Offshoring, overshoring, and reshoring: The long-term effects of manufacturing decisions in the United States

Over the last several decades, global supply strategies are regarded as the source of competitive advantage, particularly in the manufacturing industry. US firms moved manufacturing operations to low-cost locations (e.g., China). The rationale behind this trend was cost savings and other location advantages. As conditions of the market changed and cost advantages eroded, firms who offshored high value activities to other countries discovered additional strategic costs and suffered unintended consequences. With the extent of the challenges becoming more apparent, US firms are changing market conditions by adopting reshoring strategy. The purpose of the research is to 1) provide insights into the decision making process of both offshoring and reshoring; 2) introduce a new concept for better understand of the progressive offshoring; 3) build supply chain knowledge by establishing a theoretical understanding for reshoring and strategic costs.