Terán Vargas, Sergio
(2014)
RESHORING IN THE UK, DRIVERS AND CHALLENGES.
[Dissertation (University of Nottingham only)]
(Unpublished)
Abstract
Reshoring is not a new phenomenon, but it has become popular in recent years due to the
support of governments in developed economies, which support it with the aim of achieving a
healthy balance between manufacturing and service operations. The paper begins by
analysing the essential aspects of the concept and identify the different modes in which can
take place. Consequently the main drivers and challenges are addressed with special focus
on the UK conditions, and it is found that quality is the main driver of the trend, followed by
an increased need of responsiveness and flexibility, reduction of supply risk, increased
logistics costs, language and cultural differences, intellectual property theft, currency
exchange differences and increased labour costs in developed countries, among others. In
regards to the challenges affecting the UK, high labour costs, skilled labour deficiency, high
switching and energy costs were found the most important.
Likewise, it was found that many of the UK drivers are common among other economies
(US, Germany, etc.), differing only in the relative importance given to each one of them,
however the challenges contrast between the realities of each economy, implying that is
necessary to adopt targeted reshoring strategies. Four hypotheses were proposed based on
the findings throughout this research and complemented with a framework to assist UK
companies in selecting the best reshoring strategy based on the nature of their activities. The
results suggest there is a broad scope of activities to reshore to Britain, but a special focus
should be given to value-driven and labour intensive activities with scope for automation and
value-driven and capital-intensive activities.
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