Competitive manufacturing for reshoring textile and clothing supply chains to high-cost environment. A Delphi study

• DOI: https://doi.org/10.1108/IJLM-10-2017-0270
• Pages: 1147-1170
• Date: 13 July 2018
• Published date: 13 July 2018
• Author: Rudrajeet Pal,Sara Harper,Ann Vellesalu
• Subject Matter: Logistics,Management science & operations

Competitive manufacturing for

reshoring textile and

clothing supply chains to

high-cost environment

A Delphi study

Rudrajeet Pal, Sara Harper and Ann Vellesalu

Department of Business Administration and Textile Management,

University of Borås, Borås, Sweden

Abstract

Purpose –The purposeof this paper is to identify andprioritise the success factors and challengesrelated to

competitive manufacturing (CM) capabilities in a high-cost environment, and identify their potential to support

future reshoring in textile and clothing (T&C) supply chains, with judgements from the practitioners’perspective.

Design/methodology/approach –A Delphi study method is adopted with industry practitioners from the

region of Western Sweden. Following a literature review on reshoring to identify relevant factors related to

CM capabilities, a multiple round Delphi is designed to rank the success factors and challenges, and to further

evaluate the likelihood of the success factors to lead to future reshoring. Additional semi-structured

interviews are conducted to provide deeper explanation.

Findings –Empirical insights are both conforming to, and deviant from, evidences from extant literature.

Moderate agreement is seen among the practitioners on the success factors; time- and product/process-related

ones being ranked the highest. Low consensus is reached for the challenges, however, those related to high

costs and lack of local resources were key concerns. Some anomalies from previous conception emerge among

the challenges regarding increased costs of production, inventory and product variety trade-offs, and low

skillset presence.

Research limitations/implications –The paper contributes to reshoring research by identifying and

prioritising value-driven success factors and cost-related challenges to CM in high-cost environments, for

labour-intensive T&C industries. In connection, some interesting paradoxes originate when dealing with

multiple success factors.

Practical implications –Valuable insights are generated for informed decision making related to CM and

future choice of its location.

Originality/value –Along with the decisive knowledge of the reshoring success factors and challenges, the

study offers an interesting T&C practitioners’perspective.

Keywords Sweden, Europe, Delphi, Decision making, Delphi study, Reshoring, Offshoring-reshoring,

Manufacturing capability, Textile and clothing

Paper type Research paper

1. Introduction

Reshoring is an emerging manufacturing relocation phenomenon which has gained

momentum in many industries due to numerous challenges related to long distance trade

and transactions (Kinkel and Maloca, 2009; Gray et al., 2013; Kinkel, 2014; Tate et al., 2014).

For instance, managers are increasingly evaluating the “true total cost”of offshoring, in

terms of increasing direct costs and difficulties related to managing offshore suppliers

caused by spatial, cultural and organisational distances (Abbott, 2007; Stanczyk et al., 2017).

Although a wide variety of motivational factors and drivers for reshoring have been

discussed in literature (see e.g. Fratocchi et al., 2016; Stentoft, Olhager, Heikkilä, and Thoms,

2016; Wiesmann et al., 2017), for example, related to location affecting production costs,

related to time affecting logistics costs and related to organisational structure affecting

network design; only few have underlined that beyond such scholarly focus on

The International Journal of

Logistics Management

Vol. 29 No. 4, 2018

pp. 1147-1170

© Emerald PublishingLimited

0957-4093

DOI 10.1108/IJLM-10-2017-0270

Received 23 October 2017

Revised 9 March 2018

18 May 2018

Accepted 23 May 2018

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/0957-4093.htm

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Competitive

manufacturing

manufacturing location decisions it is important to address the managerial perspective

(Ketokivi et al., 2017; Kinkel and Maloca, 2009; Kinkel, 2014). Ketokivi et al. (2017) highlights

this by arguing that practitioners are largely guided by “factual premises”(i.e. beliefs) rather

than facts when making decisions (Simon, 1997), e.g. when determining where to locate,

whether to make or buy, either to produce small-series or in bulk, etc. Several reshoring

papers have developed or proposed tools to support managers and assist in such reshoring

decision making (e.g. Stentoft, Olhager, Heikkilä, and Thoms, 2016 propose a back-shoring

decision-making model, Joubioux and Vanpoucke (2016) propose a right-shoring model for

making informed decisions while choosing location of plants, and Wiesmann et al. (2017)

provide a comprehensive list of criteria that influence reshoring decision). However

this does not change the “fact”that practical implications of such tools lie in the interpretive

beliefs and behaviour of the managers/practitioners. As a result, the point of departure

should equally be the actual relocation decision and not only on the theoretical premises,

as pointed out by Ketokivi et al. (2017). Thus, there is a need to develop a more

organised scholarship by understanding practitioners’views when making reshoring

decisions, i.e. what capabilities are perceived to enable the relocated manufacturing and

what are the challenges.

In connection, despite the significance of manufacturing capabilities to reshoring, the

operations and supply chain management literature has focused predominantly on the

macro-economic analysis (see Ellram et al., 2013) or in focussing on right reshoring

alternatives (see Gray et al., 2013; Fratocchi et al., 2014). By and large, literature addressing

the operational aspects related to manufacturing capabilities, and how these are perceived

from within the organisations to influence a specific decision is relatively sparse (Moradlou

et al., 2017). Recent authors have underlined the role of a vast array of competitive

manufacturing (CM) and supply chain capabilities in high-cost environment to be crucial to

support reshoring potential (see Ketokivi et al., 2017; Tate and Bals, 2017), such as higher

responsiveness (Moradlou et al., 2017), manufacturing flexibility (Martínez-Mora and

Merino, 2014), greater control (Robinson and Hsieh, 2016), long-term supply relationships,

and even higher demand for supply chain sustainability (Ashby, 2016; Joubioux and

Vanpoucke, 2016). Combined with the need to capture practitioners’decision perspective,

the identification and prioritisation of these operations and supply chain-related success

factors and challenges, that would determine the competitiveness of manufacturing in

high-cost environment, is necessary to support further reshoring. In the context of

manufacturing supply chains that encompass activities directly related to sourcing,

manufacturing and distribution of the product and its components (Mentzer et al., 2001),

success factors are operational aspects related to CM, internal to the firm or the supply

chain, which are necessary for managers to devote attention to enable future reshoring

success. Challenges refer to difficulties or deficiencies which may act as barriers to the

development of CM capabilities.

Moreover, in order to capture such practitioners’view on the topic, more industry-specific

studies are required. Martínez-Mora and Merino (2014) highlight that the effects of reshoring

differ based on the industry, depending upon various factors such as host country’s labour

market, etc. This makes the reshoring potential and the underlying requirement for

manufacturing capabilities considerably different between labour-intensive and capital-intensive

industries (Fratocchi et al., 2014). Considering the relatively low number of studies on reshoring

and supporting CM capabilities in labour-intensive industries, textile and clothing (T&C) offers

an interesting industry-level case. T&C industries were one of the very first industries to move

production to low-cost bases due to cost-related advantages, which are still the main

consideration for manufacturing locations (Appelbaum and Gereffi, 1994; Gereffi and

Memedovic, 2003). However, due to a variety of emerging pressures such as requirements

for green supply chains, sustainability or “country of origin”transparency for consumers

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