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Towards more balanced sourcing strategies – are supply chain risks caused by the COVID-19 pandemic driving reshoring considerations?

Remko van Hoek (SCM Department, Sam M Walton College of Business, Rogers, USA)
David Dobrzykowski (SCM Department, Sam M Walton College of Business, Rogers, USA)

Supply Chain Management

ISSN: 1359-8546

Article publication date: 2 June 2021

Issue publication date: 6 September 2021

4476

Abstract

Purpose

Reshoring is one of the supply chain risk management techniques suggested in literature. However, literature suggests that the decision-making involved in reshoring is complex and not fully understood. In the context of the COVID-19 pandemic, reshoring may represent a way to reduce reliance on global sources and improve resilience of their supply chains. This paper aims to explore if the pandemic is driving reshoring decisions and if the pandemic will actually lead to companies reshoring parts of their supply chain.

Design/methodology/approach

This paper critically engages with senior(-most) supply chain managers from three manufacturing companies as they proceed through reshoring decision-making. This enables to develop experiential knowledge about reshoring decision-making processes and their context, as well as insights into the relevance of existing knowledge about reshoring. While not a full multiple case study, the opportunity to engage directly with senior(-most) supply chain managers as they consider reshoring, enables near real-time learning. Not only is reshoring a very timely topic literature has also called for more event-based empirical research. Further to that, it is hoped that this can complement this special issue and support, in a timely manner, the many researchers that are actively studying the impact of the pandemic on supply chains.

Findings

Reshoring was being actively considered by all three companies during the research process in Q3 and Q4 of 2020. During this period the pandemic has not yet led to substantial implementation of reshoring, at least by the companies studied in this paper. In response to tariffs on Chinese imports, companies had been diversifying their supply base away from China, but doing so by developing alternative, global sources. Additionally, companies are using alternative risk management techniques, such as supplier collaboration, in the short to medium term. Reshoring decision-making is indeed found to be complex and requires a longer-term time horizon for decision-making and implementation. Logistical challenges and growth in demand do drive a willingness of consumers to pay a premium for locally sourced products. However, when supply normalizes these considerations might lose relevance well before reshoring decision-making and implementation can be completed.

Originality/value

This paper studies reshoring in a real-world setting, learning directly from insights from industry as they emerge. This paper develops four extensions to existing knowledge, develop these in frameworks and hope that this will support ongoing consideration in industry and support the many researchers that are active in this domain today. This paper also suggests several directions for further research.

Keywords

Acknowledgements

The authors thank the three participating companies for engaging with us in our research and openly sharing their consideration and approaches.

Citation

van Hoek, R. and Dobrzykowski, D. (2021), "Towards more balanced sourcing strategies – are supply chain risks caused by the COVID-19 pandemic driving reshoring considerations?", Supply Chain Management, Vol. 26 No. 6, pp. 689-701. https://doi.org/10.1108/SCM-09-2020-0498

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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