Manufacturing in Mexico is a multifaceted industry. Companies aren't necessarily limited to the most well-known sectors, such as automotive and aerospace, when developing an agenda to increase production and distribution. In fact, other industries, including furniture production, have gotten a foothold in Mexico by making use of a labor market with the requisite skills and expertise to deliver on the expectations that multinational organizations have as they enter the market.
Market diversification leads to competitive manufacturing options
According to the 2013 Anderson Bauman Tourtellot Vos report "The American Furniture Industry: Industry Watch Update," the demand for offshoring furniture manufacturing will likely reach a point where companies must choose a more efficient and convenient location to move production by 2015. To this end, many manufacturers are setting their sights on Mexico to expand production and overcome obstacles in the supply chain. Citing research from the Boston Consulting Group, the shift to Mexico - especially for North American enterprises - comes as a direct result of a shrinking number of benefits of manufacturing goods, supplies and components in China.
The ABTV study highlighted the fact that wages in Mexico are highly competitive when compared with Chinese manufacturers. However, one of the most attractive aspects of manufacturing furniture in Mexico resides in the country's location as a neighbor of the U.S. and proximity to Canadian interests as well. The costs associated with shipping furniture from China, including tariffs, has influenced the thinking of many businesses as they consider their offshoring options.
US-based furniture producers expands to Mexico
One clear example of a manufacturer that has recognized the competitive merits of expanding to Mexico is American manufacturer Seahawk Designs, a furniture producer specializing in stowaway beds. Furniture World Magazine recently reported the company will be extricating the bulk of its operations from China and moving into dual locations in Tecate, Mexico. Across the border from Southern California, the facilities will focus on different aspects of furniture production. The publication indicated the primary plant, occupying roughly 45,000 square feet, will develop furniture exclusively. The second facility, roughly half the size of the first, is slotted to produce upholstery.
"I am impressed with the growing quality of production in Mexico and numerous cost and production efficiencies because it is closer to our customers and corporate headquarters," explained William Jahn, CEO of Seahawk Designs. "By manufacturing just across the border, it opens a whole new world of design, customization and delivery options for clients."
With greater flexibility and operability, the bed storage producer has a unique opportunity to reach its target market without facing the hurdles many other companies have to deal with when manufacturing in alternative markets. Because of Mexico's burgeoning skilled labor force, Seahawk Designs has been able to meet customer demands with greater pace than if the business continued operating soley out of China. Jahn explained the Chinese are losing ground due to rising costs and deficiencies in their supply chain. In short, it takes too long for materials and products to be distributed to consumers or business partners.