Artificial Intelligence Enabled Reshoring Decisions: An Industry 5.0 Based Framework
DOI:
https://doi.org/10.63556/tisej.2026.1591Keywords:
Supply chain, optimization, sustainability, industry 5.0, artificial intelligenceAbstract
Increasing uncertainties in global supply chains have made reshoring (the relocation of production activities back to the country of origin) operations a strategic necessity. The aim of this study is to present an AI-based integrated decision support model that optimizes reshoring decisions in terms of cost, resilience, and sustainability in line with Industry 5.0 principles. The methodology of the research is based on processing the strategic parameters identified through systematic literature synthesis in a five-stage hybrid analytical process. Within this framework, SVM and LSTM algorithms have been integrated for operational status detection, ARIMAX for forecasting future demand, Monte Carlo Simulation for risk analysis under uncertainty, and DES techniques for operational workflow optimization. Strategic risk scoring is performed using the RF algorithm, thereby establishing the model's decision-making mechanism. The model, reflecting the cyber-physical and human-centered paradigms of Industry 5.0, contributes to both performance optimization and sustainability compliance. Overall, this research contributes methodologically to the modeling of reshoring processes and provides actionable insights for both academic inquiry and industrial implementation.
References
Acemoglu, D., & Restrepo, P. (2018). The race between man and machine: Implications of technology for growth, factor shares, and employment. American economic review, 108(6), 1488-1542.
Ahmed, T., Karmaker, C. L., Nasir, S. B., Moktadir, M. A., & Paul, S. K. (2023). Modeling the artificial intelligence-based imperatives of industry 5.0 towards resilient supply chains: A post-COVID-19 pandemic perspective. Computers & Industrial Engineering, 177, 109055. https://doi.org/10.1016/j.cie.2023.109055
Akundi, A., Euresti, D., Luna, S., Ankobiah, W., Lopes, A., & Edinbarough, I. (2022). State of Industry 5.0—Analysis and identification of current research trends. Applied System Innovation, 5(1), 27. https://doi.org/10.3390/asi5010027
Ali, S. H., Kalantzakos, S., Eggert, R., Gauss, R., Karayannopoulos, C., Klinger, J., ... & Perrons, R. K. (2022). Closing the infrastructure gap for Decarbonization: The case for an integrated mineral supply agreement. Environmental Science & Technology, 56(22), 15280-15289. https://doi.org/10.1021/acs.est.2c05413
Andres, B., Díaz-Madroñero, M., Soares, A. L., & Poler, R. (2024). Enabling Technologies to Support Supply Chain Logistics 5.0. IEEE Access, 12, 43889-43906. https://doi.org/ 10.1109/ACCESS.2024.3374194
Artuc, E., Bastos, P., Copestake, A., & Rijkers, B. (2022). Robots and trade: Implications for developing countries. In Robots and AI (pp. 232-274). Routledge.
Bettiol, M., Chiarvesio, M., Di Maria, E., Di Stefano, C., & Fratocchi, L. (2023). Post-offshoring manufacturing strategies: decision-making and implementation. Management Decision, 61(12), 3755-3784. https://doi.org/10.1108/MD-12-2022-1764
Calatayud, C., & Rochina-Barrachina, M. E. (2026). Robots and firm reshoring. Industry and Innovation, 1-20. https://doi.org/10.1080/13662716.2025.2495758
Charpin, R. (2022). The resurgence of nationalism and its implications for supply chain risk management. International journal of physical distribution & logistics management, 52(1), 4-28. https://doi.org/10.1108/IJPDLM-01-2021-0019
Chen, C., & Frey, C. B. (2024). Robots and reshoring: a comparative study of automation, trade, and employment in Europe. Industrial and Corporate Change, 33(6), 1331-1377. https://doi.org/10.1093/icc/dtae012
Chidozie, B., Ramos, A., Ferreira, J., & Ferreira, L. P. (2024). The Importance of digital transformation (5.0) in supply chain optimization: an empirical study. Production Engineering Archives, 30(1), 127-135. https://doi.org/10.30657/pea.2024.30.12
Colombi, L., Gilli, A., Dahdal, S., Boleac, I., Tortonesi, M., Stefanelli, C., & Vignoli, M. (2024, May). A machine learning operations platform for streamlined model serving in industry 5.0. In NOMS 2024-2024 IEEE Network Operations and Management Symposium, 1-6. https://doi.org/10.1109/NOMS59830.2024.10575103
Dabo, A. A. A., & Hosseinian-Far, A. (2023). An Integrated Methodology for Enhancing Reverse Logistics Flows and Networks in Industry 5.0. Logistics, 7(4), 97. https://doi.org/10.3390/logistics7040097
Dossou, P. E., Alvarez-de-los-Mozos, E., & Pawlewski, P. (2024). A Conceptual Framework for Optimizing Performance in Sustainable Supply Chain Management and Digital Transformation towards Industry 5.0. Mathematics, 12(17), 2737. https://doi.org/10.3390/math12172737
Faber, M. (2020). Robots and reshoring: Evidence from Mexican labor markets. Journal of International Economics, 127, 103384. https://doi.org/10.1016/j.jinteco.2020.103384
Fernández Miguel, A., Riccardi, M. P., García-Muiña, F. E., Fernández del Hoyo, A. P., Veglio, V., & Settembre-Blundo, D. (2024). From Global to Glocal: Digital Transformation for Reshoring More Agile, Resilient, and Sustainable Supply Chains. Sustainability, 16(3), 1196. ttps://doi.org/10.3390/su16031196
Freund, C., Mattoo, A., Mulabdic, A., & Ruta, M. (2024). Is US trade policy reshaping global supply chains?. Journal of International Economics, 152, 104011. https://doi.org/10.1016/j.jinteco.2024.104011
Giammetti, R., Papi, L., Teobaldelli, D., & Ticchi, D. (2022). The network effect of deglobalisation on European regions. Cambridge Journal of Regions. Economy and Society, 15(2), 207-235. https://doi.org/10.1093/cjres/rsac006
Gray, J. V., Esenduran, G., Rungtusanatham, M. J., & Skowronski, K. (2017). Why in the world did they reshore? Examining small to medium-sized manufacturer decisions. Journal of Operations Management, 49, 37-51. https://doi.org/10.1016/j.jom.2017.01.001
Hussien, M., Nguyen, K. K., Ranjha, A., Krichen, M., Alshammari, A., & Cheriet, M. (2023). Enabling efficient data integration of industry 5.0 nodes through highly accurate neural CSI feedback. IEEE Transactions on Consumer Electronics, 69(4), 813-824. https://doi.org/ 0.1109/TCE.2023.3294832
Iakovou, E., Pistikopoulos, E. N., Walzberg, J., Iseri, F., Iseri, H., Chrisandina, N. J., ... & Nkoutche, C. (2024). Next-generation reverse logistics networks of photovoltaic recycling: Perspectives and challenges. Solar Energy, 271, 112329. https://doi.org/10.1016/j.solener.2024.112329
Ivanov, D. (2023). The Industry 5.0 framework: viability-based integration of the resilience, sustainability, and human-centricity perspectives. International Journal of Production Research, 61(5), 1683-1695. https://doi.org/10.1080/00207543.2022.2118892
Kabir, M. A., Khan, S. A., & Kabir, G. (2024). A Hierarchical Structure Modeling and Relationships Exploration of Supply Chain 5.0 Capabilities. IEEE Transactions on Engineering Management, 71, 11253-11268. https://doi.org/ 10.1109/TEM.2024.3408669
Kerstens, K., Azadi, M., Matin, R. K., & Saen, R. F. (2024). Double Hedonic Price-Characteristics Frontier Estimation for IoT Service Providers in the Industry 5.0 Era: A Nonconvex Perspective Accommodating Ratios. European Journal of Operational Research, 319(1), 222-233. https://doi.org/10.1016/j.ejor.2024.05.047
Krenz, A., Prettner, K., & Strulik, H. (2021). Robots, reshoring, and the lot of low-skilled workers. European Economic Review, 136, 103744. https://doi.org/10.1016/j.euroecorev.2021.103744
Lampón, J. F., & Rivo-López, E. (2022). The effect of the industry technology intensity on the drivers of manufacturing backshoring. Journal of Manufacturing Technology Management, 33(1), 1-21. https://doi.org/10.1108/JMTM-03-2021-0071
Lee, P. T. W., & Song, Z. (2023). Exploring a new development direction of the Belt and Road Initiative in the transitional period towards the post-COVID-19 era. Transportation Research Part E: Logistics and Transportation Review, 172, 103082. https://doi.org/10.1016/j.tre.2023.103082
Leng, J., Zhu, X., Huang, Z., Li, X., Zheng, P., Zhou, X., ... & Liu, Q. (2024). Unlocking the power of industrial artificial intelligence towards Industry 5.0: Insights, pathways, and challenges. Journal of Manufacturing Systems, 73, 349-363. https://doi.org/10.1016/j.jmsy.2024.02.010
Li, J. (2020). Grow local manufacturing along US/Mexico border region for an integrated supply chain in the Post COVID-19 era. Smart and Sustainable Manufacturing Systems. https://doi.org/10.1520/SSMS20200067
Lo, H. W. (2023). A data-driven decision support system for sustainable supplier evaluation in the Industry 5.0 era: A case study for medical equipment manufacturing. Advanced Engineering Informatics, 56, 101998. https://doi.org/10.1016/j.aei.2023.101998
Longauer, D., Hauck, Z., & Vasvári, T. (2023). Make-or-buy strategies in a multi-stage manufacturing process and the role of learning effect in relocation decisions. Computers & Industrial Engineering, 180, 109259. https://doi.org/10.1016/j.cie.2023.109259
Marrone, P. V., Mathias, F. R., Bernardo, W. M., Orlandini, M. F., Serafim, M. C. A., Scoton, M. L. R. P. D., ... & Dias, E. M. (2023). Decision Criteria for Partial Nationalization of Pharmaceutical Supply Chain: A Scoping Review. Economies, 11(1), 25. https://doi.org/10.3390/economies11010025
Nicoletti, B., & Appolloni, A. (2024). Green Logistics 5.0: a review of sustainability-oriented innovation with foundation models in logistics. European Journal of Innovation Management, 27(9), 542-561. https://doi.org/10.1108/EJIM-07-2024-0787
Sawik, T. (2023). Reshore or not reshore: a stochastic programming approach to supply chain optimization. Omega, 118, 102863. https://doi.org/10.1016/j.omega.2023.102863
Sawik, T. (2025). Economically viable reshoring of supply chains under ripple effect. Omega, 131, 103228. https://doi.org/10.1016/j.omega.2024.103228
Sharma, M., Sehrawat, R., Luthra, S., Daim, T., & Bakry, D. (2022). Moving towards industry 5.0 in the pharmaceutical manufacturing sector: Challenges and solutions for Germany. IEEE Transactions on Engineering Management, 71, 13757-13774. doi: 10.1109/TEM.2022.3143466
Tsai, T. Y., & Urmetzer, F. (2024). A decisional framework for manufacturing relocation: Consolidating and expanding the reshoring debate. International Journal of Management Reviews, 26(2), 254-284. https://doi.org/10.1111/ijmr.12352
Xu, X., Lu, Y., Vogel-Heuser, B., & Wang, L. (2021). Industry 4.0 and Industry 5.0—Inception, conception and perception. Journal of manufacturing systems, 61, 530-535. https://doi.org/10.1016/j.jmsy.2021.10.006
Yu, H., & Sun, X. (2024). Uncertain remanufacturing reverse logistics network design in industry 5.0: Opportunities and challenges of digitalization. Engineering Applications of Artificial Intelligence, 133, 108578. https://doi.org/10.1016/j.engappai.2024.108578
Yu, U. J., & Kim, J. H. (2018). Financial productivity issues of offshore and “Made-in-USA” through reshoring. Journal of Fashion Marketing and Management: An International Journal, 22(3), 317-334. https://doi.org/10.1108/JFMM-12-2017-0136
Zhen, Z., & Yao, Y. (2024). The confluence of digital twin and blockchain technologies in Industry 5.0: Transforming supply chain management for innovation and sustainability. Journal of the Knowledge Economy, 1-27. https://doi.org/10.1007/s13132-024-02151-0
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Third Sector Social Economic Review

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.




