News, Insights and Best Practices for Manufacturing in Mexico

Offshoring to Mexico creates business transformations

01 Oct 2013

Category: Manufacturing in Mexico

Manufacturers across the globe are in the middle of a transformation. Increasing demands for supply chain flexibility, the need to innovate while reducing costs and the consistent pressure to streamline productivity to remain competitive are causing many businesses to rethink their production processes and their business objectives. According to a recent survey of chief information officers by business software provider Epicor Software Corporation, the majority of CIOs agree the manufacturing industry is in the midst of an evolution as executives try to find ways to tackle these growing challenges. With expanding to Mexico offering manufacturers numerous financial and operational advantages, offshoring to the country can help businesses maintain a healthy bottom line and stay competitive.

Challenges from a changing manufacturing environment
Conducted with The Manufacturer magazine in the U.K., the Epicor survey found CIOs have felt increasingly pressured during the past five years to meet growing financial and operational demands. According to the survey, many manufacturing executives aren't simply improving their business models to tackle these issues, but are transforming their businesses altogether. Sixty-seven percent said they have made or are making alterations to their business models, effectively becoming Transformers rather than Improvers. 

Transformers, according to the survey, use sophisticated systems to achieve their companies' strategic visions, while Improvers employ more traditional ideas, such as controlling costs and boosting the efficiency of their processes.

Martin Hill, vice president of marketing for Epicor, said the challenges within today's manufacturing environment have forced many CIOs to change their business plans, but some are seeing issues arise through tight budgets and inflexible systems.

"It's clear from the survey that there's pressure on manufacturing CIOs to make the journey from simply being Improvers to becoming Transformers," Hill said. "With the challenges faced by the manufacturing industry and their dependence on increasingly sophisticated systems and technologies, CIOs now have greater influence over how quickly a company can expand into a new market or how quickly a business model can change."

To help their businesses keep up with their industries' transformations, 83 percent said their organizations will expand into new markets.

Growing challenges may boost offshoring appeal
In an article in Manufacturing Business Technology magazine by Beth Ambaruch, director of corporate communications at technology company PTC, she wrote manufacturers must rethink their business strategies to stay competitive in their evolving industries. Many companies are becoming increasingly global in scale, according to the article, in order to boost their markets and revenue streams. However, expanding the production process into another country can be difficult for even the most experienced executives if they don't pick the right location.

Offshoring to Mexico provides a multitude of advantages for businesses, especially if they are located within the U.S. Manufacturers can streamline their fabrication and assembly processes by offshoring their production to Mexico because the Mexican workforce is highly specialized in numerous industries. When companies are able to create quality products in another country and have the ability to transport goods quickly and easily, they can remain competitive in the increasingly innovative and flexible manufacturing industry. 

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