Understanding the Reshoring Decision-Making Process Using AHP Approach

Document Type

Conference Proceeding

Publication Date

1-1-2014

School

Construction and Design

Abstract

Reshoring is garnering attention in the popular press and the academic literature. There have been several high profile cases of U.S. manufacturers returning some offshored operations to the US. This has encouraged other manufacturers to consider shifting their outsourced production and sparked public interest in the phenomenon of reshoring. In addition to overt labor costs, there are also many hidden costs associated with offshoring. Reshoring is not just for manufacturers; service industries may find advantages as well. This paper presents an approach to analyzing the viability of reshoring versus outsourcing for specific types of industries. A survey of eleven companies was analyzed by analytical hierarchy process (AHP) and is used to demonstrate how the decision-making process regarding reshoring can be understood. The preliminary findings are that logistics cost and proximity to customers are common factors driving reshoring, but other factors such as quality varied by industry. More data collection using this approach is recommended.

Publication Title

IIE Annual Conference and Expo 2014

First Page

2672

Last Page

2681

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