Global shift-back's: A strategy for reviving manufacturing competences

Global companies make their sourcing operations and manufacturing decisions mainly based on financial principles and metrics. What is often ignored is the strategic value of domestic locations and contextual tacit knowledge. Recent empirical work on knowledge flows demonstrates that proximity is very important. The risk of losing knowledge and important competencies developed through generations within companies and value chains need to be considered in the process of developing a global sourcing strategy. This chapter sheds light on how global shift-backs by demonstrating the way that backshoring affect organizations which located in a high-cost country. Based on interviews with managers and key persons within a specific industry, the authors investigate how companies preserve innovative capabilities when considering closing down (captive) offshore centres and embarking on a backshoring strategy. This research also offers valuable insights into how to restore organizational capabilities when companies bring manufacturing activities back.