News, Insights and Best Practices for Manufacturing in Mexico

"Right-shoring" for manufacturers

30 Aug 2013

Category: Manufacturing in Mexico

An article published in Evertiq, an online news source for the electronics manufacturing supply chain, argued manufacturers should commit themselves to "right-shoring" rather than on-shore or offshore manufacturing specifically. "Right-shoring" is the practice of weighing the business case for manufacturing in all locations possible and making the decision from there, rather than deciding in advance to keep production foreign or domestic. The business case for offshoring varies widely between countries, but in situations where the ROI is high and the barriers low, like it is in Mexico, it can be the best choice.

Manufacturing in Mexico is the definition of "right-shoring" for many manufacturers. It allows proximity to the major U.S. market, shortening supply chains and making distribution easier. It also offers reduced manufacturing costs and a skilled workforce. Working with an offshore shelter company can smooth the way to establishing and managing a plant in the country, and to creating good business relationships with Mexican businesses.

Often, companies choose to offshore not only for the high ROI it offers, but also to develop their core competencies more fully at home. Offshoring manufacturing can free up a business to invest more in research and development and expand its reach in the market if it is done well. Expanding to Mexico can also be a good first step in expanding to all of Latin America in terms of sales; the country is an excellent testing ground for first-time selling to foreign countries.

Companies interested in "right-shoring" their manufacturing should give serious consideration to Mexico. The opportunities are excellent and the business case to be made for doing so is strong. Researching the experiences of manufacturers successfully operating in Mexico can be beneficial, as can preliminary consultations with shelter companies. Gathering information on the options for competitive manufacturing in Mexico may steer businesses toward "right-shoring" and the benefits it can bring.


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