Global Shift-Back’s: A Strategy for Reviving Manufacturing Competences

Abstract

Global businesses base their sourcing operations and manufacturing decisions primarily on financial principles and metrics. What is often disregarded is the strategic value of domestic locations and contextual tacit knowledge. However, recent empirical work on knowledge flows shows that proximity is crucial. The risk of losing knowledge and important competencies developed through generations within companies and value chains needs to be considered when developing a global sourcing strategy. This chapter sheds light on how global shift-backs, through backshoring are seen to affect organizations that are located in a high-cost country. Based on interviews with managers and key personnel within a specific industry, we explore how companies preserve innovative capabilities when considering closing down (captive) offshore centers or when embarking on a backshoring strategy. The implications derived from the case offers valuable insights into how organizational capabilities could be restored when companies bring manufacturing back.

Citation

Nujen, B.B. and Halse, L.L. (2017), "Global Shift-Back’s: A Strategy for Reviving Manufacturing Competences", Breaking up the Global Value Chain (Advances in International Management, Vol. 30), Emerald Publishing Limited, Leeds, pp. 245-267. https://doi.org/10.1108/S1571-502720170000030010