News, Insights and Best Practices for Manufacturing in Mexico

Taking the leap to offshore comes with significant benefits

16 Oct 2013

Category: Labor & Economics, Manufacturing in Mexico, Taxes & Finance

Innovation in manufacturing often starts with taking a risk on a new investment or putting resources into a product that may not take off. Yet not pushing certain boundaries can result in decreasing revenue streams and outdated products. Offshoring to Mexico offers manufacturers the opportunity to reduce production and operation-related costs, but many U.S. businesses may think there are more cons than pros. From miscommunication with the supply chain to high employee turnover, expanding to Mexico without the assistance of a shelter company can come with many risks. But being risk adverse can result in manufacturers being unable to keep up with the competition as operational costs skyrocket.

The innovative perspective
According to McKinsey & Company, manufacturing is in the middle of significant changes as businesses expand across the globe and companies become more ambitious. However, innovation is at the center of manufacturing's evolving industries and will continue to be a focus well into the future. This is why U.S. businesses are facing the growing need to find solutions to their ongoing financial challenges or see their revenues decline.

In an article for, Alan Nicol of AlanNicolSolutions wrote innovation is an attitude that drives success in any type of activity. For manufacturers, Nicol wrote solving a problem successfully is often difficult for risk adverse companies that can only see the challenges rather than the benefits. While understanding the risks of an investment is crucial in any industry, Nicol wrote this cautiousness shouldn't stop manufacturers from trying to improve their processes and administrative practices. 

"We have all felt the conflict of trying to do something new and different in an organization that is afraid to make a mistake," Nicol wrote. "[...] However, the one that seems to be the hardest to accept is that we simply can't know the success of an innovative idea ahead of time."

Manufacturers that offshore their production processes may be taking a gamble about many things, but partnering with a shelter company mitigates any risks. While creating a smooth yet flexible supply chain can be a challenge in another country, having an experienced shelter company aid in the endeavor boosts the possibility of success. All of the benefits manufacturers receive when they offshore can be negated by doing so independently, which is a challenge that no amount of innovation may be able to alleviate. Yet shelter company assistance takes away many of these obstacles and helps manufacturers see the benefits of taking the leap to offshore.


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