Where is the Swedish Manufacturing Industry heading?: a Location Decision Perspective
Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
The paper’s interest arises thanks to the intention of fulfilling a gap occasioned by the lack of research, didactically and empirically, on solving problems concerning dynamics within the Supply Chain. Globalization has promoted an environment that extent and scarce competitiveness, leading companies to move their manufacturing and production tasks away and to take advantages from every location to beat competitors around the world.
Now that globalization is settled to stay and even small and medium enterprises have performed offshoring or outsourcing activities to reduce their costs, a new era to stand out has arisen for companies. Enterprises search for new manners to be distinct than competitors and gain share in their markets. As a consequence, during the last years, a new phenomenon, known as reshoring, has been noticed mainly in US and partly in Germany, UK and Italy. The blank in the researches of reshoring activities is more obvious in Europe, especially in Sweden. Therefore, this paper seeks the answer to ‘How do companies with headquarters in Sweden relocate activities?’ in order to verify the existence of any trend, or even the appearance of this new trend regarding location decisions. The study of eight companies has enabled us to collect information about companies that are implementing reshoring processes and which were the reasons that guided them to perform the way they did. As the definition of reshoring processes refers to cases where a previous offshoring rocess has been developed, the study of reshoring is not realized in isolation. We collected information regarding the reasons why some companies undertook offshoring processes in the past and how the outcome of that strategy is associated to the current phenomenon. Furthermore, we have identified the reasons that explain why some companies did not carry out offshoring processes in the past and why those that did have been reshoring in recent years. It has emerged the presence of the Servicification process, which could clarify the manufacturing climate and affect companies’ location decisions in Sweden. In short, the gathering of information has enabled us to build an overall picture of the evolution of offshoring and reshoring in the Swedish Industry in terms of size and the causes of this evolution, with the appearance of a possible Regionalization trend in a long-term scenario. The main conclusion is that in the hunt of companies to achieve a right mix of offshore and n-home activities, a reshoring movement is happening between, but it is accompanied by the remaining offshoring trend, which is much larger. Although small, reshoring exists and the main key variables to control the phenomenon are lower costs, proximity to markets, core competences protection and concentration of facilities. The most attractive countries for Swedish companies as a destination to relocate their activities seem to be countries in Eastern Europe. Companies do not perceive the phenomenon as a trend neither they refer to those movements as ‘reshoring’ due to the probable bad feelings and bad popularity that brings ‘coming back’.
Place, publisher, year, edition, pages
Reshoring, manufacturing networks, offshoring, location decisions
Economics and Business
IdentifiersURN: urn:nbn:se:kth:diva-189623OAI: oai:DiVA.org:kth-189623DiVA: diva2:947413