News, Insights and Best Practices for Manufacturing in Mexico

U.S. businesses continue to offshore

12 Sep 2013

Category: Labor & Economics, Manufacturing in Mexico

Manufacturers in the U.S. have chosen to offshor​e manufacturing to Mexico for decades to take advantage of the country's lower production costs and skilled labor. Recently, U.S. businesses have began to return their fabrication processes to being within American borders - yet that hasn't stopped many companies from offshoring. No matter the industry, manufacturers still see many reasons to offshore their production, and more businesses may choose to do so in the near future.

Businesses understand offshoring's financial benefits 
According to Foundry-Planet, a resource for technical and commercial foundries, major U.S. companies continue to offshore their operations as ongoing reports show the industry is also moving back to the U.S. The dialogue about reshoring has been going on for years, and offshoring has remained strong at the same time. While it may seem as if reshoring is in opposition to offshoring, it shows a growing confidence in the manufacturing industry. According to Plastics Today, offshoring endures among U.S. businesses as a cost-effective way to produce quality goods in an affordable environment. The source reported many organizations have touted the benefits of manufacturing growth, as offshoring the production process doesn't seem to be slowing.

Foundry-Planet reported offshoring remains a fixture in the U.S. fabrication industry, especially for those in aerospace production and medical device assembly, both of which are strong offshoring industries in Mexico. According to the source, the shift from offshoring to reshoring is a complicated process. In fact, many businesses may chose to retain their offshoring facilities while expanding their assembly process within American borders. 

The complications of reshoring
In a Q&A with David Longshore, the general manager of electronics manufacturing company Creation Technologies, asked if businesses may begin to see the same benefits offered by offshoring after reshoring their production process. According to Longshore, many manufacturers actually underestimated the cost advantages of offshoring, as expenses differ depending on the chosen country. One of the main drivers of reshoring is the protection of intellectual property (IP), but Longshore said using shelter services to aid in the offshoring process mitigates any IP theft risks. 

When manufacturers prepare to offshore their fabrication to Mexico by employing a shelter company, it can be difficult for them to see the benefits of reshoring. With Mexico's experienced employees, the ability to retain IP and lower manufacturing costs, offshoring to the country promises to remain strong. 

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