Drivers and antecedents of manufacturing offshoring and backshoring - a German perspective

Discussions on the potentials and risks of the relocation of previous termmanufacturingnext term activities to low-wage countries have resurged in recent years in the wake of a new globalisation debate. previous termManufacturingnext term offshoring has become an increasingly interesting option for firms of all sizes. Besides the chances to improve the company's cost position, the risks of production offshoring are also evident. An analysis of the previous termmanufacturingnext term offshoring and backshoring activities of 1663 German previous termmanufacturingnext term companies shows that production offshoring has currently lost momentum. On the other hand, backshoring of once offshored previous termmanufacturingnext term capacities is also a quantifiable phenomenon. Every fourth to sixth offshoring activity is followed by a backshoring activity within the following 4 years, mainly due to lack of flexibility and quality problems at the foreign location. A deeper, qualitative analysis in 39 German previous termmanufacturingnext term companies shows that not all companies do pay sufficient attention to qualitative factors crucial for success and competitive advantage in their location decisions. Thus, managerial implications for a systematic location planning process are drawn from our findings.