ABSTRACT:
The study examined the impact of the COVID-19 pandemic on production location strategies. It explores
the historical shift in production activities, leading to rising costs in developing countries. The pandemic
has accelerated the trend of nearshoring. The study develops and applies a framework to evaluate a
nearshoring candidate country, considering both quantitative and qualitative factors. The case study
focuses on production in China and incorporates sector-specific characteristics. The framework
considers transport costs, lead time, and inventory costs. The study highlights that personal preferences
may not always align with economic outcomes in decision-making.
Chapter 1: Introduction
This section will adress the research of problem In the first chapter of the research, the authors provided
an elaborate introduction to the topic of nearshoring. They began by explaining that nearshoring
involved the relocation of production activities to neighboring countries instead of distant locations,
distinguishing it from traditional practices such as outsourcing or offshoring.
The authors delved into the historical development of nearshoring, tracing its evolution over time. They
highlighted how companies had increasingly recognized the strategic advantages of nearshoring. One
key advantage was the proximity to consumers, which allowed for a better understanding of local
market preferences and faster response times to customer demands. Additionally, nearshoring had
become appealing due to changing global economic conditions, such as rising labor costs in traditional
offshoring destinations.
The authors also addressed the impact of the COVID-19 pandemic on production location strategies.
They explained that the outbreak of the pandemic had served as a significant trigger for companies to
reevaluate their global supply chains. The disruption caused by the pandemic had highlighted the
vulnerabilities of long and complex supply chains, leading to a growing focus on resilience and risk
mitigation. As a result, companies had been reconsidering their production locations, with an increased
emphasis on nearshoring to ensure greater supply chain stability and flexibility.
This chapter emphasized the relevance and significance of studying the impact of nearshoring on global
crisis impacts. It highlighted that nearshoring could contribute to more resilient and agile supply chains.
By understanding the effects of nearshoring in times of disruption, researchers could provide insights
into how companies could adapt their production networks to be better prepared for future crises.
The article that was reviewed provided an in-depth exploration of nearshoring and its significance within
global supply chains, with a particular focus on the impact of the COVID-19 pandemic. The author began
by delving into the historical progression of production activities, tracing the shift from outsourcing to
offshoring and eventually to nearshoring. This historical context helped establish the evolution of the
topic and provided a foundation for understanding the then-current state of supply chains.
The author also emphasized the connection between the pandemic and the renewed attention given to
nearshoring. As the vulnerabilities of existing international supply chain setups became apparent during
the global health crisis, organizations and policymakers started reevaluating their strategies and
considering the merits of nearshoring. The disruption caused by the pandemic highlighted the risks
associated with relying heavily on distant production locations and prompted a closer examination of
alternative approaches.
However, there were certain aspects of the article that could have been improved in terms of writing
techniques and reviewing parameters. Firstly, the introduction lacked a clear structure, making it
challenging for readers to anticipate the organization of the subsequent sections. It contained instances
of complex sentence structures and technical terminology that might have posed difficulties for readers
who were less acquainted with the subject matter. Simplifying the language and offering explanations
for specialized terms would have improved the overall clarity and accessibility of the article. Providing a
concise outline of the article's structure would have enhanced the overall coherence and readability.
Additionally, the article would have benefited from a more thorough analysis, supported by valid data.
While the author mentioned a SWOT analysis for China as an offshoring production location, they did
not describe or validate the data clearly. This lack of clarity could have confused readers who sought to
explore this analysis further. Furthermore, when discussing survey-based views and existing literature
on nearshoring, the author failed to include specific references to support these claims. Including proper
citations would have enhanced the credibility and reliability of the article's content.
In conclusion, the author effectively introduced the topic of nearshoring and its relevance within global
supply chains, particularly in light of the COVID-19 pandemic. The strengths of the introduction lay in the
comprehensive explanation of the historical progression and the connection to the then-current events.
However, there was room for improvement in terms of providing a clearer structure, citing relevant
sources, and using more accessible language to cater to a broader readership. Additionally, conducting a
more robust analysis supported by valid data would have further strengthened the article's integrity.
The literature review in question was focused on presenting concepts, definitions, and factors related to
outsourcing, offshoring, and nearshoring. However, it is important to note that the provided text did not
appear to be a complete literature review but rather a section of a larger document. Nevertheless, I can
provide some feedback based on the available information.
In terms of the author's strengths, one positive aspect was their ability to define key terms and concepts
related to outsourcing, offshoring, and nearshoring. This helped establish a foundation for
understanding the subsequent discussion. Additionally, the author included citations from other sources,
which indicated that they had conducted research and had relied on existing studies to support their
statements. This demonstrated that the author had considered a range of perspectives and integrated
them into the review.
However, there were some drawbacks to consider. Firstly, the literature review appeared to be
somewhat fragmented, lacking a cohesive flow and structure. The provided text jumped between
different sections and topics without clear transitions, making it challenging to follow the logical
progression of ideas. A more organized structure would have enhanced the readability and coherence of
the review.
Furthermore, the review mostly focused on descriptive information, such as definitions and features,
without offering a critical analysis or synthesis of the reviewed research. While it was important to
establish a foundation of knowledge, a comprehensive literature review should also have evaluated and
compared different studies, highlighted gaps or contradictions, and provided insights or
recommendations based on the existing research. This level of critical analysis appeared to be missing
from the excerpted text.
In conclusion, the author's strengths lay in their ability to define key terms and incorporate citations
from other sources. However, the literature review would have benefited from improvements in terms
of its structure, coherence, and critical analysis of the reviewed research. By addressing these areas, the
author could have enhanced the overall quality and effectiveness of their literature review.
^
The literature review in question is focused on presenting concepts, definitions, and factors related to
outsourcing, offshoring, and nearshoring. However, it is important to note that the provided text does
not seem to be a complete literature review but rather a section of a larger document. Nevertheless, I
can provide some feedback based on the available information.
In terms of the author's strengths, one positive aspect is their ability to define key terms and concepts
related to outsourcing, offshoring, and nearshoring. This helps establish a foundation for understanding
the subsequent discussion. Additionally, the author includes citations from other sources, which
indicates that they have conducted research and have relied on existing studies to support their
statements. This demonstrates that the author has considered a range of perspectives and integrated
them into the review.
However, there are some drawbacks to consider. Firstly, the literature review appears to be somewhat
fragmented, lacking a cohesive flow and structure. The provided text jumps between different sections
and topics without clear transitions, making it challenging to follow the logical progression of ideas. A
more organized structure would enhance the readability and coherence of the review.
Furthermore, the review mostly focuses on descriptive information, such as definitions and features,
without offering a critical analysis or synthesis of the reviewed research. While it is important to
establish a foundation of knowledge, a comprehensive literature review should also evaluate and
compare different studies, highlight gaps or contradictions, and provide insights or recommendations
based on the existing research. This level of critical analysis appears to be missing from the excerpted
text.
In conclusion, the author's strengths lie in their ability to define key terms and incorporate citations
from other sources. However, the literature review would benefit from improvements in terms of its
structure, coherence, and critical analysis of the reviewed research. By addressing these areas, the
author can enhance the overall quality and effectiveness of their literature review.
The authors' methodology in this article exhibited several commendable strengths, contributing to a
comprehensive analysis of nearshoring as a production strategy. By combining quantitative and
qualitative methods, decision-makers were provided with a holistic understanding of the costs and
implications involved. One notable strength of the methodology was the effective utilization of the Total
Cost of Ownership (TCO) instrument. The TCO model enabled a thorough evaluation of the overall costs
associated with nearshoring by considering transport costs, production costs, and risk factors. By
incorporating these elements, the authors enhanced the accuracy and reliability of the cost estimation,
empowering decision-makers to make informed choices.
Another strength of the methodology lay in the integration of perception-based analysis. The authors
incorporated subjective assessments from decision-makers on factors such as time, value, and cost. This
inclusion of qualitative insights added depth to the analysis, capturing non-financial aspects and
individual perspectives that influenced nearshoring decisions. By considering these subjective
assessments, the authors provided a more comprehensive understanding of the implications and
potential benefits of nearshoring.
Additionally, the authors relied on existing literature and industry expertise, which strengthened the
methodology. Although specific details on data sources may have been lacking, the authors referenced
established research and validation processes, enhancing the credibility and relevance of the study.
Drawing from prior knowledge contributed to a robust analysis and provided a foundation for informed
conclusions.
In conclusion, the authors' methodology demonstrated strengths in its comprehensive approach, the
utilization of the TCO instrument, integration of perception-based analysis, and reliance on existing
literature and industry expertise. These strengths contributed to a thorough understanding of
nearshoring as a production strategy and offered valuable insights for decision-makers. However, it is
important to note a notable drawback in the lack of transparency and validation in their data sources,
particularly concerning air transport model of stock costs. In this section the author assumed the value
without refering other persepective information feom other sources. Addressing this limitation through
transparent data validation would have further enhanced the credibility and reliability of their findings.
Overall, the authors' methodology provided valuable insights into nearshoring and its implications, but
improvements in data validation would have strengthened its robustness.0
The author team utilized various techniques and tools to analyze the data in this section of the article.
One notable approach was the use of a specialized instrument designed specifically for calculating total
cost of ownership (TCO) in different scenarios. This instrument required inputs such as the number of
container shipments per year, the transport mix (maritime, rail, road, air), and the sector classification.
By incorporating these inputs, the author team was able to assess the cost implications associated with
different aspects of the supply chain.
To carry out the TCO calculations, the author team utilized statistical software. Although the specific
details of the software were not mentioned in the available information, it can be inferred that the
software facilitated the processing of the data and generation of accurate results. The findings of the
TCO calculations were then presented in Table 9, which provided a detailed breakdown of various cost
components. These components included production costs, transport costs for different modes of
transportation (maritime, rail, road, air), lead time, stock costs, and the overall TCO for each scenario
and transport mix. This comprehensive breakdown offered valuable insights into the cost structure of
the supply chain in different scenarios.
In addition to the quantitative analysis, the author team also conducted a qualitative assessment. For
this assessment, they assigned scores to decision factors based on the Global Innovation Index, which
served as a measure of the perceived importance of these factors. Unfortunately, the specific decision
factors were not mentioned in the available information. However, the scores assigned to each question
were presented in Table 10, and the resulting rankings were displayed in Table 11. This qualitative
assessment provided additional depth to the analysis by incorporating subjective factors into the
decision-making process.
To further evaluate the decision factors, the author team applied different weightings, as shown in Table
12. These weightings aimed to determine the relative importance of the decision factors in the analysis.
However, the specific methodology used to assign these weightings was not provided in the available
information. Nevertheless, this approach allowed the author team to assess the impact of different
decision factors on the overall analysis and decision-making process.
The author team also compared the TCO results among different scenarios and transport mixes.
Through this comparative analysis, they identified North-Macedonia as consistently having the lowest
overall TCO, followed by Poland and Benelux. The author team offered an explanation for these findings,
highlighting that Benelux had lower transport and stock costs due to shorter distances but higher wage
costs. This comparison shed light on the cost implications associated with different geographical
locations and transport options, providing valuable insights for supply chain decision makers.
Furthermore, the author team considered the rankings based on qualitative factors. In most cases,
Belgium ranked the highest in the qualitative analysis. However, the author team noted that when cost
was given greater importance, North-Macedonia or Poland could precede Belgium due to their lower
wage costs. This comparison allowed for a nuanced understanding of the decision-making process and
the trade-offs between objective TCO calculations and subjective qualitative factors.
Overall, the author team demonstrated a rigorous approach to data analysis in this section of the article.
Their utilization of statistical software for TCO calculations, the development of a specialized instrument,
and the incorporation of qualitative assessments and comparative analysis provided a comprehensive
evaluation of the supply chain decision factors. These findings are particularly relevant and valuable in
the context of the COVID-19 pandemic and its potential long-term impacts.
However, the author did not describe the statistical software used or the methodology behind the
development of the TCO calculation instrument. Including such information would have enhanced the
overall clarity and depth of the analysis. Specifically, providing details about the statistical software used
in the development of the TCO (Total Cost of Ownership) calculation instrument is necessary for
improving the clarity and depth of the analysis. Without these details, it becomes difficult for readers to
understand the reliability and validity of the findings.
The statistical software used in the analysis plays a crucial role in data processing, analysis, and
generating results. By including information about the statistical software and the methodology behind
the TCO calculation instrument, the author would provide transparency in the data analysis, allowing
readers to assess the reliability and validity of the analysis.
In this section of the article, the author team employed a variety of techniques and tools to conduct a
comprehensive analysis of the data. One of the key aspects of their analysis was the development of an
instrument specifically designed to calculate the total cost of ownership (TCO) in different scenarios.
This instrument required several inputs, including the number of container shipments per year, the
transport mix (maritime, rail, road, air), and the sector classification. By considering these inputs, the
author team aimed to capture the various factors that contributed to the overall cost of owning and
operating a supply chain.
However, a drawback of the analysis was that the author team did not implement statistical software to
carry out the TCO calculations, which could have allowed for better handling of the complexity of the
calculations and ensured the reliability of their findings. This limitation suggests a potential area for
improvement in future analyses.
Nonetheless, the results of the TCO calculations were presented in Table 9, where the authors provided
a detailed breakdown of various cost components. These components included production costs,
transport costs for different modes of transportation (maritime, rail, road, air), lead time, stock costs,
and the overall TCO for each scenario and transport mix. By presenting this comprehensive information,
the author team offered valuable insights into the cost structure of the supply chain in different
scenarios. Decision-makers could use this breakdown to understand the relative contributions of
different cost elements and make informed decisions regarding their supply chain strategies.
In addition to the quantitative analysis, the author team conducted a qualitative assessment to consider
subjective decision factors. They assigned scores to these factors based on the Global Innovation Index,
which served as a measure of the perceived importance of these factors. Unfortunately, the specific
decision factors were not mentioned in the available information. However, the scores assigned to each
factor were presented in Table 10, and the resulting rankings were displayed in Table 11. This approach
allowed the author team to compare the relative significance of different decision factors and
understand their impact on the overall analysis.
To further evaluate the decision factors, the author team applied different weightings, as shown in Table
12. However, the specific methodology used to assign these weightings was not provided. While the
application of weightings was a valuable step in determining the relative importance of each decision
factor, the lack of information about the methodology limits the transparency and replicability of the
analysis.
Despite these limitations, the author team compared the TCO results among different scenarios and
transport mixes. They identified North Macedonia as consistently having the lowest overall TCO,
followed by Poland and Benelux. The authors explained that Benelux offered lower transport and stock
costs due to shorter distances but had higher wage costs. This comparative analysis allowed for a better
understanding of the cost implications associated with different geographical locations and transport
options. Decision-makers could use this information to evaluate the potential cost savings and trade-offs
when selecting supply chain strategies based on location and mode of transportation.
Furthermore, the author team considered the rankings based on qualitative factors. In most cases,
Belgium ranked the highest in the qualitative analysis. However, the authors noted that when cost was
given greater importance, North Macedonia or Poland could precede Belgium due to their lower wage
costs. This comparison provided additional insights into the decision-making process and the trade-offs
between objective TCO calculations and subjective qualitative factors.
Overall, while the analysis had some drawbacks, such as the absence of statistical software for TCO
calculations and lack of information about the weighting methodology, the author team demonstrated a
rigorous approach to data analysis in this section of the article. Their comprehensive evaluation of the
supply chain decision factors through quantitative and qualitative assessments offered valuable
information to supply chain decision-makers, particularly in the context of the COVID-19 pandemic and
its potential long-term impacts.