Is Reshoring Better Than Offshoring? The Effect of Offshore Supply Dependence

• 成果类型: Article
• 署名作者: Chen, Li; Hu, Bin
• 署名单位: Cornell University; University of North Carolina; University of North Carolina Chapel Hill
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.2016.0604
• 发表日期: 2017
• 页码: 166-184
• 关键词: Offshoring; Reshoring; offshore supply dependence; responsiveness; demand update; pooling

摘要

In this paper we investigate the effect of offshore supply dependence (OSD) on offshoring-reshoring profit comparisons. We find that OSD hampers a reshoring manufacturer's responsiveness to demand information updates and may significantly affect offshoring-reshoring comparisons, such that reshoring may yield lower profits than offshoring in many cases, including when offshoring has no baseline-cost advantage. We then show that OSD also affects how salient costs such as customs duties and shipping costs influence offshoring-reshoring profit comparisons. We further identify common-component designs as a mitigating measure to make reshoring more appealing under OSD, and numerically confirm the robustness of our results.