ABSTRACT

Offshoring for manufacturers has focused primarily on costs. While the extremely low cost of labor in Third World countries has historically been the single biggest driver of this, there are other costs as well. These include the costs of compliance with environmental and regulatory matters, taxes, exchange rates, union expenses, and more. As time has unfolded, the cost differences have shrunk in many cases. Also, many offshoring companies have learned that there were other costs that they failed to notice and include in their decision to offshore. Experience is often a great teacher, particularly of unintended consequences. This chapter examines some of the significant and emerging reasons why companies are more serious than ever about reshoring.