Question

Research and write a short paper on companies that have recently reshored their operations back to the United States or another host country.

Answer 1

Re-shoring is the process of moving back the operations process of a company to the host country. It is related to offshoring where c company moves its business operations from one country to another. In the re-shoring process the operations is not moved to any country but to the host country from where the company was originated.

The relocation is generally done of typical operational processes such as manufacturing or accounting. Companies relocate their operations process due to many reasons but those generally incentivise the business and increase the overall value in the operations process. The reasons can be cheap labour, strict laws in the present country, lack of skilled personnel, tax saving, getting closer to the market where products are sold etc.

Some of the biggest companies in the United States such as Apple Inc., Google, Nike etch have move their operations to countries like India, China and Taiwan for incentives such as cheap labour and availability of skilled personnel. This relocation have brought down their manufacturing cost and have made their business more sustainable.

Lower cost and increased corporate profitability and the increase in speed to reach the market are primary motivation for these companies to move to other counties.

In the recent years British Telecom, Santander UK and Aviva have back shored their call centre operations to UK in order to boost the economy and regain customer satisfaction as these companies was put under moral pressure to support the economy of the host country. A decrease in the jobs in Britain and complaints from the customers that they are not able to explain their problems to Indian tele-callers made these companies to immediately re-shore back to the UK.

Otis Elevators and Starbucks have also re-shored back their operations to the US. Although the re-shoring done by Starbucks have helped in creating many jobs in the country as only their support functions such as accounting etc. was offshored; the re-shoring done by Otis Elevators failed completely as they brought their entire manufacturing process back to the US.

Although offshoring and re-shoring are the process which decided by the management of any company as where they want to move their operations but sometimes the host country government also creates pressure on these companies. Intellectual property laws have also become one of the concern due to which some of the companies have moved back to their origin as offshoring of the processes involves transfer of intellectual property and trade secrets which can be leaked bringing loses to the companies involved.