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Reshoring - Piquadro case study

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Diapositiva 1

Claudio DAlessandro 862855Michela Stocco 849215Marinela Gjini 849408Riccardo Carlo Conte 865712

What is reshoring?Reshoring can be considered as the process that brings manufacturing home. There exists several type of reshoring:In-house reshoring (from owned offshore facilities back to owned home-based facilities)reshoring for outsourcing (from owned offshore facilities back to home-based suppliers)reshoring for insourcing (from offshore suppliers back to owned home-based facilities)outsourced reshoring (from offshore suppliers back to home-based suppliers)

The Reshoring phenomenon in ItalyAccording to Cer (Centro Europa ricerche), in 2015 Italy was the second country in terms of reshoring (first one USA), with 101 decisions to bring manufacturing home. The sector mostly affected by this phenomenon is the apparel one, counting for 43% of the total cases, followed by electrical equipment (21%) and leather industry (14%).

Reshoring decision per sector in 2016

A. Finotto (2016) - Sfida reshoring per il made in Italy, Il Sole 24 ore

Why to reshore?Several sources of information agree on common reasons that drove and still deeply influence the reshoring phemonemon.High-quality as competetive advantage (the Made in Italy)Lower customs dutiesCloser relations with clientsHigher flexibility in managing the distributionBank and regional investments

PIQUADROItalian company founded in 1987 by marco palmieri in riola di vergato (BO).It is specialized in leather goods (in particular travel and business items).In 2004 it started an internationalization process. new stores were opend across different countries.In 2015 its turnover was 69.3 million Design, technology and comfort are the key elements of the company. for what concern the design, this is entirely italian.

PIQUADRO: OFFSHORING In 1998 offshoring of the productivity activity in Shenzen, China. First steps in the international market: focus not only on the quality end product, but also on the brand its diffusion and popularity in order to ensure a structured presence abroad. The firm could not compete in prices so they gave great importance to marketing campaigns, advertising campaigns and events through advertising agencies in order to guarantee visibility. They opened a fashion store and a corner in a multi-brand concept in order to make the brand perceptible to the target audience choosing prestigious locations, just to gain good visibility. focus on brand stores, but also on multi-brand outlets. Economic situation after the offshoring in china:

When, Where, How:

The implementation in China has pointed out factors that concern not only the production process but also the acquisition of the local know-how. They have tried to learn new working approaches that are totally different from their way of running business.

The offshoring process enabled them to - reduce production costs, - achieve resources that they have invested in other projects such as: marketing, development of new markets, the construction of a new factory in Italy in Gaggio Montano (Bo), with an investment of 8 million euro.

China has guaranteed greater control over the quality of the manufactured product, a significant reduction of production costs and therefore better value for money.They used Italian raw materials in chinese factories and once finished, the products returned to Italy, where they are controlled and organized in their warehouse, fully computerized and able to respond to an order in less than 24 hours.

They have implemented new and faster distribution channels through which they have guaranteed a fast delivery. The sales network guarantee always a constant supply of the stores.

Advantages: Procedures:

Reshoring: causes and benefitsIn 2014 Piquadro abandoned its factories in China where 80% of goods sold where produced.There are different causes that pushed Marco Palmieri to take this decision:

Labour costs rose by 58% in the last years ten years ago labor in China costed ten times less than now, today the difference consistently decreased to one/thirdAt the same time, costs of provisions increased as well as transports of raw materials that raised the final costs of goods.The need for quality. China didnt provide the same Italian quality. Italy carries on a manufactures quality which is one of the top in the industry.

M. Palmieri wanted to re-establish the philosphy of Made in Italy that nowadays is higly requested, particularly from overseas, where a huge quality of products is expected.The hypothesis to produce and to sell the product directly there was not adapted, because of the strict purchasing power of Chinese consumers, particularly for the premium collection, whose cost is pretty high.

Focusing on reshoring, Piquadro has been able to refocus an important slice of its business in the domestic country, exploiting diverse advantages:A deep concentration of human labor that brings to the firm rapidity of products execution, flexibilty and the plus of made in Italy.Take advantage of the filire productive, where raw materials can be found within 100 km, considering it as a big value that few companies have.Creation of employment thanks to the creation of new mills.

D. The e-commerce: Piquadro allowed people to create their favorite product directly on the website of the company, enabling customers to shape the product according to their tastes. Through e-commerce the firm exploited the advantage of the mass customization that would not have been possible from China because of the time of shipping and processing.

To conclude, M. Palmieri affirmed his will to bring back almost the 40% of production to Italy.


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