News, Insights and Best Practices for Manufacturing in Mexico

Electronics firm a model of overall manufacturing success in Mexico

06 Feb 2014

Category: Electronics Manufacturing

The Mexican economy has made significant progress over the past several months and much of the credit can be given to the manufacturing sector. Through offshoring in Mexico, many manufacturers and a variety of enterprises have been able to leverage the local workforce and expanding industry to foster consistent growth. In fact, a recent press release from the international financial organization HSBC and compiled by the economic research firm Markit highlighted the substantial gains the manufacturing sector made in the fourth quarter of 2013. The HSBC "Purchasing Managers' Index" bases its measurements on a scale based on a median metric of 50.0. For sectors scoring above this figure, HSBC determines they've grown over the previous month, while those measuring below this point have likely experienced reduced orders, output, employment and delivery accuracy. According to the December report, the Mexican manufacturing industry had a score of 52.6, which reflects positive movement in manufacturing compared to the previous month's figure - 51.9.

All manufacturing indicators reflect growth
The report broke down the individual metrics and found an increasing number of new orders during December continued the trend seen in previous months. In fact, it was the fifth month in a row where exports and orders have outpaced those from prior months. As a result, manufacturing output has continued with similar gains. The rise in production was the largest since February 2013 and growth has been equally strong. Because demand and production have increased, the report also indicated the amount of work backlogged decreased compared to previous months.

To meet the increasing number of work orders, manufacturers in Mexico also ramped up hiring in December. In the industry, December represented the second month in a row that employment figures improved. Not only have numbers improved but the fact remains that the quality of the labor market and the talents of workers in Mexico continues to strengthen.

Electronics firm invests in the labor force and sees returns
One of the manufacturing firms making a concerted effort to ensure the labor force is both productive and satisfied with their roles is Plantronics, a computer and mobile phone parts supplier. The local California newspaper Santa Cruz Sentinel reported the U.S. enterprise is one of 12 companies that have been recognized and entered in the running for the 2013 Award for Corporate Excellence. The Plamex facility, located in Tijuana, was nominated by the U.S. Ambassador to Mexico Early Anthony Wayne because of the investment the electronics company has made in developing its workforce. This isn't the first time the site has been recognized for excellence, as the Sentinel indicated it has received multiple awards during its 15 years operating in Mexico.

More than 2,000 employees who work in the 800,000-square-foot manufacturing plant are able to take advantage of partnerships the company has made with local educational institutions. By collaborating with colleges and professional trade schools, the firm can more easily provide internship and work-study opportunities, which ultimately help in talent recruitment.

In addition to professional development, the Plamex facility also features recreational resources, such as a soccer pitch, basketball court and exercise equipment. To better care for employees, the Plamex site has also helped workers with housing concerns, implemented childcare programs and worked to provide health campaigns. The company also features some of the most state-of-the-art technology that employees can use to develop high quality products and components, while at the same time developing their skills.

These initiatives appear to be paying off as well. Barron's recently reported the third quarter earnings for Plantronics hit $212.7 million, which is roughly $7 million more than analysts had anticipated. By fostering a strong labor force, the company and manufacturing in Mexico will continue to gain momentum.

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