Reshoring Manufacturing

University essay from Lunds universitet/Teknisk logistik

Abstract: Background: Since the last decades of the twentieth century there have been lots of companies who had moved their production processes from the origin country to another different country because of a lower cost of operations in the new location. These better conditions were due to fewer labor costs, fewer land prices, fewer transport costs and lower taxes, among others. However, nowadays reshoring is receiving increasing attention, as these conditions already mentioned are not as good as they used to be, specially the labor costs in China. Thus, there are more and more companies who contemplate the idea of bringing manufacturing back home. Purpose: The goal of the thesis is to analyze the different factors that have to be considered when bringing manufacturing back home. Are we in front of a western manufacturing renaissance? Method: This Master Thesis is divided into two parts. The first one is a study of the different literature available referred to reshoring and the manufacturing location decision.The second part is the Case Study of the company Xylem. The investment in a Swedish company is considered, trying to link what has been analyzed between theory and practice. Delimitations: The literature about reshoring is limited nowadays because the phenomenon is quite recent. Conclusion: The conclusions of this Master Thesis are divided into three parts. The first conclusion is that the manufacturing location decision has to be analyzed in depth, taking into account both the production costs as well as hidden costs. The second conclusion is that not every industrial sector will reshore, nor in the same way and to the same extent. Finally, propositions for future research are thoroughly commented.

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