Manufacturing in Mexico: Did you know…?

A recent article in Supply Chain Quarterly gave advice on making it in Mexico as a manufacturer engaged in offshoring. This popular outsourcing alternative can reduce manufacturing costs significantly, all the while keeping a company's supply chains shorter than they would be overseas. Many companies choose to expand to Mexico for these reasons. With careful planning and shelter company partnerships, the move can be very profitable. However well prepared a business may be, its decision-makers may not know the following interesting facts:

• Mexico's industrial centers have a surplus of qualified white-collar talent. In cities and towns with a significant manufacturing presence, many white-collar workers are available. These people are well-educated and experienced. Their associated labor costs are about 30 to 50 percent of what a U.S. employee would have in most cases. The labor market for clerical jobs in Mexico is highly competitive, so companies are often able to pick and choose selectively. Shelter companies help in the recruitment process as well, as they are more familiar with the conditions in the country and what certain qualifications and experiences mean.
• Goods producers in Mexico often find a welcoming market for their products in the country. Mexico is a major consumer market, and many manufacturers from all over the world are located there. As such, manufacturers of components may find that they can establish partnerships with other producers that need what they make.

A shelter company can help a firm position itself to take advantage of these two facts. The knowledge a Mexico shelter company has of local business procedures and governmental regulations can reveal cost savings a company would never have found on its own. It may also be able to facilitate business connections between companies with which it partners. Indeed, in some manufacturing districts, it is possible to assemble entire finished products door-to-door, going from component producer to component producer.