News, Insights and Best Practices for Manufacturing in Mexico

Advantages of Nearshoring to Mexico

11 May 2017

Category: Labor & Economics, Logistics Management, Manufacturing in Mexico

Offshoring in itself offers many competitive edges as an outsourcing alternative, but the advantages of nearshoring are unparalleled in terms of reducing manufacturing costs. Not only does manufacturing right across the border in Mexico capitalize on the low costs and skilled labor of a rising global manufacturing power, but it also makes production much more efficient.

Mexico at the Forefront of Global Manufacturing

According to the Boston Consulting Group, Mexico is now considerably less expensive to manufacture in than China, as wages there have been on the rise while Mexico's remain stable. Because of the low wage growth and a strengthened infrastructure, Mexico has become a major contender as the new global manufacturing base. Nearshore manufacturing in Mexico is sustainable for foreign investment because of its competitive advantage and access to large markets.

Get an in-depth look at Nearshoring vs Offshoring

Proximity and Productivity

nearshoring to Mexico provides proximity and productivitySome of the greatest advantages of nearshoring include improved time management that leads to project efficiency. Similar time zones mean shorter lead times and better response times, while manufacturers in Mexico incur fewer travel expenses and general supply chain costs than their overseas counterparts.

An additional benefit to nearshoring is Mexico's cultural similarity. According to Inbound Logistics, much of the Mexican labor force is bilingual, improving project communication overall. This literal and figurative closeness gives the U.S. more control over intellectual property management, schedules, and supply chains. Nearshoring contributes to a much higher level of manufacturing productivity and consequently improves speed to market.

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