From globalized to regionalized supply chains: how and why regionalization challenges translate into firm-level hesitation

Purpose Prior regionalization and reshoring studies identify important supplier, infrastructure, technological, cost and regulatory constraints but provide limited explanation of how and why regionalization challenges make supply chain firms hesitant to engage in regionalization process, despite recognizing its operational and strategic value. Design/methodology/approach Adopting a multiple case study methodology, the research draws on a comparative analysis of three contrasting manufacturing industries: pharmaceuticals, electronics and food and beverage. Data were collected through 40 semi-structured interviews across 11 firms: 4 pharmaceutical, 4 electronics and 3 food and beverage firms. The participating firms were actively evaluating or undertaking regionalization, ranging from strategic consideration to early- and mid-stage implementation. Findings The findings identify six regionalization challenges: inadequate supplier base, poor technological infrastructure, higher financial burden, underdeveloped regional infrastructure, insufficient skilled labour and complex intra-firm structure. The study further shows how these challenges are associated with distinct forms of firm-level hesitation. For example, inadequate supplier base was associated with supplier-switching reluctance; poor technological infrastructure with digital integration concerns; underdeveloped regional infrastructure with logistics reliability concerns; and insufficient skilled labour with capability-scaling constraints. Higher financial burden was associated with cost-justification uncertainty, while complex intra-firm structure was associated with governance-based inertia and continued reliance on established global sourcing arrangements. The cross-industry comparison further indicates that the salience and manifestation of these mechanisms differ across sectors. Notably, regulatory intensity and certification requirements are particularly salient in pharmaceuticals; technological complexity and specialized component ecosystems in electronics; and cold-chain reliability, traceability and logistics sensitivity in food and beverage. Research limitations/implications The study draws on 40 interviews across 11 firms in the Australian manufacturing context. As the study is qualitative and theory-building in nature, the findings should be interpreted as analytically generalizable rather than statistically generalizable. Future research could test and extend the proposed mechanism through larger samples, longitudinal designs, successful regionalization cases and cross-regional comparisons. Practical implications The study provides managers and policymakers with industry-specific guidance for reducing regionalization hesitation. Managers should assess supplier readiness, digital integration, logistics reliability, workforce capability, financial justification and internal governance alignment before scaling regionalization initiatives. Policymakers can support regionalization by strengthening supplier accreditation, shared digital infrastructure, logistics and cold-chain systems, vocational training and incentives for regional supplier development. Social implications The study shows that regionalization can support regional economic development, skilled employment, supplier upgrading and stronger community resilience. It also highlights the potential social value of improved traceability, ethical sourcing and reduced long-distance transport exposure, provided that firms and policymakers invest in regional supplier capability and infrastructure readiness. Originality/value The study moves beyond documenting regionalization challenges by developing a mechanism-based explanation of how and why firms hesitate to regionalize. Specifically, it contributes to supply chain reconfiguration and regionalization research by explaining how institutional constraints and regional capability gaps are experienced as implementation challenges. It also empirically shows how firms interpret these challenges as transition risks and how internal business-case and governance conditions are associated with delay, narrowing or partial implementation of regionalization.