeholders for social and environmental purposes, and the relationships between the adoption of sustainability practices, stakeholder interaction, and product and process innovation.
Design/methodology/approach: This paper uses data from telephone interviews with 296 companies, a sustainability typology, and descriptive and statistical regression analysis.
Findings: The majority of the firms are adopting sustainability practices at least to some degree,stakeholders such as community advocacy groups, employees, suppliers, customers, and the localmedia are influencing the adoption of sustainability practices, and firms with high adoption rates of environmental practices are more successful in product and process innovation.Practical implications– The results of this research can help firms and stakeholder groups with their joint efforts to develop sustainability strategies. Community advocacy groups, employees,suppliers, customers, and the local media are capable of motivating firms to give something back tothe communities in which they conduct their business.
Originality/value: This paper contributes new understanding of the adoption of sustainabilitypractices by SMM firms, the ways these firms work with their stakeholders for social and environmental purposes, and the relationships between the adoption of sustainability practices,stakeholder interaction, and product and process innovation.
The location of manufacturing is operationally and strategically important for multinational companies. The spatial dispersion of manufacturing is determined by firm-specific as well as external factors, both of which are subject to constant change. After decades of offshoring production, the paper uses interview data from UK high value manufacturing companies to explore the recent phenomenon of reshoring and the strategic and operational effects of manufacturing location. The analyses show that concentrating manufacturing in home countries enables firms to increase organizational agility and stimulate innovation. However, under certain conditions, firms also continue benefiting from the known advantages of offshoring. This underlines that there is no universal recommendation for improving competitiveness by a certain spatial configuration of manufacturing. Instead, firms need to consider their specific markets, competitive context, and capabilities when strategizing manufacturing location."
Purpose
This paper aims to investigate the strategic consequences of manufacturing location decisions, with a focus on understanding the link between collocating manufacturing with other value chain activities, via reshoring or retaining and organizational agility.
Design/methodology/approach
The paper uses qualitative data from 115 interviews with executives from UK high value manufacturing companies to explore the recent phenomenon of reshoring and the strategic effects of manufacturing location.
Findings
The location of manufacturing is operationally and strategically important for multinational companies. The spatial dispersion of manufacturing is determined by firm-specific and external factors, both of which are subject to constant change. The analysis shows that concentrating on manufacturing in their home countries enables firms to increase organizational agility and stimulate innovation. Better integration with and more extensive collaboration between related value chain activities, such as research and development, sales and marketing, leads to higher flexibility, speed and responsiveness to customer requirements. However, under certain conditions, firms also continue to benefit from the known advantages of offshoring.
Originality/value
This research sheds light on possible strategic downsides of global value chains, characterized by dispersed activities and intermitted processes. The results provide evidence that retaining manufacturing or bringing back manufacturing operations to a company’s home country can increase organizational flexibility, speed, adaptability, innovativeness and responsiveness to customer requirements. As these capabilities are critical for long-term survival, especially in dynamic environments, firms need to review their global factory configurations and determine whether the short-term advantages of foreign locations continue to justify offshoring practices.