Post-Brexit back-shoring strategies: what UK manufacturing companies could learn from the past?

Abstract

The manufacturing sector in the UK is currently undergoing a significant supply chain transformation and managers are re-evaluating supply chain location decisions to minimise the disruptions caused by Brexit. This entails manufacturing offshoring and back-shoring once again being considered as strategic decisions and companies ought to make informed choices with respect to where they source or manufacture their products. This paper aims to contribute to an improved understanding of the back-shoring phenomenon in the UK. Eight case studies of back-shoring have been analysed and compared using a theoretically informed framework. The results show that back-shoring can stem from both misjudgements of previous offshoring decisions as well as changes in the demand pattern in the home country. Unlike offshoring decisions being mainly cost-oriented, strategic shift aimed at increasing the value perceived by the customer has a pivotal role in the back-shoring decision. Furthermore, skill shortage is the main barrier for the implementation of back-shoring strategies in the UK and requires companies’ attention prior to its repatriation.

Keywords:

• Back-shoring
• reshoring
• offshoring
• Brexit

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Hamid Moradlou

Dr. Hamid Moradlou is a Lecturer in Logistics and Supply Chain Management at Cranfield University, School of Management. He has earned his BEng degree from University of Bath in Mechanical Engineering with Manufacturing Management followed by an MSc in Advanced Manufacturing Engineering and Management at Loughborough University. He also obtained his PhD in Supply Chain Management which was funded by the Wolfson School of Mechanical, Electrical and Manufacturing Engineering at Loughborough University. His research interests mainly focuses on investigating the offshoring and re-shoring phenomenon in developed countries and the impacts of new generation of technologies, Industry 4.0, on manufacturing location decision.

Luciano Fratocchi

Professor Luciano Fratocchi is a Full Professor of Management Engineering at the Department of Industrial and Information Engineering, University of L’Aquila (Italy). He obtained his Master Degree in Economic and Business at the LUISS Guido Carli University (Rome, Italy) and his PhD in Business Management at the Alma Mater Studiorum University of Bologna (Italy). His main research topic regards relocation of second degree (e.g. back-shoring and near-shoring). He co-authored articles published, among others, in the following journals: Production Planning & Control, Industrial Marketing Management, International Journal of Production Economics, Journal of Purchasing and Supply Management, Journal of World Business, International Business Review.

Heather Skipworth

Dr Heather Skipworth joined Cranfield School of Management in 2004 following the completion of her Doctorate. As an Associate Professor she is Director of the Agile Supply Chain Research Club, which provides a collaborative forum where member companies can share promising supply chain practices/research. She works on a variety of research projects and has published in a number of international scholarly journals. Her research interests include: agile/responsive SCs; segmented SC strategy; SC risk and manufacturing location decisions. She is also the lead author on a key logistics text influencing academics and practitioners entitled ‘Logistics Management and Strategy’ (edition 6, 2019).

Abhijeet Ghadge

Dr Abhijeet Ghadge is a Senior Lecturer in Logistics and Supply Chain Management at Cranfield School of Management, UK. He holds PhD in Operations and Supply Chain Management from Loughborough University, UK, and MTech in Industrial Engineering and Management from Indian Institute of Technology, Kharagpur, India. He has over 13 years of industrial, academic and consulting experience working with a wide range of UK, European and Asian organisations. Dr Ghadge has published widely in the leading operations, logistics and supply chain management journals. He follows practice-driven approach to problems across the broad domains of supply chain risk, sustainability and Industry 4.0.