Business

Study Notes

Reshoring

Level:
A Level
Board:
AQA, Edexcel, OCR, IB, Eduqas, WJEC

Reshoring is the reverse of offshoring. it involves a business returning production or operations to the host country that had previously been moved to a different international location.

Reasons for Reshoring

Whilst the extent of reshoring is nowhere near as significant as offshoring in recent decades, there have been an increasing number of businesses who have decided to move production or operations back to the home country.

Key reasons include:

  • Greater certainty around delivery times (including shorter delivery times)
  • Minimising risk of supply chain disruptions
  • Reducing the complexity of the supply chain
  • Making it easier to collaborate with home-based suppliers
  • Getting greater certainty about the quality of inputs and components
  • Recognising that the cost advantage of producing or sourcing overseas is not as significant as it used to be (particularly in China where unit labour costs have risen significantly in recent years).

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