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PUEB research projects

Manufacturing reshoring: a comparative study between transition and industrialized economies - the Who, Why and How approach

Source of funding: National Science Centre, Poland
Funding Scheme: HARMONIA 10
Project ID number: 2018/30/M/HS4/00057
Start date: 12.04.2019
Finish date: 11.04.2021
Amount of funding: 188 720  zł

General description:
The gradual relocation of production from developed countries to economies with lower production costs and broad access to the workforce was one of the most fundamental changes in the world economy in recent decades. Decisions on manufacturing offshoring of production were mainly made to reduce costs and transfer risk and responsibility to external entities. The progressive fragmentation of supply chains led to the reality where highly added value processes were concentrated in developed countries, while production of lower added value was directed to economies with lower production costs. 
With the increase of the scale of offshoring, examples of failures related to the implementation of this strategy appeared to be more and more frequent, and its lack of economic justification was highlighted. Research indicates that the level of cost attractiveness of many foreign locations is gradually decreasing and logistic problems, difficulties in maintaining the appropriate quality of products and complications related to the coordination of activities are deepening. At the same time, the automation and robotization of production have become a progressive economic and technological trend, limiting needs related to manning. Underestimation of costs (financial and nonfinancial) related to foreign operations led to the need to revise previously implemented production strategies by some enterprises and in many cases to partial or complete relocation of production activity to home countries, i.e. reshoring.
Reshoring can be perceived as a response to changes in internal and external conditions or as a correction of managerial mistakes made during the implementation of the previous offshoring strategy. Although reshoring is gaining in popularity, research on this phenomenon is still at an early stage, and it is practically undiagnosed as far as the Polish enterprises are concerned. Analysis and evaluation of this phenomenon in Poland only (as an transition economy) brings a fractional picture of reality, which is why it seems justified to compare the premises and conditions for the implementation of reshoring strategies in countries with different development levels. In this context, a decision was made to check whether there are any differences between enterprises belonging to the same industry but originating from two different home countries at different level of development, i.e. Poland and Italy - one of the industrialized economies where reshoring of production is most frequently observed.
The project has the character of basic research and includes new theoretical studies. Its main goal was to create new knowledge by identification and comparison of premises and conditions of reshoring phenomenon development in transition (Poland) and industrialized (Italy) economies. As part of a multi-stage research procedure will be carried quantitative research (survey, deliberately selected research sample covering large, medium and small entities from fashion and electromechanical sectors), along with case study (companies implementing a reshoring strategy) and thorough analysis of secondary sources.
The main benefits of international cooperation include the implementation of the first crosssectoral research based on the same research procedure. The results of the research of Polish and Italian scientific units will be combined and integrated to develop a conceptual framework explaining the differences and similarities between reshoring strategies implemented by companies in transition and developed economies. In addition, the implementation of the project objectives will enable among others: diagnosis and comparison of the approach of Polish and Italian manufacturing companies for reshoring, actual premises, barriers and costs of this phenomenon, assessment of the possibilities of future development of this phenomenon, as well as the development of a range of activities and tools that could help the production entities, which consider the relocation of production to the home country. In addition, the results of the conducted research will enable the postulation of recommendations to strengthen the competitive position of enterprises in selected industries.

Principal Investigator:
dr Michał Młody
Department of Strategic Management
Profil na google scholar 

Partner institution:
prof. Luciano Fratocchi
Università degli Studi dell'Aquila