Reshoring

Reshoring happens when a transnational business decides to bring previously off-shored manufacturing back to the home country.

Reshoring is often motivated by the business objective of producing intermediate and finished products with the cheapest input factor. The strong rise in wage / unit labour costs in many emerging countries in recent years has accelerated the process of reshoring.

Other aims include improved certainty around delivery times (including shorter delivery times) and minimising the risk of supply chain disruptions perhaps at a time of growing trade tensions between countries.

A recent example of rehearing was the decision by sports clothing producer Adidas to relocate production back to Germany and the United States from China and India; 160 jobs were thus created compared with more than 1,000 in a typical Asian factory. In part this was because the new factories in Germany and the United States made more extensive use of robots.